4 ms·

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

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...
- turtlesdown11 3y ago
  you're not aware that government and universities provide half the funding of basic research in the united states?
- AlbertCory 3y ago
  As usual, the biggest factor is ignored: Risk Who takes the risk of exploring a drug candidate that literally no one can predict will succeed or fail? Let's imagine the Secretary of Drug Development testifying before Congress on why so many of his drugs didn't work. His best strategy is to only pursue safe bets.
johnorourke 3y ago
Like a kind of Service, for Health, covering the whole Nation... a National Health Service, perhaps! Sorry, brit here, couldn't resist. It's really interesting seeing (in my unscientific view) America slowly realising it needs to reform profit-driven health, while England's government slowly privatises its existing "free at poinnt of use" service and makes it harder for poorer people to access good health care.
- eganist 3y ago
  https://en.wikipedia.org/wiki/Public_health_insurance_option https://en.wikipedia.org/wiki/Public_health_insurance_option for those missing the connection. NHS comes across to me as government funded healthcare rather than a gov-kickstarted not-for-profit insurance option. Am I missing a nuance? Not familiar with NHS so I could have a wildly wrong impression of what it is.
- gustavus 3y ago
  Healthcare and medication are different things and as long as we continue to conflate the 2 everyone will be talking past each other.
rqtwteye 3y ago
A good start would be if the medical industry in the US were run like normal businesses with transparent and consistent pricing. Right now nobody can predict how much something cost because insurances, hospitals, drug companies and a lot of middlemen play all kinds of games. I think we should mandate that all prices are open so people know what's actually going on. Hospitals should also charge the same price for the same procedure to everybody independently of insurance or day of the week or whatever factor makes a procedure cost $5000 sometimes and $50000 another time. All the excuses like "we need to charge more to insured people because of uninsured people" or "we need to charge 10x as much in the US for drugs than in other countries because of R&D" should be viewed as self serving BS until all the numbers are transparent. If there is an imbalance we should do direct subsidies based on the actual numbers instead of the current mess. Health care is not regular business in the sense that you don't have to buy a product if it's too expensive and where it's easy to compare competing products. How would I know which hospital is better than another?
- chiefalchemist 3y ago
  Not only that, but insurance companies get to negotiate special rates, but as an individual you have zero opportunity to do so, zero leverage. That is, to your point, the price of the service is 100% flexible. The ambiguity and confusion benefits those who are best positioned to benefit from it, that's not the individual. It's a system optimized to be self-serving. It's the Healthcare Industrial Complex, that doesn't actually care much about health. Profits over people.
- pfisherman 3y ago
  Absolutely! The truth is that nobody really knows what medications actually cost. They are often sold in bundles similar to cable tv channels. For those who are running into coverage / affordability problems for drugs in the US… contact the manufacturer. They often have payment assistance programs or discounts to reduce out of pocket costs. They may be able to help you get costs covered by your insurer. You should not ever be paying the full “list price” out of pocket. Pharma companies want market share and they would rather sell to you at a discount than lose you as a customer.
- 3y ago
WalterBright 3y ago
I.e. you want the government to run industry. That never works well. > all audited by a dedicated regulatory body to ensure that comp and waste don't go into excess Since when has that ever worked for government run operations? > The hope would be that the industry doesn't actually profit off of human suffering I.e. industry works to alleviate suffering by providing the things that suffering people want. Their motivation is to make a profit. The profit tends to be far less than the waste from the inefficiency of government industry. BTW, the drug industry would serve us a lot better if they weren't strangled by FDA regulations and a screwed up patent system. See "Regulation of Pharmaceutical Innovation" by Sam Peltzman: https://www.amazon.com/Regulation-Pharmaceutical-Innovation-Amendments-Evaluative/dp/0844731285 https://www.amazon.com/Regulation-Pharmaceutical-Innovation-...
- rcbdev 3y ago
  Yeah - Europe is basically hell if you have health problems and in the US you get great, affordable and immediate treatment... Having lived and had health issues in both, I can 100% guarantee that health care in Western Europe is much better than in the US for the average citizen. This is a fact.
  - WalterBright 3y ago
    The US system is well over 50% run by the government. Obamacare drove my insurance provider out of the state, and I'm stuck with the only one left. Thanks, Obama! Before 1960 or so, the US health care business was free market and reasonably inexpensive. All government attempts to reduce health care costs cost cost increases.
  - nickpp 3y ago
    I live in Europe. Just not in the nice, posh Western side that benefitted from all those cheap but well trained doctors and nurses who emigrated after their country got accepted in the EU. Here in the East we thank God for private health care since the socialized state-run one IS basically hell as it kills people routinely.
    - 3y ago
akira2501 3y ago
For a market that's so large, there are very few players involved. More than likely several illegal monopolies have formed. We already have laws that are meant to address this issue. We should probably just enforce those.

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...
turtlesdown11 3y ago
you're not aware that government and universities provide half the funding of basic research in the united states?
AlbertCory 3y ago
As usual, the biggest factor is ignored: Risk Who takes the risk of exploring a drug candidate that literally no one can predict will succeed or fail? Let's imagine the Secretary of Drug Development testifying before Congress on why so many of his drugs didn't work. His best strategy is to only pursue safe bets.

johnorourke 3y ago

Like a kind of Service, for Health, covering the whole Nation... a National Health Service, perhaps! Sorry, brit here, couldn't resist. It's really interesting seeing (in my unscientific view) America slowly realising it needs to reform profit-driven health, while England's government slowly privatises its existing "free at poinnt of use" service and makes it harder for poorer people to access good health care.

eganist 3y ago
https://en.wikipedia.org/wiki/Public_health_insurance_option https://en.wikipedia.org/wiki/Public_health_insurance_option for those missing the connection. NHS comes across to me as government funded healthcare rather than a gov-kickstarted not-for-profit insurance option. Am I missing a nuance? Not familiar with NHS so I could have a wildly wrong impression of what it is.
gustavus 3y ago
Healthcare and medication are different things and as long as we continue to conflate the 2 everyone will be talking past each other.

rqtwteye 3y ago

A good start would be if the medical industry in the US were run like normal businesses with transparent and consistent pricing. Right now nobody can predict how much something cost because insurances, hospitals, drug companies and a lot of middlemen play all kinds of games. I think we should mandate that all prices are open so people know what's actually going on. Hospitals should also charge the same price for the same procedure to everybody independently of insurance or day of the week or whatever factor makes a procedure cost $5000 sometimes and $50000 another time. All the excuses like "we need to charge more to insured people because of uninsured people" or "we need to charge 10x as much in the US for drugs than in other countries because of R&D" should be viewed as self serving BS until all the numbers are transparent. If there is an imbalance we should do direct subsidies based on the actual numbers instead of the current mess. Health care is not regular business in the sense that you don't have to buy a product if it's too expensive and where it's easy to compare competing products. How would I know which hospital is better than another?

chiefalchemist 3y ago
Not only that, but insurance companies get to negotiate special rates, but as an individual you have zero opportunity to do so, zero leverage. That is, to your point, the price of the service is 100% flexible. The ambiguity and confusion benefits those who are best positioned to benefit from it, that's not the individual. It's a system optimized to be self-serving. It's the Healthcare Industrial Complex, that doesn't actually care much about health. Profits over people.
pfisherman 3y ago
Absolutely! The truth is that nobody really knows what medications actually cost. They are often sold in bundles similar to cable tv channels. For those who are running into coverage / affordability problems for drugs in the US… contact the manufacturer. They often have payment assistance programs or discounts to reduce out of pocket costs. They may be able to help you get costs covered by your insurer. You should not ever be paying the full “list price” out of pocket. Pharma companies want market share and they would rather sell to you at a discount than lose you as a customer.
3y ago

WalterBright 3y ago

I.e. you want the government to run industry. That never works well. > all audited by a dedicated regulatory body to ensure that comp and waste don't go into excess Since when has that ever worked for government run operations? > The hope would be that the industry doesn't actually profit off of human suffering I.e. industry works to alleviate suffering by providing the things that suffering people want. Their motivation is to make a profit. The profit tends to be far less than the waste from the inefficiency of government industry. BTW, the drug industry would serve us a lot better if they weren't strangled by FDA regulations and a screwed up patent system. See "Regulation of Pharmaceutical Innovation" by Sam Peltzman: https://www.amazon.com/Regulation-Pharmaceutical-Innovation-Amendments-Evaluative/dp/0844731285 https://www.amazon.com/Regulation-Pharmaceutical-Innovation-...

rcbdev 3y ago
Yeah - Europe is basically hell if you have health problems and in the US you get great, affordable and immediate treatment... Having lived and had health issues in both, I can 100% guarantee that health care in Western Europe is much better than in the US for the average citizen. This is a fact.
- WalterBright 3y ago
  The US system is well over 50% run by the government. Obamacare drove my insurance provider out of the state, and I'm stuck with the only one left. Thanks, Obama! Before 1960 or so, the US health care business was free market and reasonably inexpensive. All government attempts to reduce health care costs cost cost increases.
- nickpp 3y ago
  I live in Europe. Just not in the nice, posh Western side that benefitted from all those cheap but well trained doctors and nurses who emigrated after their country got accepted in the EU. Here in the East we thank God for private health care since the socialized state-run one IS basically hell as it kills people routinely.
  - 3y ago

akira2501 3y ago

For a market that's so large, there are very few players involved. More than likely several illegal monopolies have formed. We already have laws that are meant to address this issue. We should probably just enforce those.