5 ms·

How Big Pharma reaps profits while hurting everyday Americans (2019)

106 points by hammock 3y ago

AlbertCory 3y ago
From 2019. Maybe an update now that Biden's been in office a while would be appropriate?
- infamouscow 3y ago
  The legislative branch of government passes laws, not the executive. Why would Biden being in office change anything unless he signed an executive order specifically about this?
  - AlbertCory 3y ago
    > unless he signed an executive order specifically about this? .. and we all know he would never sign an order that he knew was unconstitutional /s
    - infamouscow 3y ago
      If a president intends to start crossing out parts of the constitution like a todo list of line items as you're asserting, it makes a lot more sense to come out and actually say that in the executive orders to avoid any uncertainty or ambiguity. It also completely ignores how the last several presidents signed executive orders later ruled by the courts to be partially unconstitutional. The most charitable interpretation is: through a wildly convoluted method involving underwater jumping-jacks and singing Sinatra lyrics during a half moon on even calendar days, the president's EO are going to stealthily erode the constitution and the checks and balances will somehow fail even though it's counterfactual to reality.
eganist 3y ago
Pharma strikes me as one of the industries that would benefit heavily from a few congressionally chartered nonprofits being booted up. Same employee comp (with cash substitutes for stock), same general structure, same incentives, but with a mandate to recycle profits back into new drug development rather than paying out to shareholders through buybacks, dividends, etc, all audited by a dedicated regulatory body to ensure that comp and waste don't go into excess. Perhaps with a requirement that some percentage of reinvestment is towards cures rather than treatments. You see similar models with co-ops and credit unions. The hope would be that the industry doesn't actually profit off of human suffering but still maintains incentive to continue development.
- gruez 3y ago
  Pharmaceuticals is a pretty capital intensive industry. Who's providing the capital? The government? Moreover, who's providing oversight? Congress? Given how dysfunctional the government is right now, and the tendency of government programs to turn into jobs/pork barrel programs (eg. F35), I'm skeptical that it's going to work out better.
  - revlolz 3y ago
    I'm in agreement here, I think the poster has an idea of the issue with profits, but typically anything the government can do, we can do infinitely better private.
  - pjc50 3y ago
    Moreover, what happens to all the work in progress when the government "shuts down"? People in publicly funded science have lost work in previous incidents where they were locked out of their buildings and unable to tend to long running experiments. America needs to work on its uptime.
  - deleted 3y ago
    [deleted]
  - Jensson 3y ago
    > Pharmaceuticals is a pretty capital intensive industry. The larger part of that is sales and marketing. They spend more on sales and marketing than research and development in USA. All that is wasted, publishing lots of manipulative ads and marketing material to get as many as possible to buy the most expensive medicines isn't a good use of our resources. 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...
    - gruez 3y ago
      1. The study in question is from ahip, which is a trade association of health insurance providers. They have an incentive to push the blame of high healthcare costs on other companies, so claims by them should be taken with a grain of salt. 2. The above link doesn't actually actually provide the study, or mention the methodology. However searching around[1] it looks like similar claims in the past have issues, mainly due to how expenses are categorized in financial statements. Specifically, advertising/marketing spend is often lumped together with general and administrative spend, which overstates that figure. [1] https://skeptics.stackexchange.com/questions/16472/do-typical-modern-pharmaceutical-firms-spend-more-on-marketing-than-on-rd https://skeptics.stackexchange.com/questions/16472/do-typica...
random6754478 3y ago
[flagged]
- bigtex 3y ago
  You are being downvoted but the contrast in treatment in regard to big Pharma is something to behold. They go from punching bag to media darling in the span of a year.
  - random6754478 3y ago
    [flagged]
jmyeet 3y ago
The only "innovation" of capitalism is intermediation, otherwise called "rent-seeking". One of the big lies Big Pharma tells you is that R&D is expensive but the actual R&D is done primarily by government funding and research at colleges. Big Pharma spends WAAY more on marketing. The only real R&D Big Pharma does is patent extension. Patents have a life so companies will make minor changes to the molecule or the delivery mechanism to reset that patent protection period. What makes Big Pharma particularly evil is it's one of those industries that profits from inelastic demand (ie people will die without some product) and buying the government to build a moat and make themselves a monopoly. The prices US consumers pay for pharmaceuticals is absolutely criminal. This is capitalism working as intended: taking a captive market (eg diabetics that cannot live without insulin) and extracting wealth from them to the hands of a very few.
- hash872 3y ago
  >One of the big lies Big Pharma tells you is that R&D is expensive but the actual R&D is done primarily by government funding and research at colleges Not an expert, but my understanding is that the kind of basic science R&D done by the government and academia is the simplest and easiest type of research to do by far. As it was explained to me- anyone can invent new compounds, the really really really hard low-percentage stuff is trialing that those new compounds are A) medically effective in people, and B) actually safe for people and don't have strong side effects. Also, I believe that if academia actually does invent something novel & useful, they license it out to pharma companies for a % of the profits. Big universities are not shy at all about licensing their IP
  - RcouF1uZ4gsC 3y ago
    > Not an expert, but my understanding is that the kind of basic science R&D done by the government and academia is the simplest and easiest type of research to do by far. Yeah it is easy to come up with stuff that works in a lab. For example, just see the HN submissions for new battery technology.
  - mrosett 3y ago
    This is entirely correct.
RcouF1uZ4gsC 3y ago
> A vial of NovoLog, one type of insulin, costs15 anywhere from $14 to $300 in the United States but only $48 in Singapore, $14 in India, $6 in Austria, and $0 in Italy. I think a reasonable solution without having to dictate details is to require pharmaceutical companies give the US most favored nation status - that is they must provide the US the same price as the country where it is sold for the cheapest. Perhaps you exclude developing nations from that calculation.
- willcipriano 3y ago
  I'd bet even buying at the 2nd most expensive OECD nations price would make a huge dent and seems more than reasonable for all the tax breaks and other incentives pharmacal companies receive.
- nine_k 3y ago
  I think that it only "costs" $0 in Italy because the actual cost is paid by some subsidy or insurance system. Also, insulin is a prescription medicine, so even in the absence of such confounding factors its price is not entirely market-driven; we have a nebulous understanding what the equilibrium price would be on a free market.
  - clankyclanker 3y ago
    > we have a nebulous understanding what the equilibrium price would be on a free market. I can’t imagine a free market existing in the US without PS5-style-resellers immediately buying out the entire supply and jacking up the price for drugs people need to live. Not like that’s significantly different than what we have now, it’d just be a worse version.
99_00 3y ago
It was amazing to see skepticism and criticism of big pharma become forbid during COVID with many citizens happily shaming, ostracizing, and censoring others. And then to see it suddenly be allowed again. Extremely fascinating.
- mullen 3y ago
  This article is from 2019 and second, I don't think anyone questions the validity of the results of Big Pharma, just the price, transparency and lack of willingness to allow the US Federal government to collectively price bargain.
  - logicchains 3y ago
    People absolutely question the results of big pharma. Americans nowadays are less healthier and have lower life expectancies than their parents' generation, and while some of that may be due to lifestyle choices, some is due to pharma pushing drugs that are a net negative, like the unnecessary opioids that caused an addiction epidemic.
    - bart_spoon 3y ago
      The opioid epidemic isn’t making a dent in the lower life expectancy. Lower life expectancy is almost entirely due to heart diseases, diabetes, and cancer, and those are being driven primarily by bad diets, poor sleep, and sedentary lifestyles. Ironically, FAANG and many tech companies are probably more to blame in this respect than Pharma.
      - logicchains 3y ago
        >The opioid epidemic isn’t making a dent in the lower life expectancy That's absolutely false. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6034969/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6034969/ for instance found that in British Columbia from 2014 to 2016, life expectancy declined 0.38 years of which 0.12 years of the decline was due to "mainly opioid-involved" overdoses, i.e. opioids were responsible for around a third of the reduction in life expectancy.
Obscurity4340 3y ago
Its kind of amazing how a basic medication like Wellbutrin XL is like $1.18/dose while in the US, you're looking at $83/dose ($2483/30 at Walgreens). Same damn pill, free market capitalism my ass.
- google234123 3y ago
  I pay like 15$ for 30 - I don’t know what you are talking about
  - Obscurity4340 3y ago
    1) Generic or brand (sounds like generic) 2) This is for Wellbutrin XL 300 (30 day script) 3) that's with insurance? Sounds likeyou're insured
- rr808 3y ago
  https://www.goodrx.com/wellbutrin-xl https://www.goodrx.com/wellbutrin-xl says $29 at Walgreens and most other pharmacists - some much cheaper.
rr808 3y ago
The hate on big Pharma is crazy to me. They're actually a pretty small part of the healthcare bill: 8.9%. Even if drugs were free your health insurance bill would be pretty much the same. https://www.ama-assn.org/about/research/trends-health-care-spending https://www.ama-assn.org/about/research/trends-health-care-s...
- AussieWog93 3y ago
  Depends who you are. For people with certain lifelong conditions, the drug component would make up almost 100% of their healthcare costs.
xyst 3y ago
“Big Pharma” is a symptom of a much larger issue in the USA. The root cause here is privatization of health care. I hate dealing with the health insurance middlemen, and I supposedly have premium coverage. For some treatments my (in network) doctors prescribes, my insurance company will drag their ass through the approval and payout process. It’s slightly invisible to me, and the doctors office staff usually takes care of the appeals process to get themselves paid. Occasionally I get a doctors office that gives up after 1 appeal and tries to forward me the bill for the rest. End up having to appeal myself and get it approved. These vampires take their cut from my paycheck (in addition to the portion covered by my workplace). And they have the fucking nerve to deny treatments. Let’s not forget about the mess with “pharmacy benefit managers” and their associated fees (“DIR” fees) on pharmacies. Large chains typically tank these costs through volume, but end up squeezing out the mom & pop pharmacies.
rawland 3y ago
Same with the hearing aid and many other heath care industries.

106 points by hammock 3y ago

AlbertCory 3y ago

From 2019. Maybe an update now that Biden's been in office a while would be appropriate?

infamouscow 3y ago
The legislative branch of government passes laws, not the executive. Why would Biden being in office change anything unless he signed an executive order specifically about this?
- AlbertCory 3y ago
  > unless he signed an executive order specifically about this? .. and we all know he would never sign an order that he knew was unconstitutional /s
  - infamouscow 3y ago
    If a president intends to start crossing out parts of the constitution like a todo list of line items as you're asserting, it makes a lot more sense to come out and actually say that in the executive orders to avoid any uncertainty or ambiguity. It also completely ignores how the last several presidents signed executive orders later ruled by the courts to be partially unconstitutional. The most charitable interpretation is: through a wildly convoluted method involving underwater jumping-jacks and singing Sinatra lyrics during a half moon on even calendar days, the president's EO are going to stealthily erode the constitution and the checks and balances will somehow fail even though it's counterfactual to reality.

eganist 3y ago

Pharma strikes me as one of the industries that would benefit heavily from a few congressionally chartered nonprofits being booted up. Same employee comp (with cash substitutes for stock), same general structure, same incentives, but with a mandate to recycle profits back into new drug development rather than paying out to shareholders through buybacks, dividends, etc, all audited by a dedicated regulatory body to ensure that comp and waste don't go into excess. Perhaps with a requirement that some percentage of reinvestment is towards cures rather than treatments. You see similar models with co-ops and credit unions. The hope would be that the industry doesn't actually profit off of human suffering but still maintains incentive to continue development.

gruez 3y ago
Pharmaceuticals is a pretty capital intensive industry. Who's providing the capital? The government? Moreover, who's providing oversight? Congress? Given how dysfunctional the government is right now, and the tendency of government programs to turn into jobs/pork barrel programs (eg. F35), I'm skeptical that it's going to work out better.
- revlolz 3y ago
  I'm in agreement here, I think the poster has an idea of the issue with profits, but typically anything the government can do, we can do infinitely better private.
- pjc50 3y ago
  Moreover, what happens to all the work in progress when the government "shuts down"? People in publicly funded science have lost work in previous incidents where they were locked out of their buildings and unable to tend to long running experiments. America needs to work on its uptime.
- deleted 3y ago
  [deleted]
- Jensson 3y ago
  > Pharmaceuticals is a pretty capital intensive industry. The larger part of that is sales and marketing. They spend more on sales and marketing than research and development in USA. All that is wasted, publishing lots of manipulative ads and marketing material to get as many as possible to buy the most expensive medicines isn't a good use of our resources. 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...
  - gruez 3y ago
    1. The study in question is from ahip, which is a trade association of health insurance providers. They have an incentive to push the blame of high healthcare costs on other companies, so claims by them should be taken with a grain of salt. 2. The above link doesn't actually actually provide the study, or mention the methodology. However searching around[1] it looks like similar claims in the past have issues, mainly due to how expenses are categorized in financial statements. Specifically, advertising/marketing spend is often lumped together with general and administrative spend, which overstates that figure. [1] https://skeptics.stackexchange.com/questions/16472/do-typical-modern-pharmaceutical-firms-spend-more-on-marketing-than-on-rd https://skeptics.stackexchange.com/questions/16472/do-typica...

random6754478 3y ago

[flagged]

bigtex 3y ago
You are being downvoted but the contrast in treatment in regard to big Pharma is something to behold. They go from punching bag to media darling in the span of a year.
- random6754478 3y ago
  [flagged]

jmyeet 3y ago

The only "innovation" of capitalism is intermediation, otherwise called "rent-seeking". One of the big lies Big Pharma tells you is that R&D is expensive but the actual R&D is done primarily by government funding and research at colleges. Big Pharma spends WAAY more on marketing. The only real R&D Big Pharma does is patent extension. Patents have a life so companies will make minor changes to the molecule or the delivery mechanism to reset that patent protection period. What makes Big Pharma particularly evil is it's one of those industries that profits from inelastic demand (ie people will die without some product) and buying the government to build a moat and make themselves a monopoly. The prices US consumers pay for pharmaceuticals is absolutely criminal. This is capitalism working as intended: taking a captive market (eg diabetics that cannot live without insulin) and extracting wealth from them to the hands of a very few.

hash872 3y ago
>One of the big lies Big Pharma tells you is that R&D is expensive but the actual R&D is done primarily by government funding and research at colleges Not an expert, but my understanding is that the kind of basic science R&D done by the government and academia is the simplest and easiest type of research to do by far. As it was explained to me- anyone can invent new compounds, the really really really hard low-percentage stuff is trialing that those new compounds are A) medically effective in people, and B) actually safe for people and don't have strong side effects. Also, I believe that if academia actually does invent something novel & useful, they license it out to pharma companies for a % of the profits. Big universities are not shy at all about licensing their IP
- RcouF1uZ4gsC 3y ago
  > Not an expert, but my understanding is that the kind of basic science R&D done by the government and academia is the simplest and easiest type of research to do by far. Yeah it is easy to come up with stuff that works in a lab. For example, just see the HN submissions for new battery technology.
- mrosett 3y ago
  This is entirely correct.

RcouF1uZ4gsC 3y ago

> A vial of NovoLog, one type of insulin, costs15 anywhere from $14 to $300 in the United States but only $48 in Singapore, $14 in India, $6 in Austria, and $0 in Italy. I think a reasonable solution without having to dictate details is to require pharmaceutical companies give the US most favored nation status - that is they must provide the US the same price as the country where it is sold for the cheapest. Perhaps you exclude developing nations from that calculation.

willcipriano 3y ago
I'd bet even buying at the 2nd most expensive OECD nations price would make a huge dent and seems more than reasonable for all the tax breaks and other incentives pharmacal companies receive.
nine_k 3y ago
I think that it only "costs" $0 in Italy because the actual cost is paid by some subsidy or insurance system. Also, insulin is a prescription medicine, so even in the absence of such confounding factors its price is not entirely market-driven; we have a nebulous understanding what the equilibrium price would be on a free market.
- clankyclanker 3y ago
  > we have a nebulous understanding what the equilibrium price would be on a free market. I can’t imagine a free market existing in the US without PS5-style-resellers immediately buying out the entire supply and jacking up the price for drugs people need to live. Not like that’s significantly different than what we have now, it’d just be a worse version.

99_00 3y ago

It was amazing to see skepticism and criticism of big pharma become forbid during COVID with many citizens happily shaming, ostracizing, and censoring others. And then to see it suddenly be allowed again. Extremely fascinating.

mullen 3y ago
This article is from 2019 and second, I don't think anyone questions the validity of the results of Big Pharma, just the price, transparency and lack of willingness to allow the US Federal government to collectively price bargain.
- logicchains 3y ago
  People absolutely question the results of big pharma. Americans nowadays are less healthier and have lower life expectancies than their parents' generation, and while some of that may be due to lifestyle choices, some is due to pharma pushing drugs that are a net negative, like the unnecessary opioids that caused an addiction epidemic.
  - bart_spoon 3y ago
    The opioid epidemic isn’t making a dent in the lower life expectancy. Lower life expectancy is almost entirely due to heart diseases, diabetes, and cancer, and those are being driven primarily by bad diets, poor sleep, and sedentary lifestyles. Ironically, FAANG and many tech companies are probably more to blame in this respect than Pharma.
    - logicchains 3y ago
      >The opioid epidemic isn’t making a dent in the lower life expectancy That's absolutely false. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6034969/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6034969/ for instance found that in British Columbia from 2014 to 2016, life expectancy declined 0.38 years of which 0.12 years of the decline was due to "mainly opioid-involved" overdoses, i.e. opioids were responsible for around a third of the reduction in life expectancy.

Obscurity4340 3y ago

Its kind of amazing how a basic medication like Wellbutrin XL is like $1.18/dose while in the US, you're looking at $83/dose ($2483/30 at Walgreens). Same damn pill, free market capitalism my ass.

google234123 3y ago
I pay like 15$ for 30 - I don’t know what you are talking about
- Obscurity4340 3y ago
  1) Generic or brand (sounds like generic) 2) This is for Wellbutrin XL 300 (30 day script) 3) that's with insurance? Sounds likeyou're insured
rr808 3y ago
https://www.goodrx.com/wellbutrin-xl https://www.goodrx.com/wellbutrin-xl says $29 at Walgreens and most other pharmacists - some much cheaper.

rr808 3y ago

The hate on big Pharma is crazy to me. They're actually a pretty small part of the healthcare bill: 8.9%. Even if drugs were free your health insurance bill would be pretty much the same. https://www.ama-assn.org/about/research/trends-health-care-spending https://www.ama-assn.org/about/research/trends-health-care-s...

AussieWog93 3y ago
Depends who you are. For people with certain lifelong conditions, the drug component would make up almost 100% of their healthcare costs.

xyst 3y ago

“Big Pharma” is a symptom of a much larger issue in the USA. The root cause here is privatization of health care. I hate dealing with the health insurance middlemen, and I supposedly have premium coverage. For some treatments my (in network) doctors prescribes, my insurance company will drag their ass through the approval and payout process. It’s slightly invisible to me, and the doctors office staff usually takes care of the appeals process to get themselves paid. Occasionally I get a doctors office that gives up after 1 appeal and tries to forward me the bill for the rest. End up having to appeal myself and get it approved. These vampires take their cut from my paycheck (in addition to the portion covered by my workplace). And they have the fucking nerve to deny treatments. Let’s not forget about the mess with “pharmacy benefit managers” and their associated fees (“DIR” fees) on pharmacies. Large chains typically tank these costs through volume, but end up squeezing out the mom & pop pharmacies.

rawland 3y ago

Same with the hearing aid and many other heath care industries.