3 ms·

Given the name and positioning of this business, I would say it's partly a PR stunt and partly an act of charity (a non-charitable approach would be to undercut

Given the name and positioning of this business, I would say it's partly a PR stunt and partly an act of charity (a non-charitable approach would be to undercut by only 30-50% instead of 90%). So yeah... it's great that billionaires occasionally step up to "fix" issues created by corruption and inadequate regulation/oversight, but I think if you're going to take a position that this is somehow better than waiting for the system to fix it, it might be more instructive to look at how this works in countries with a functioning bureaucracy. For example the drug given on the homepage is Albendazole, which they're selling for $20— well guess what, that pill is $2 in the UK and has been since the patent expired in the 90s: > "In other countries, there are price control methods. The government steps in to ensure drug prices do not increase by a certain amount," Alpern says. "There are no price control mechanisms in the U.S." https://www.npr.org/sections/goatsandsoda/2017/12/11/567753423/why-a-pill-thats-4-cents-in-tanzania-costs-up-to-400-in-the-u-s https://www.npr.org/sections/goatsandsoda/2017/12/11/5677534...

JumpCrisscross 6y ago
> a non-charitable approach would be to undercut by only 30-50% instead of 90% Not if you're fighting deeply entrenched incumbents. Switching costs are huge, financially and politically. You need patients to hammer their providers to give them access to these drugs through this channel. 50% off is big, but it's something incumbents could match. 90% off leaves you with a profit margin, gets you PR points and holds the hounds at bay. Bonus: if you work out your competitors' debt loads and price at a level that they couldn't, financially, sustain.
- mikepurvis 6y ago
  If the incumbent is a large scale pharmaceutical company with thousands of drugs in its portfolio, then it can most definitely afford to lose money under-cutting you when you only make a small handful. And I think that really just underscores why this approach is the Google Fiber of the US pharma market— it may be able to force prices down for a handful of select customers, and may be helpful for proving a point about true costs and the need for regulation, but its existence is most certainly not some kind of proof of the invisible hand stepping in to solve this problem on its own and that regulation is therefore unnecessary.
  - JumpCrisscross 6y ago
    > it can most definitely afford to lose money under-cutting you when you only make a small handful Which gives you a textbook Sherman Act claim. In any case, a loss-tolerant competitor doesn't argue for a 50% discount versus 90%.
    - mikepurvis 6y ago
      Of course not— it argues for not bothering to enter this space at all unless you're doing so with ulterior motives, for example as a PR stunt. As for antitrust laws, isn't the whole point that we're in this mess because the incumbents are all conspiring to fix prices and the existing consumer protection systems which should be preventing that have been failing Americans for decades and thank goodness for the free market which created the necessary incentives for Mark Cuban to swoop in and start this business?
      - JumpCrisscross 6y ago
        > incumbents are all conspiring to fix prices and the existing consumer protection systems which should be preventing that have been failing Americans for decades The Sherman Act prohibits monopolies or cartels damaging competitors. As a competitor, you have standing. As a consumer, you do not. I think this business could be phenomenally cash-flow positive in short order. It's not dissimilar from the way Teva started, just further down the pipeline.

JumpCrisscross 6y ago

> a non-charitable approach would be to undercut by only 30-50% instead of 90% Not if you're fighting deeply entrenched incumbents. Switching costs are huge, financially and politically. You need patients to hammer their providers to give them access to these drugs through this channel. 50% off is big, but it's something incumbents could match. 90% off leaves you with a profit margin, gets you PR points and holds the hounds at bay. Bonus: if you work out your competitors' debt loads and price at a level that they couldn't, financially, sustain.

mikepurvis 6y ago
If the incumbent is a large scale pharmaceutical company with thousands of drugs in its portfolio, then it can most definitely afford to lose money under-cutting you when you only make a small handful. And I think that really just underscores why this approach is the Google Fiber of the US pharma market— it may be able to force prices down for a handful of select customers, and may be helpful for proving a point about true costs and the need for regulation, but its existence is most certainly not some kind of proof of the invisible hand stepping in to solve this problem on its own and that regulation is therefore unnecessary.
- JumpCrisscross 6y ago
  > it can most definitely afford to lose money under-cutting you when you only make a small handful Which gives you a textbook Sherman Act claim. In any case, a loss-tolerant competitor doesn't argue for a 50% discount versus 90%.
  - mikepurvis 6y ago
    Of course not— it argues for not bothering to enter this space at all unless you're doing so with ulterior motives, for example as a PR stunt. As for antitrust laws, isn't the whole point that we're in this mess because the incumbents are all conspiring to fix prices and the existing consumer protection systems which should be preventing that have been failing Americans for decades and thank goodness for the free market which created the necessary incentives for Mark Cuban to swoop in and start this business?
    - JumpCrisscross 6y ago
      > incumbents are all conspiring to fix prices and the existing consumer protection systems which should be preventing that have been failing Americans for decades The Sherman Act prohibits monopolies or cartels damaging competitors. As a competitor, you have standing. As a consumer, you do not. I think this business could be phenomenally cash-flow positive in short order. It's not dissimilar from the way Teva started, just further down the pipeline.