3 ms·

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

by refurb 3y ago

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
        There is a difference between something being available later (probably due to regulatory reasons, and with good reason, the FDA sucks at it's job - look at Oxycontin and sunscreens for two egregious examples on the two ends of the spectrum so of course other countries' regulators wouldn't just blindly trust them), and something not being available at all because it's too expensive as was the original claim. So again, sources for medical devices or medicine not available in single payer healthcare systems because they're too expensive, but available in the US via an insurance? To expand on this, the FAA also showed itself to be criminally incompetent to the point of sacrificing human lives in service of Boeing. European (and other countries if they wish to, but as a European they're the only ones I can directly advocate for) regulators should stop trusting American regulators, and only pay attention to them to get inspiration and see what to do/what not to do. European regulators are far from perfect, but they're doing a better job and more trustworthy than their underfunded, hated by 1/3 of the country, revolving door corrupt American counterparts.
        twoodfin 3y ago
        Spinraza was specifically not covered for years because the English NHS and Biogen could not reach financial terms based on the NHS’ assessment of the value of the drug over other treatments. Look, if you don’t want to engage with this specific example, there are many more. Cerdelga to treat Gaucher’s disease was approved by the EU in 2015, but the English NHS didn’t agree to pay for it for another two years: https://pharmatimes.com/news/nice_u-turn_backs_sanofis_gaucher_disease_drug_1194651/ https://pharmatimes.com/news/nice_u-turn_backs_sanofis_gauch... Canada as well, not approved for coverage until 2017: https://hpr-rps.hres.ca/reg-content/summary-basis-decision-detailTwo.php?linkID=SBD00359 https://hpr-rps.hres.ca/reg-content/summary-basis-decision-d...

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

by refurb 3y ago

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

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
      There is a difference between something being available later (probably due to regulatory reasons, and with good reason, the FDA sucks at it's job - look at Oxycontin and sunscreens for two egregious examples on the two ends of the spectrum so of course other countries' regulators wouldn't just blindly trust them), and something not being available at all because it's too expensive as was the original claim. So again, sources for medical devices or medicine not available in single payer healthcare systems because they're too expensive, but available in the US via an insurance? To expand on this, the FAA also showed itself to be criminally incompetent to the point of sacrificing human lives in service of Boeing. European (and other countries if they wish to, but as a European they're the only ones I can directly advocate for) regulators should stop trusting American regulators, and only pay attention to them to get inspiration and see what to do/what not to do. European regulators are far from perfect, but they're doing a better job and more trustworthy than their underfunded, hated by 1/3 of the country, revolving door corrupt American counterparts.
      - twoodfin 3y ago
        Spinraza was specifically not covered for years because the English NHS and Biogen could not reach financial terms based on the NHS’ assessment of the value of the drug over other treatments. Look, if you don’t want to engage with this specific example, there are many more. Cerdelga to treat Gaucher’s disease was approved by the EU in 2015, but the English NHS didn’t agree to pay for it for another two years: https://pharmatimes.com/news/nice_u-turn_backs_sanofis_gaucher_disease_drug_1194651/ https://pharmatimes.com/news/nice_u-turn_backs_sanofis_gauch... Canada as well, not approved for coverage until 2017: https://hpr-rps.hres.ca/reg-content/summary-basis-decision-detailTwo.php?linkID=SBD00359 https://hpr-rps.hres.ca/reg-content/summary-basis-decision-d...