5 ms·

If you produce something socially useless, no one cares how much you charge for it, but if you produce something that saves lives, then it's "greedy" to charge

If you produce something socially useless, no one cares how much you charge for it, but if you produce something that saves lives, then it's "greedy" to charge as much money as possible for it.

thomassmith65 4y ago
Worded differently: the less captive the audience, the less significant is the issue of price-gauging.
- robnado 4y ago
  Worded differently: when the demand curve is inelastic, changes in price don’t change demand much in the short term. For more elastic curves, higher prices reduce demand a lot more, which incentivizes setting a lower price if businesses are to optimize profit.
  - anticensor 4y ago
    Yeah, pricing-based manipulation works only best if supply is completely inelastic but demand is completely elastic.
from 4y ago
What people also don't realize is that they only have the 20 year patent period to make money in. After that the drug is copied by generics companies. This incentivises innovation while also not placing a permanent burden on the economy. Pharmaceuticals are 10-20% of healthcare spending and probably have a very good $/lives saved ratio. Isn't it great how you can just take cefalexin instead of having to get cut open and have an infection drained? 90% of all prescriptions in America are for generic drugs that cost almost nothing. It's easy to blame pharmaceutical companies because it is a somewhat concentrated industry but no one questions why their local urgent care physician is making $275,000 a year to basically Google symptoms and give out prescriptions.
- Sebguer 4y ago
  You're preaching a completely false dichotomy here, especially given that much of the research is publicly funded or heavily based upon existing public research, anyway.
  - from 4y ago
    I assume you're referring to studies like https://www.pnas.org/doi/10.1073/pnas.1715368115 https://www.pnas.org/doi/10.1073/pnas.1715368115 that say publicly funded research has contributed to many major drugs. Yes that is true, but exactly how much is hard to quantify. If designing a new drug just required mooching off existing research the return on investment for making a new drug wouldn't be so high -- there is a reason every week small cap pharmaceutical companies on the NASDAQ either 10x or go to zero because of a drug approval/rejection. They are taking an enormous amount of risk! The average drug that gets approved cost a billion dollars to make. And I can find studies like: https://www.cbo.gov/publication/57126 https://www.cbo.gov/publication/57126 > In 2019, the pharmaceutical industry spent $83 billion dollars on R&D. Adjusted for inflation, that amount is about 10 times what the industry spent per year in the 1980s.
- mlsu 4y ago
  This is the sad reality. Doctors, hospitals, and healthcare admin. staff consume the fat of healthcare market failure. But nobody wants to blame them -- they like their doctor; being a doctor is hard, so if you are a doctor you deserve a Ferrari.
- tombert 4y ago
  I can’t speak for anyone else, but I absolutely question every aspect of why healthcare in the US is overpriced, including but not limited to overcharging for stuff that is a glorified search on webmd.
- sanp 4y ago
  The 20 year period is based on the assumption that allowing it is beneficial to society overall (inventor shares details to further human knowledge and in return gets to monetize). If this assumption is no longer valid (when pharma companies overcharge) then why should we continue to support such an arrangement?
guerrilla 4y ago
Yes, when your life doesn't depend on it, then you don't care as much if someone is trying to exploit you.
tombert 4y ago
Isn’t this the exact justification that Martin Shkreli used? It’s not hypocritical; when your life literally depends on something, and they have a monopoly on the only thing that will save your life, it’s absolutely greedy to try and maximize profits. When Apple overcharges for an iPhone, there are a few things that make this less evil: 1. There are lots of different smartphones out there that you have the option to buy instead. Even when I worked at Apple I found it surprisingly easy to get by on an Android for my first three months. 2. I don’t die when I don’t have an iPhone.
- throwawaymaths 4y ago
  Not justifying fleecing taxpayers, but you also generally don't pay for drugs, your insurance or Medicare does. Most pharma (including iirc shkreli's) companies have access programs. Not justifying Martin or excessive pharma prices but it really is the case that we should disabuse ourselves from the notion that one should be entitled to life-saving care. That process comes with a lot of externalities. Most drugs are incredibly costly to manufacture in terms of environmental damage (petrochemical solvents and cosolvents, water for purification, etc). I loved my dad but when he was dying I remember wondering why our society was bearing the ~100k per week cost because he didn't want to die. When mom was too weak to pull the plug I stepped in and made the hard (easy?) choice.
  - becuzThrowaway 4y ago
    > but it really is the case that we should disabuse ourselves from the notion that one should be entitled to life-saving care. I couldn't disagree more. If it truly is life-saving (as opposed to death-prolonging) care, we really should _dedicate_ ourselves to the notion that each of us should be entitled to life-saving care. That should be an explicit part of the social contract. Oh, and btw, society was NOT paying ~100k to keep your dad alive. Assuming you're here in the U.S., if you were looking at medical bills to figure out that number, SURPRISE! those numbers are just made up. (Seriously, they're fiction) That's not to say that you made the wrong choice with your dad, mind you. We do tend to prolong life way past the point of cruelty in this country.
manuelabeledo 4y ago
Well, yeah? That is, essentially, the definition of greed: a "selfish and excessive desire for something". I would say that excluding people from accessing life saving drugs, is definitely "greedy", even more so if the company has received a massive influx of cash from the government, like Moderna.
pdonis 4y ago
> if you produce something that saves lives, then it's "greedy" to charge as much money as possible for it. If you take billions of taxpayer money to fund your research and get special access to information from government agencies like the NIH that the taxpayers paid for, and then you try to quadruple the price of what you're producing after you've already sold billions of units at a nice tidy profit, yes, that's greedy. If pharmaceutical companies were free market entities who took all of the risk of developing new drugs, then it might be justifiable for them to charge whatever the market will bear. But that's not how drug research works in our society; in our society, we already pay for much of the research with our taxes, so pharma companies that are doing parts of the research and producing the drugs are not operating in a free market. They are benefiting from government largesse, and there are limitations that go along with that.
- nhchris 4y ago
  > in our society, we already pay for much of the research with our taxes I don't know if there was a study done for the Moderna vaccine funding, but the AstraZeneca vaccine research was 97% publicly funded, so "much" is an understatement. https://www.theguardian.com/science/2021/apr/15/oxfordastrazeneca-covid-vaccine-research-was-97-publicly-funded https://www.theguardian.com/science/2021/apr/15/oxfordastraz...
- phpisthebest 4y ago
  >>If you take billions of taxpayer money to fund your research and get special access to information from government agencies like the NIH that the taxpayers paid for, and And exemption from all legal liability for your product even if due to quality control issues during manufacturing....
- blooalien 4y ago
  > … "and there are limitations that go along with that." There would be limitations if those governments involved weren't populated almost entirely by corporate owned puppets.
Swenrekcah 4y ago
Yes it is. It’s the “as much money as possible” part that makes it so. It’s fine to charge cost plus some nice profit. But trying to maximise the price in a medical context is morally equivalent to finding a person dying in the desert and making them sign all their assets over to you before giving them water.
happytoexplain 4y ago
You're putting the word greedy in quotes, but what you're saying is exactly correct. People will pay anything to save their own life. If the market is allowed to react to that in an unrestricted manner, that quickly raises the wealth floor on being able to save your own life, which is, patently, morally incorrect in cases where the profit margin is high. It is antithetical to civilization. The fact that people who disagree with that high-level concept in the broad sense are not vanishingly rare is a desperate societal emergency.
detrites 4y ago
Whether true or apocryphal, there exists this intriguing idea that in China's past, they had a system of medicine where doctors were paid a salary when the client was in good health, which immediately ceased if they fell ill. What's interesting about this, is the rest of the world typically does exactly this, with almost everything but not medicine. With medicine, people can pay more and more for products and services that are working less and less.
- luckylion 4y ago
  We do that with "almost everything"? I can't think of anything. I don't think e.g. phone service is comparable, because while you might not pay when the service is down, the service's uptime doesn't depend on you. If you destroy your cell phone, you can't use the service, but the service is still working. If you sold "medicine as a service", it would just include that, but it couldn't guarantee that you'd always be healthy, no matter what choices you made.
  - detrites 4y ago
    Sure we do, as soon as anything degrades or completely stops working, whether a product or service, we ditch it and/or it is worked on until it's fixed. Whereas with medicine, people will sit there and let the system slowly and agonisingly fail them over and over again, at tremendous personal expense, until they are literally dead. Medical malpractice - that is, a medical professional getting their treatment provably wrong to the point it causes death instead of prevents it - has been a leading cause of death (in the top 5) for decades. It's somewhat of an inversion of capitalism that such a dysfunction persists in just this one area. Your analogy with cellphones doesn't relate this because cellphones work. If instead, they also ranked top 5 out of all failed any-distance communications methods, alongside smoke-signals, pigeons, cans-on-a-string and megaphones, development would be focused on until they rank better. When medical malpractice ranks in the bottom 5 causes of death, the positive mechanisms of capitalism will be functioning in this area.
    - luckylion 4y ago
bobkazamakis 4y ago
...yes? Why is "greedy" in scare quotes?
scotty79 4y ago
That is correct. If you are away from me then I don't care. If I'm falling to my death but you somehow managed to grab the rope and can stop my fall and pull me back up but instead you use this opportunity to demand as much money from me as possible then calling you "greedy" is literally mildest what anyone can call you.
- lost_tourist 4y ago
  The hep c vaccine is one of the biggest examples of this. No money, no cure.
harimau777 4y ago
It's more: If you withhold something that saves lives from people who can't afford it, then it's greedy.
sanp 4y ago
They make money because patents prevent others from producing that “something”. The justification for patents is that the inventor gets to milk their invention in return for sharing how they did it. This is based on the an assumption that society as a whole benefits from this arrangement. So, if society as a whole is not benefiting from patents because pharma companies are charging obscene amounts then it is time to get rid of patents for medicines (or regulate how much pharma companies get to charge).

If you produce something socially useless, no one cares how much you charge for it, but if you produce something that saves lives, then it's "greedy" to charge as much money as possible for it.

thomassmith65 4y ago

Worded differently: the less captive the audience, the less significant is the issue of price-gauging.

robnado 4y ago
Worded differently: when the demand curve is inelastic, changes in price don’t change demand much in the short term. For more elastic curves, higher prices reduce demand a lot more, which incentivizes setting a lower price if businesses are to optimize profit.
- anticensor 4y ago
  Yeah, pricing-based manipulation works only best if supply is completely inelastic but demand is completely elastic.

from 4y ago

What people also don't realize is that they only have the 20 year patent period to make money in. After that the drug is copied by generics companies. This incentivises innovation while also not placing a permanent burden on the economy. Pharmaceuticals are 10-20% of healthcare spending and probably have a very good $/lives saved ratio. Isn't it great how you can just take cefalexin instead of having to get cut open and have an infection drained? 90% of all prescriptions in America are for generic drugs that cost almost nothing. It's easy to blame pharmaceutical companies because it is a somewhat concentrated industry but no one questions why their local urgent care physician is making $275,000 a year to basically Google symptoms and give out prescriptions.

Sebguer 4y ago
You're preaching a completely false dichotomy here, especially given that much of the research is publicly funded or heavily based upon existing public research, anyway.
- from 4y ago
  I assume you're referring to studies like https://www.pnas.org/doi/10.1073/pnas.1715368115 https://www.pnas.org/doi/10.1073/pnas.1715368115 that say publicly funded research has contributed to many major drugs. Yes that is true, but exactly how much is hard to quantify. If designing a new drug just required mooching off existing research the return on investment for making a new drug wouldn't be so high -- there is a reason every week small cap pharmaceutical companies on the NASDAQ either 10x or go to zero because of a drug approval/rejection. They are taking an enormous amount of risk! The average drug that gets approved cost a billion dollars to make. And I can find studies like: https://www.cbo.gov/publication/57126 https://www.cbo.gov/publication/57126 > In 2019, the pharmaceutical industry spent $83 billion dollars on R&D. Adjusted for inflation, that amount is about 10 times what the industry spent per year in the 1980s.
mlsu 4y ago
This is the sad reality. Doctors, hospitals, and healthcare admin. staff consume the fat of healthcare market failure. But nobody wants to blame them -- they like their doctor; being a doctor is hard, so if you are a doctor you deserve a Ferrari.
tombert 4y ago
I can’t speak for anyone else, but I absolutely question every aspect of why healthcare in the US is overpriced, including but not limited to overcharging for stuff that is a glorified search on webmd.
sanp 4y ago
The 20 year period is based on the assumption that allowing it is beneficial to society overall (inventor shares details to further human knowledge and in return gets to monetize). If this assumption is no longer valid (when pharma companies overcharge) then why should we continue to support such an arrangement?

guerrilla 4y ago

Yes, when your life doesn't depend on it, then you don't care as much if someone is trying to exploit you.

tombert 4y ago

Isn’t this the exact justification that Martin Shkreli used? It’s not hypocritical; when your life literally depends on something, and they have a monopoly on the only thing that will save your life, it’s absolutely greedy to try and maximize profits. When Apple overcharges for an iPhone, there are a few things that make this less evil: 1. There are lots of different smartphones out there that you have the option to buy instead. Even when I worked at Apple I found it surprisingly easy to get by on an Android for my first three months. 2. I don’t die when I don’t have an iPhone.

throwawaymaths 4y ago
Not justifying fleecing taxpayers, but you also generally don't pay for drugs, your insurance or Medicare does. Most pharma (including iirc shkreli's) companies have access programs. Not justifying Martin or excessive pharma prices but it really is the case that we should disabuse ourselves from the notion that one should be entitled to life-saving care. That process comes with a lot of externalities. Most drugs are incredibly costly to manufacture in terms of environmental damage (petrochemical solvents and cosolvents, water for purification, etc). I loved my dad but when he was dying I remember wondering why our society was bearing the ~100k per week cost because he didn't want to die. When mom was too weak to pull the plug I stepped in and made the hard (easy?) choice.
- becuzThrowaway 4y ago
  > but it really is the case that we should disabuse ourselves from the notion that one should be entitled to life-saving care. I couldn't disagree more. If it truly is life-saving (as opposed to death-prolonging) care, we really should _dedicate_ ourselves to the notion that each of us should be entitled to life-saving care. That should be an explicit part of the social contract. Oh, and btw, society was NOT paying ~100k to keep your dad alive. Assuming you're here in the U.S., if you were looking at medical bills to figure out that number, SURPRISE! those numbers are just made up. (Seriously, they're fiction) That's not to say that you made the wrong choice with your dad, mind you. We do tend to prolong life way past the point of cruelty in this country.

manuelabeledo 4y ago

Well, yeah? That is, essentially, the definition of greed: a "selfish and excessive desire for something". I would say that excluding people from accessing life saving drugs, is definitely "greedy", even more so if the company has received a massive influx of cash from the government, like Moderna.

pdonis 4y ago

> if you produce something that saves lives, then it's "greedy" to charge as much money as possible for it. If you take billions of taxpayer money to fund your research and get special access to information from government agencies like the NIH that the taxpayers paid for, and then you try to quadruple the price of what you're producing after you've already sold billions of units at a nice tidy profit, yes, that's greedy. If pharmaceutical companies were free market entities who took all of the risk of developing new drugs, then it might be justifiable for them to charge whatever the market will bear. But that's not how drug research works in our society; in our society, we already pay for much of the research with our taxes, so pharma companies that are doing parts of the research and producing the drugs are not operating in a free market. They are benefiting from government largesse, and there are limitations that go along with that.

nhchris 4y ago
> in our society, we already pay for much of the research with our taxes I don't know if there was a study done for the Moderna vaccine funding, but the AstraZeneca vaccine research was 97% publicly funded, so "much" is an understatement. https://www.theguardian.com/science/2021/apr/15/oxfordastrazeneca-covid-vaccine-research-was-97-publicly-funded https://www.theguardian.com/science/2021/apr/15/oxfordastraz...
phpisthebest 4y ago
>>If you take billions of taxpayer money to fund your research and get special access to information from government agencies like the NIH that the taxpayers paid for, and And exemption from all legal liability for your product even if due to quality control issues during manufacturing....
blooalien 4y ago
> … "and there are limitations that go along with that." There would be limitations if those governments involved weren't populated almost entirely by corporate owned puppets.

Swenrekcah 4y ago

Yes it is. It’s the “as much money as possible” part that makes it so. It’s fine to charge cost plus some nice profit. But trying to maximise the price in a medical context is morally equivalent to finding a person dying in the desert and making them sign all their assets over to you before giving them water.

happytoexplain 4y ago

You're putting the word greedy in quotes, but what you're saying is exactly correct. People will pay anything to save their own life. If the market is allowed to react to that in an unrestricted manner, that quickly raises the wealth floor on being able to save your own life, which is, patently, morally incorrect in cases where the profit margin is high. It is antithetical to civilization. The fact that people who disagree with that high-level concept in the broad sense are not vanishingly rare is a desperate societal emergency.

detrites 4y ago

Whether true or apocryphal, there exists this intriguing idea that in China's past, they had a system of medicine where doctors were paid a salary when the client was in good health, which immediately ceased if they fell ill. What's interesting about this, is the rest of the world typically does exactly this, with almost everything but not medicine. With medicine, people can pay more and more for products and services that are working less and less.

luckylion 4y ago
We do that with "almost everything"? I can't think of anything. I don't think e.g. phone service is comparable, because while you might not pay when the service is down, the service's uptime doesn't depend on you. If you destroy your cell phone, you can't use the service, but the service is still working. If you sold "medicine as a service", it would just include that, but it couldn't guarantee that you'd always be healthy, no matter what choices you made.
- detrites 4y ago
  Sure we do, as soon as anything degrades or completely stops working, whether a product or service, we ditch it and/or it is worked on until it's fixed. Whereas with medicine, people will sit there and let the system slowly and agonisingly fail them over and over again, at tremendous personal expense, until they are literally dead. Medical malpractice - that is, a medical professional getting their treatment provably wrong to the point it causes death instead of prevents it - has been a leading cause of death (in the top 5) for decades. It's somewhat of an inversion of capitalism that such a dysfunction persists in just this one area. Your analogy with cellphones doesn't relate this because cellphones work. If instead, they also ranked top 5 out of all failed any-distance communications methods, alongside smoke-signals, pigeons, cans-on-a-string and megaphones, development would be focused on until they rank better. When medical malpractice ranks in the bottom 5 causes of death, the positive mechanisms of capitalism will be functioning in this area.
  - luckylion 4y ago

bobkazamakis 4y ago

...yes? Why is "greedy" in scare quotes?

scotty79 4y ago

That is correct. If you are away from me then I don't care. If I'm falling to my death but you somehow managed to grab the rope and can stop my fall and pull me back up but instead you use this opportunity to demand as much money from me as possible then calling you "greedy" is literally mildest what anyone can call you.

lost_tourist 4y ago
The hep c vaccine is one of the biggest examples of this. No money, no cure.

harimau777 4y ago

It's more: If you withhold something that saves lives from people who can't afford it, then it's greedy.

sanp 4y ago

They make money because patents prevent others from producing that “something”. The justification for patents is that the inventor gets to milk their invention in return for sharing how they did it. This is based on the an assumption that society as a whole benefits from this arrangement. So, if society as a whole is not benefiting from patents because pharma companies are charging obscene amounts then it is time to get rid of patents for medicines (or regulate how much pharma companies get to charge).