5 ms·
It seems like we want for-profit pharmaceutical corporations to act like non-profit institutions. Any idea why non-profit institutions haven't risen in the worl
by jimmar 3y ago
It seems like we want for-profit pharmaceutical corporations to act like non-profit institutions. Any idea why non-profit institutions haven't risen in the world of pharmaceuticals?
- santoshalper 3y agoOr, we want for-profit pharmaceutical corporations to not take taxpayer dollars. You shouldn't be able to have it both ways, but at least in the US, you can.
- s1artibartfast 3y agoI hear this a lot, and I think that there is a fundamental misunderstanding of what's going on. People aren't upset by for-profit grocery stores taking tax dollars in the form of food stamps. They aren't upset by taxpayers giving money to for-profit hospitals to treat poor patients. The government is paying a For profit company to do something that the government wants. If the company would do it anyways, then of course I agree that the government shouldn't pay for it.
- tfourb 3y agoI think the difference is the extend of the profit. Big Pharma is incredibly profitable, while grocery stores are operating on very thin margins. Few people have a problem with a company doing business based on government expenditure, but specializing in maximizing profit from this reeks of profiteering.
- ejb999 3y agoJust as a point of reference, if you bought 100K in Pfizer stock 25 years ago, it would now be worth about 100K. Adjusted for inflation, you would have lost about 50% of it’s value. Not what I would call ‘incredibly profitable’. And they are one of the biggest.
- timthorn 3y agoDoes that include the value of dividends paid over the period?
- ejb999 3y agowith dividends, you might just about broke even on your 25 year investment. If the goal is to go after 'extremely profitable' companies, maybe we should be looking at tech companies, that are in fact, 'extremely profitable', unlike most pharma companies. and for the record, I have zero love for pharma companies, or how they operate - but they are not - in general - 'extremely profitable' companies. Far from it.
- mlrtime 3y agoI agree with your position. There is a trend on HN and other platforms that anything with a profit motive is bad. Capitalism is bad, profits are bad... Yet it is all complaining on the problems without a actual real solution. I thought HN was better, focus on the actual problems and not let every discussion turn into a profit/capitalism = bad debate.
- tfourb 3y agoThe "actual real solution" with the regard to the topic in this thread is demonstrated well by a number of countries around the globe: force everyone in a country to be part of a public health insurance system, financed mostly by deductions on income and tightly regulate price setting for drugs and medical services administered under that system. If that sounds too much like socialism for your taste, give rich people the option to buy additional services or restrict the public system to basic medical services and drugs and require private insurance on top for cutting-edge stuff. Profit is a great thing, but it is not an end to itself. The point of liberal democratic societies is to guarantee basic rights for everyone, while constantly improving the welfare (which is not the same as wealth) of as many people as possible. Capitalism has made great contributions towards that goal, but it also contradicts it in several critical places and thus needs to be regulated where necessary.
- Beldin 3y ago> People aren't upset by for-profit grocery stores taking tax dollars in the form of food stamps. They might feel different if foodstamp-bought food was 10x as expensive as regular food, and those with foodstamps were forbidden from buying food for non-foodstamp prices.
- briffle 3y agoI don’t like the percentage profit they take in the US, they can sell a drug outside the US for $50, but charge $300 here. Either we are subsidizing other countries, or they are fleecing us for what they can get, often on the back of research funded by tax dollars.
- tfourb 3y agoThe latter, as these companies were perfectly profitable even if they wouldn't charge inflated prices in the US. Not quite as profitable as currently, but still not going bankrupt.
- HDThoreaun 3y agoThey would absolutely stop doing clinical trials if they couldnt charge US prices. Sure theyd still be profitable, but we'd never get any new drugs since they cost a billion dollars to prove efficacy and safety.
- tfourb 3y agoLet's do some basic back-of-the-napkin math: Say the development of a drug costs $1 Billion on average and that only every tenth drug gets approval. So you are looking at a $10 Billion cost for every successful drug development. But you can then sell this drug exclusively under current patent laws for about 20 years, worldwide. By that calculation, you'd need to sell 1.000.000 doses of the drug for a price of $500 each every year to break even. That sounds trivial to achieve given that there are 7 billion people alive and innovative drugs will go for vastly more than that even in strictly regulated markets like many European countries (my son gets a pretty advanced drug that costs about $12.000 (EDIT: yearly) to procure but which is covered by our (national) insurance scheme). Additionally, a lot of the cost of basic drug research is actually covered by government-financed research, not private investment. If you are still worried, you could use a prize model, similar to what was done during covid: Identify certain qualities that a new drug should have (i.e. be an effective vaccine against malaria) and guarantee a big enough market (i.e. promise to buy at least 1 Billion doses at $10 each) and you can bet that there'll be plenty of companies trying to get at that money.
- tux3 3y agoIt takes very many million dollars to run a clinical trial, why the rhetorical question? It's just funding. Not like non-profits are magically unable to have talent, or to achieve results. No one's giving away billions on a pharma non-profit when they could invest. Even though the result is sometimes similar for the investor.
- jimmar 3y agoIt wasn't a rhetorical question. I could imagine an entity like the Gates Foundation proving seed funding to bootstrap a non-profit pharmaceutical company. That company could fund R&D through sales of its newly developed medicines. No shareholders. No stock buybacks. But somehow this doesn't seem to happen, at least not on a scale that reduces medical costs for consumers.
- throwaway14356 3y agoI use to believe that. I then discover some private groups of people sharing a disease doing all kinds of trials. Nothing was to absurd. Almost brute forcing the problem. I thought a wiki written by mostly dead people was quite humbling. There has to be some middle ground between the 2 branches of insanity?
- tomohelix 3y ago> It's just funding. And to have funding, you have to attract investors. How to attract investors? By making it quite profitable to invest in the company, i.e. making it profitable for the shareholders. With enough money, you can do anything big pharma is doing. But how to get that money consistently is another question that have an uncomfortable answer. Plenty of startup and small biotech companies go bankrupt every year. This isn't something you can do in a garage and turn it into a multibillion dollar business like software. Biopharma has too many regulations and rules to follow and it makes the entire field incredibly risky and less likely for a small and unattractive player to succeed, even if they are driven by passion.
- lm28469 3y agoIt's a spectrum, and the gap between non profit and this is quite wide
- chabes 3y agoFinancial incentives, obviously
- koenneker 3y agoThere are some examples of this like Novo Nordisk. They operate as a wholly owned subsidiary of a nonprofit foundation[1] whose purpose is to encourage medical research. [1]https://en.wikipedia.org/wiki/Novo_Nordisk_Foundation https://en.wikipedia.org/wiki/Novo_Nordisk_Foundation
- bart_spoon 3y agoNovo Nordisk is publicly traded and has received just as much flak as anyone for supposedly exorbitant pricing of its insulin as well as its block buster weight loss drugs Ozempic and Wegovy, which are poised to become among the most profitable drugs ever made. If that is what non-profits in Pharma are supposed to be, what is the difference with for profits?
- justaguyonline 3y agoThe broad frustration against pharmaceutical corporation isn't simply because they're for-profit. It's because they're not actually taking on the risky business development that profit seeking is supposed to be good at. If we can stop the free riding happening, for-profit pharmaceutical corporations would be just fine.