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Businesses will do what is most profitable for them. If we want pharma companies to spend more on R&D, we either need to make R&D more lucrative (which would li

by lumb63 3y ago

Businesses will do what is most profitable for them. If we want pharma companies to spend more on R&D, we either need to make R&D more lucrative (which would likely require higher drug prices, higher approval rates from FDA, or higher consumption of drugs, all of which seem undesirable) or make “spending billions on executives and stockholders” less lucrative. The problem is the stock market has become Monopoly money as a result of a decade of ZIRP and the huge amount of excess liquidity in the system. Furthermore, stock buybacks are incredibly efficient from a tax standpoint. And IIRC, there are tax incentives to paying executives in copious sums of shares. We shouldn’t blame companies for doing what’s financially best for them; we should change the rules to align what’s best for them with what’s best for the rest of us.

klabb3 3y ago
> We shouldn’t blame companies for doing what’s financially best for them; we should change the rules to align what’s best for them with what’s best for the rest of us. Why not both? Corporations that size are actively working to change, skirt and fight the rules in their favor. This idea that the elected make the rules in a vacuum and companies are just following them isn’t true in reality. If we insist on having the market be responsible for drug development, it should work for us. We should be leveraging the benefits of market based capitalism in order to achieve a desirable outcome. Standing on the sidelines and hoping for side effects of profit-seeking to trickle down both dogmatic and defeatist. The best way to do markets is competition. And the best way to have competition is a lot of independent companies. A few mega-corps is more like institutions than markets. And the prices follow.
rabf 3y ago
The patent system is what promotes R&D. Once your patents expire anyone can manufacture your drug without ever having done any of the initial work. Drug companies have a pipeline of new drugs going through the decade of studies and trials it takes to bring them to the market and the ongoing survival of the company depends on some of these being a success. Would love to see some of the people here crying about obscene profits try their hand at investing in pharma companies. Its an easy way to lose a lot/all of your money. This podcast provides some interesting color on the industry: https://www.acquired.fm/episodes/novo-nordisk-ozempic https://www.acquired.fm/episodes/novo-nordisk-ozempic
- glp1guide 3y ago
  That podcast is epic, made a post about it on my site JUST to get more word on it out there. Acquired always does excellent write ups -- the competition between Novo and Lilly is also pretty interesting. > The patent system is what promotes R&D. Once your patents expire anyone can manufacture your drug without ever having done any of the initial work. Drug companies have a pipeline of new drugs going through the decade of studies and trials it takes to bring them to the market and the ongoing survival of the company depends on some of these being a success. This is our current system, but I'm not sure it's the only system. There could be a world where medicine moves forward without patents, but that might be a worse outcome for patients -- assuming we wanted to keep profits even across a patent & not patent system, patients or some other revenue stream would have to make up the shortfall. > Would love to see some of the people here crying about obscene profits try their hand at investing in pharma companies. Its an easy way to lose a lot/all of your money. Also, I think most reasonable people would not immediately take to investing in random pharma companies -- you'd do quite well to simply invest in the biggest companies, or an index. The charts for the index, novo and lilly are pretty decent.

by lumb63 3y ago

klabb3 3y ago

> We shouldn’t blame companies for doing what’s financially best for them; we should change the rules to align what’s best for them with what’s best for the rest of us. Why not both? Corporations that size are actively working to change, skirt and fight the rules in their favor. This idea that the elected make the rules in a vacuum and companies are just following them isn’t true in reality. If we insist on having the market be responsible for drug development, it should work for us. We should be leveraging the benefits of market based capitalism in order to achieve a desirable outcome. Standing on the sidelines and hoping for side effects of profit-seeking to trickle down both dogmatic and defeatist. The best way to do markets is competition. And the best way to have competition is a lot of independent companies. A few mega-corps is more like institutions than markets. And the prices follow.

rabf 3y ago

The patent system is what promotes R&D. Once your patents expire anyone can manufacture your drug without ever having done any of the initial work. Drug companies have a pipeline of new drugs going through the decade of studies and trials it takes to bring them to the market and the ongoing survival of the company depends on some of these being a success. Would love to see some of the people here crying about obscene profits try their hand at investing in pharma companies. Its an easy way to lose a lot/all of your money. This podcast provides some interesting color on the industry: https://www.acquired.fm/episodes/novo-nordisk-ozempic https://www.acquired.fm/episodes/novo-nordisk-ozempic

glp1guide 3y ago
That podcast is epic, made a post about it on my site JUST to get more word on it out there. Acquired always does excellent write ups -- the competition between Novo and Lilly is also pretty interesting. > The patent system is what promotes R&D. Once your patents expire anyone can manufacture your drug without ever having done any of the initial work. Drug companies have a pipeline of new drugs going through the decade of studies and trials it takes to bring them to the market and the ongoing survival of the company depends on some of these being a success. This is our current system, but I'm not sure it's the only system. There could be a world where medicine moves forward without patents, but that might be a worse outcome for patients -- assuming we wanted to keep profits even across a patent & not patent system, patients or some other revenue stream would have to make up the shortfall. > Would love to see some of the people here crying about obscene profits try their hand at investing in pharma companies. Its an easy way to lose a lot/all of your money. Also, I think most reasonable people would not immediately take to investing in random pharma companies -- you'd do quite well to simply invest in the biggest companies, or an index. The charts for the index, novo and lilly are pretty decent.