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Plenty of companies do stock buybacks without also engaging in predatory pricing that customers are powerless to fight. The situation is even more problematic w

Plenty of companies do stock buybacks without also engaging in predatory pricing that customers are powerless to fight. The situation is even more problematic when you consider the lack of alternatives, and the often live-preserving nature of the product. > Stock buybacks are a way of returning value to shareholders. This is also a problematic framing that ignores the broader situation. And that’s the tricky thing about framing things. It’s easy to manipulate the narrative and obscure the unreasonableness of the underlying reality if you sufficiently narrow the frame.

s1artibartfast 3y ago
I think this understates the power and options of the customers. The typical alternative to receive what was state of the art care 10 years prior and off patent, and now 5% the price. The unfortunate part is the desire for such products is so low, that most of the time they are discontinued. It is essentially a tragedy of the commons in the US. Because all the costs are shared, every individual is happy to pay 20X for a product that is 10% better.
refurb 3y ago
What is “predatory pricing”? It seems like “predatory” is just a word people attach to things they don’t like.
- Freestyler_3 3y ago
  Its making the price higher because you know people are dependent on your product, well beyond a reasonable profit. I think 10x the price in other countries hints a bit to predatory pricing.
  - refurb 3y ago
    What is a "reasonable" profit? 10%? 50%? 100%? What is a "reasonable" profit in an industry where it costs hundreds of millions to develop a product and 95% of the products fail?
- sofixa 3y ago
  When pricing a good with inelastic or not very elastic demand (like, say, healthcare or medical products), the threshold for predatory is very low because people can't just choose most of their healthcare needs or replace them with alternatives (arguably some parts can be vastly diminished with better lifestyle choices over the long term, but that's not solving the current and very inelastic demand). So, margins in the hundreds of percents is definitely predatory. I'd personally argue anything higher than 10-20% is morally bankrupt and I wouldn't be able to sleep at night if I were in the shoes of those responsible. If there is a hell, there's certainly a circle dedicated to people praying on the sick.
  - refurb 3y ago
    At 10-20% profit margin the pharmaceutical industry isn’t viable. The 1 winner in 10 needs to pay for the 9 losers. And of course there are alternatives. A brand new drug is replacing something older (even if just supportive care). Plenty of universal healthcare systems choose not to pay for new drugs because “they aren’t worth it”.
    - sofixa 3y ago
      > At 10-20% profit margin the pharmaceutical industry isn’t viable. The 1 winner in 10 needs to pay for the 9 losers 10-20% all included, of course, including R&D costs on failure. > Plenty of universal healthcare systems choose not to pay for new drugs because “they aren’t worth it”. Source?
      - twoodfin 3y ago
        Spinraza—an incredibly expensive treatment for a deadly genetic condition in infants—was available to US patients for two and a half years before it was available to treat infants in the English NHS: https://www.reuters.com/article/idUSKCN1SK2QM/ https://www.reuters.com/article/idUSKCN1SK2QM/ Many such cases!
        sofixa 3y ago

s1artibartfast 3y ago

I think this understates the power and options of the customers. The typical alternative to receive what was state of the art care 10 years prior and off patent, and now 5% the price. The unfortunate part is the desire for such products is so low, that most of the time they are discontinued. It is essentially a tragedy of the commons in the US. Because all the costs are shared, every individual is happy to pay 20X for a product that is 10% better.

refurb 3y ago

What is “predatory pricing”? It seems like “predatory” is just a word people attach to things they don’t like.

Freestyler_3 3y ago
Its making the price higher because you know people are dependent on your product, well beyond a reasonable profit. I think 10x the price in other countries hints a bit to predatory pricing.
- refurb 3y ago
  What is a "reasonable" profit? 10%? 50%? 100%? What is a "reasonable" profit in an industry where it costs hundreds of millions to develop a product and 95% of the products fail?
sofixa 3y ago
When pricing a good with inelastic or not very elastic demand (like, say, healthcare or medical products), the threshold for predatory is very low because people can't just choose most of their healthcare needs or replace them with alternatives (arguably some parts can be vastly diminished with better lifestyle choices over the long term, but that's not solving the current and very inelastic demand). So, margins in the hundreds of percents is definitely predatory. I'd personally argue anything higher than 10-20% is morally bankrupt and I wouldn't be able to sleep at night if I were in the shoes of those responsible. If there is a hell, there's certainly a circle dedicated to people praying on the sick.
- refurb 3y ago
  At 10-20% profit margin the pharmaceutical industry isn’t viable. The 1 winner in 10 needs to pay for the 9 losers. And of course there are alternatives. A brand new drug is replacing something older (even if just supportive care). Plenty of universal healthcare systems choose not to pay for new drugs because “they aren’t worth it”.
  - sofixa 3y ago
    > At 10-20% profit margin the pharmaceutical industry isn’t viable. The 1 winner in 10 needs to pay for the 9 losers 10-20% all included, of course, including R&D costs on failure. > Plenty of universal healthcare systems choose not to pay for new drugs because “they aren’t worth it”. Source?
    - twoodfin 3y ago
      Spinraza—an incredibly expensive treatment for a deadly genetic condition in infants—was available to US patients for two and a half years before it was available to treat infants in the English NHS: https://www.reuters.com/article/idUSKCN1SK2QM/ https://www.reuters.com/article/idUSKCN1SK2QM/ Many such cases!
      - sofixa 3y ago