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If we're using the car analogy- According to google the profit margin for a car is something like 5-12%, not sure if that includes R&D or not. That's a far cry

If we're using the car analogy- According to google the profit margin for a car is something like 5-12%, not sure if that includes R&D or not. That's a far cry from 4000% regardless, even if you bring it down by orders of magnitude to account for things you mentioned. You'd think a healthcare company would have some moral imperative to run a relatively thin margin, and maybe not spend 6.5B a year on advertising and god knows how much on greasing up the government for regulatory capture And yes insurance would cover these costs for most people, but we still end up paying through for it through exorbitant premiums And to your final point, yes corporate profits benefit the government because they get taxed. That doesn't mean corporations should be able to form cartels, corner a market, and then jack up the price on essential goods and services to make that profit

gotjustchilly 5y ago
Merck's average net income over the past decade or so is ~15%. Ford's is ~2%. So true, Merck could lower prices across the board by ~15% and then they'd break even. But in that scenario investors would have less inclination to invest in drug development, and we'd have worse drugs and healthcare overall. On the exorbitant premiums. Agreed, but this is essentially a tax on people that have private insurance and/or pay taxes (skewed greatly to the top earners in the population). There is a lot of fat in the healthcare system, all of which is a tax on US taxpayers, but directing the blame at big pharma is missing the forest for the trees. The amount doctors earn is a larger contributing factor to our healthcare costs vs EU for example. On the cartel comment, Pfizer and others have similar oral anti-virals in development. Competition incoming. If we didn't have this for-profit system, it's unclear if we'd have multiple drugs in development.
qeternity 5y ago
A better analogy is entertainment: it costs nothing to create another copy of a blockbuster film. But that doesn’t mean it cost nothing to produce to first copy.

gotjustchilly 5y ago

Merck's average net income over the past decade or so is ~15%. Ford's is ~2%. So true, Merck could lower prices across the board by ~15% and then they'd break even. But in that scenario investors would have less inclination to invest in drug development, and we'd have worse drugs and healthcare overall. On the exorbitant premiums. Agreed, but this is essentially a tax on people that have private insurance and/or pay taxes (skewed greatly to the top earners in the population). There is a lot of fat in the healthcare system, all of which is a tax on US taxpayers, but directing the blame at big pharma is missing the forest for the trees. The amount doctors earn is a larger contributing factor to our healthcare costs vs EU for example. On the cartel comment, Pfizer and others have similar oral anti-virals in development. Competition incoming. If we didn't have this for-profit system, it's unclear if we'd have multiple drugs in development.

qeternity 5y ago

A better analogy is entertainment: it costs nothing to create another copy of a blockbuster film. But that doesn’t mean it cost nothing to produce to first copy.