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I’m not the OP and have no deep knowledge, but I’ve often heard cited that the US out-researches other nations, so we incur “R&D” costs for healthcare that othe

I’m not the OP and have no deep knowledge, but I’ve often heard cited that the US out-researches other nations, so we incur “R&D” costs for healthcare that other nations use. Eg pharmaceuticals are researched in the US while the patents are used in other nations through a cost structure that doesn’t allow the original researching party to recoup costs. On-shoring that research also seems to be an advantage -Looking at the astounding amount of research that poured into covid post 2020 would show that we have a huge dormant muscle that can be flexed in unison during an emergency.

Sakos 4y ago
I've never seen any convincing evidence for this theory.
- deleted 4y ago
  [deleted]
briffle 4y ago
Then why do they spend so much more on marketing than R&D? https://www.ahip.org/news/articles/new-study-in-the-midst-of-covid-19-crisis-7-out-of-10-big-pharma-companies-spent-more-on-sales-and-marketing-than-r-d https://www.ahip.org/news/articles/new-study-in-the-midst-of...
- vineyardmike 4y ago
  I’m not trying to defend pharma companies… they’re generally pretty scummy. But I’m guessing most companies spend more on marketing than R&D. Beyond that, the theory that they need to recoup costs still holds true with this. In fact, a big marketing budget indicates that they’re aggressively trying to sell the drug (maybe to recoup costs?). Generally in business marketing budgets should generate more sales than they cost (in ideal case), so big budgets doesn’t mean that they’re “wasting” that money that could go elsewhere. If the sale wouldn’t happen without an ad, then that’s a necessary ad.
  - e_i_pi_2 4y ago
    > If the sale wouldn’t happen without an ad, then that’s a necessary ad I think that's the core issue here, healthcare and pharmaceuticals have basically inelastic demand. The US is one of only two countries where it's even legal for pharma companies to advertise directly to consumers. I know in practice they can create demand for products, but that doesn't necessarily seem like a good thing, so I think you could argue that it's still a waste of money even if it does create profit for the company.

Sakos 4y ago

I've never seen any convincing evidence for this theory.

deleted 4y ago
[deleted]

briffle 4y ago

Then why do they spend so much more on marketing than R&D? https://www.ahip.org/news/articles/new-study-in-the-midst-of-covid-19-crisis-7-out-of-10-big-pharma-companies-spent-more-on-sales-and-marketing-than-r-d https://www.ahip.org/news/articles/new-study-in-the-midst-of...

vineyardmike 4y ago
I’m not trying to defend pharma companies… they’re generally pretty scummy. But I’m guessing most companies spend more on marketing than R&D. Beyond that, the theory that they need to recoup costs still holds true with this. In fact, a big marketing budget indicates that they’re aggressively trying to sell the drug (maybe to recoup costs?). Generally in business marketing budgets should generate more sales than they cost (in ideal case), so big budgets doesn’t mean that they’re “wasting” that money that could go elsewhere. If the sale wouldn’t happen without an ad, then that’s a necessary ad.
- e_i_pi_2 4y ago
  > If the sale wouldn’t happen without an ad, then that’s a necessary ad I think that's the core issue here, healthcare and pharmaceuticals have basically inelastic demand. The US is one of only two countries where it's even legal for pharma companies to advertise directly to consumers. I know in practice they can create demand for products, but that doesn't necessarily seem like a good thing, so I think you could argue that it's still a waste of money even if it does create profit for the company.