4 ms·

They are generating the largest _profit_ in the US. I wouldn’t say they are subsidizing since afaik they are still selling with some profit in other countries.

irrational 4y ago
But if the US made it so they couldn’t get high profits here anymore, wouldn’t they raise prices for everyone else?
- threatripper 4y ago
  If they could raise the prices they would have already. If they didn't make a profit they wouldn't produce and sell the product. So the reality is, that they would just lose some of the profit but nothing else would change. As others pointed out, it would affect decisions for future research. Because you can't just rake in the money in the US you must be more wise with spending your research money.
  - leaflets2 4y ago
    Maybe moving the research to lower living cost countries? > If they could raise the prices they would have already. Good point
    - junofan 4y ago
      That’s been done. Over half of trial sites are outside the US. https://www.fda.gov/media/91849/download https://www.fda.gov/media/91849/download
- NotACop182 4y ago
  They have two choices. Sell for X profit or make no profit. You don’t turn away making millions if someone told you you couldn’t make a billion
  - deleted 4y ago
    [deleted]
  - junofan 4y ago
    Drugs must be developed before they may be sold. The two choices are develop/not develop. The drug developer may use a spreadsheet to calculate NPV. If negative, the drug is not developed.
- oblio 4y ago
  In single payer systems, they can't. The government literally tells you "you sell it for this much". And guess what, "that much" already covers their costs plus profit, so they keep selling. It's just profitable for them to price gouge you, and you don't fight back, at all.
  - otterley 4y ago
    Sorry, but how exactly do you know how the finances work out for pharmaceutical development, manufacturing, and distribution around the world? You seem to know an awful lot about this.
    - oblio 4y ago
      1. If you're defending large corporations, always assume that they're adversarial. They're machines made to defend themselves/attack opponents. When posting in their favor, be careful not to become a shill for them, accidentally. As a general rule, defending the "big guy" on their behalf is generally a losing strategy. They can defend themselves already, no need to stand up for them. 2. I have family working in the medical and pharma fields. 3. I doesn't even matter what and who I know, this tells you everything you need to know: https://www.macrotrends.net/stocks/charts/PFE/pfizer/gross-profit https://www.macrotrends.net/stocks/charts/PFE/pfizer/gross-p... The profit graphs for most of the Big Pharmas look similar. They're hugely profitable. For sure they could lose a chunk of that and do fine. It's just greed. A bit of greed shows ambition. A lot of greed corrodes everything. It's just pathological at some point (money is not points on a mobile game leaderboard!).
      - otterley 4y ago
        Knowing the overall profit of the business doesn’t tell you exactly where the profits are coming from or how margins differ among different product lines and markets. I think we should refrain from claiming specific knowledge of a business’s finances and making confident conclusions unless we have more granular data or are actually employed by the businesses in question.
oneoff786 4y ago
If drug X costs 1B to research and you can sell it for a gross margin of $1 in Europe and $100 in US and you expect the lifetime total gross income to be 10.1B it’s a good thing to invest in. If both countries are limited to a gross margin of $1 and you expect the lifetime gross income to be 0.2B this is now going to be a massive net loss. So you will not invest in it.
- newsclues 4y ago
  If you make an addictive pay to win mobile app, and you make $1/user but have a single whale user who dumps $1000 a month into the game. If the whale suddenly stops paying, you can continue to profit from regular customers you just don’t make the obscene profit from before. Can corporations continue to survive with less profit? I think some individuals have to learn to live with less income, so I’m sure a big pharmaceutical company can figure it out, I’ve had to cut out most meat from my diet in lean times, I’m sure pharmaceutical executives can do something similar.
  - oneoff786 4y ago
    No, you’ve entirely missed the point. There is a large, up front research cost to drugs (and video games). If you have no whales, you might not expect the game to ever achieve enough gross revenue (revenue minus variable costs, sort of) to offset the research costs. Given you already have the drug, sure, it makes sense to keep selling it. But if you try to research more drugs and make more games with no whales, you will quickly go out of business. The video game analogy is apt. These kinds of video games are only possible because of whales. If whales could not exist due to regulations similar to drugs, they would not be developed / researched
    - newsclues 4y ago
      Drugs are generally developed with public funds at public institutions…
      - oneoff786 4y ago

irrational 4y ago

But if the US made it so they couldn’t get high profits here anymore, wouldn’t they raise prices for everyone else?

threatripper 4y ago
If they could raise the prices they would have already. If they didn't make a profit they wouldn't produce and sell the product. So the reality is, that they would just lose some of the profit but nothing else would change. As others pointed out, it would affect decisions for future research. Because you can't just rake in the money in the US you must be more wise with spending your research money.
- leaflets2 4y ago
  Maybe moving the research to lower living cost countries? > If they could raise the prices they would have already. Good point
  - junofan 4y ago
    That’s been done. Over half of trial sites are outside the US. https://www.fda.gov/media/91849/download https://www.fda.gov/media/91849/download
NotACop182 4y ago
They have two choices. Sell for X profit or make no profit. You don’t turn away making millions if someone told you you couldn’t make a billion
- deleted 4y ago
  [deleted]
- junofan 4y ago
  Drugs must be developed before they may be sold. The two choices are develop/not develop. The drug developer may use a spreadsheet to calculate NPV. If negative, the drug is not developed.
oblio 4y ago
In single payer systems, they can't. The government literally tells you "you sell it for this much". And guess what, "that much" already covers their costs plus profit, so they keep selling. It's just profitable for them to price gouge you, and you don't fight back, at all.
- otterley 4y ago
  Sorry, but how exactly do you know how the finances work out for pharmaceutical development, manufacturing, and distribution around the world? You seem to know an awful lot about this.
  - oblio 4y ago
    1. If you're defending large corporations, always assume that they're adversarial. They're machines made to defend themselves/attack opponents. When posting in their favor, be careful not to become a shill for them, accidentally. As a general rule, defending the "big guy" on their behalf is generally a losing strategy. They can defend themselves already, no need to stand up for them. 2. I have family working in the medical and pharma fields. 3. I doesn't even matter what and who I know, this tells you everything you need to know: https://www.macrotrends.net/stocks/charts/PFE/pfizer/gross-profit https://www.macrotrends.net/stocks/charts/PFE/pfizer/gross-p... The profit graphs for most of the Big Pharmas look similar. They're hugely profitable. For sure they could lose a chunk of that and do fine. It's just greed. A bit of greed shows ambition. A lot of greed corrodes everything. It's just pathological at some point (money is not points on a mobile game leaderboard!).
    - otterley 4y ago
      Knowing the overall profit of the business doesn’t tell you exactly where the profits are coming from or how margins differ among different product lines and markets. I think we should refrain from claiming specific knowledge of a business’s finances and making confident conclusions unless we have more granular data or are actually employed by the businesses in question.

oneoff786 4y ago

If drug X costs 1B to research and you can sell it for a gross margin of $1 in Europe and $100 in US and you expect the lifetime total gross income to be 10.1B it’s a good thing to invest in. If both countries are limited to a gross margin of $1 and you expect the lifetime gross income to be 0.2B this is now going to be a massive net loss. So you will not invest in it.

newsclues 4y ago
If you make an addictive pay to win mobile app, and you make $1/user but have a single whale user who dumps $1000 a month into the game. If the whale suddenly stops paying, you can continue to profit from regular customers you just don’t make the obscene profit from before. Can corporations continue to survive with less profit? I think some individuals have to learn to live with less income, so I’m sure a big pharmaceutical company can figure it out, I’ve had to cut out most meat from my diet in lean times, I’m sure pharmaceutical executives can do something similar.
- oneoff786 4y ago
  No, you’ve entirely missed the point. There is a large, up front research cost to drugs (and video games). If you have no whales, you might not expect the game to ever achieve enough gross revenue (revenue minus variable costs, sort of) to offset the research costs. Given you already have the drug, sure, it makes sense to keep selling it. But if you try to research more drugs and make more games with no whales, you will quickly go out of business. The video game analogy is apt. These kinds of video games are only possible because of whales. If whales could not exist due to regulations similar to drugs, they would not be developed / researched
  - newsclues 4y ago
    Drugs are generally developed with public funds at public institutions…
    - oneoff786 4y ago