3 ms·

Time and time again people are reminded that prices are not set based on some function of what it costs to produce the good or service, but by price discovery o

by mym1990 2y ago

Time and time again people are reminded that prices are not set based on some function of what it costs to produce the good or service, but by price discovery of the maximum amount a group of people would pay that would max out the profit. Obviously because medicine for certain diseases makes the goods and service price inelastic, depending on the disease, pricing can be set pretty high. Is it right? Nope. It is what makes the shareholders billions of dollars? Yep.

desert_rue 2y ago
Perhaps considering stakeholders might be a better, but harder to calculate, method. Systems don’t have to treat people for AIDs. People get less sick so they can work more and pay more taxes. Parents are around to raise their children, leading to better outcomes for everyone. Also, we can subsidize R&D (or subsidize it more). Focusing on profit only leads to human suffering.
milesskorpen 2y ago
Pharma companies also make and study dozens of drugs that don't make it. We need the successful drugs to fund the unsuccessful ones. Given that I believe there are still many more amazing drugs and medical interventions to be discovered, I don't think we should be reducing the profit to be earned in this space (because that's what induces people to continue to invest in research). When you look at cost per life saved, pharmaceuticals are a bargain compared to hospitals or other parts of our medical system (esp. in the US).
- plumeria 2y ago
  Would a NASA-like agency that funds vaccine research but keeps the IP “open source” work as an alternative to regular pharma companies?
  - untaintedminty 2y ago
    NASA gets funded because it provides access to space, which is strategic concern. Open-source medical IP is not, so I guess - no.
    - whatshisface 2y ago
      The air force has its own access to space. NASA gets funded because it is popular and the United States is a democracy.
      - untaintedminty 2y ago
        Fair point on air force providing strategic access to space. As for democracy, heh, let's say it's open to interpretation ;).
    - TaylorAlexander 2y ago
      Seems like eradicating disease and illness worldwide is a pretty strategic concern for humanity. I guess it’s like climate change. We can’t beat our neighbors by solving it so who cares, but these feel like things our species is really gonna have to start solving. But maybe we won’t and we will just make life unnecessarily hard for most human beings, when we could be stopping climate change and eradicating AIDS.
      - untaintedminty 2y ago
        As a human being, I totally get you. We should be doing much better than this. But, realistically, governments are responsible to their electorates only. As for the global humanity, first question is who's going to foot the bill and imagine global powers today coming to a consensus on that?!
  - milesskorpen 2y ago
    We could do that. But generally businesses are better at allocating capital than government, and less and less research is funded by government these days so I don't think the government has a strong track record.
safety1st 2y ago
To that point, there's no way this drug is going to cost $40,000 in Uganda, because the Ugandan market will not bear that price. Usually the way it works is there is some wildly high sticker price for individual Americans, which is what that $40K probably is here, and almost everyone pays less than that. E.g. American insurance companies pay something that's still very high but lower than that. Europeans pay something lower than the American insurance companies. And lower income countries get the cheapest price of all. The article does refer to this btw, Gilead is already talking about some voluntary licensing program that'll be available so somebody can manufacture cheap generics in countries like Uganda. This is quite common with this sort of drug but people generally don't read past the headline. What's going on is simply that the pharmas have American regulators in their pockets so they can charge anything they want in the US.
deleted 2y ago
[deleted]
strongpigeon 2y ago
To be specific, that’s only true in the case of a monopoly (which patents are meant to grant). Competition is the means by which products get priced closer to their production cost.
- Jensson 2y ago
  This is a government enforced monopoly, so no there wont be any competition for a years.
- mym1990 2y ago
  I would not say that this only applies to monopolies. You could add in companies that have strong moats, companies and industries that are able to collude(real estate brokers). Essentially there is more room for profit as competition decreases, but it is a sliding scale and not only monopolies apply. Even in spaces where there is lots of competition, it takes time for companies to reduce prices closer to production costs, aka a race to the bottom.

desert_rue 2y ago

Perhaps considering stakeholders might be a better, but harder to calculate, method. Systems don’t have to treat people for AIDs. People get less sick so they can work more and pay more taxes. Parents are around to raise their children, leading to better outcomes for everyone. Also, we can subsidize R&D (or subsidize it more). Focusing on profit only leads to human suffering.

milesskorpen 2y ago

Pharma companies also make and study dozens of drugs that don't make it. We need the successful drugs to fund the unsuccessful ones. Given that I believe there are still many more amazing drugs and medical interventions to be discovered, I don't think we should be reducing the profit to be earned in this space (because that's what induces people to continue to invest in research). When you look at cost per life saved, pharmaceuticals are a bargain compared to hospitals or other parts of our medical system (esp. in the US).

plumeria 2y ago
Would a NASA-like agency that funds vaccine research but keeps the IP “open source” work as an alternative to regular pharma companies?
- untaintedminty 2y ago
  NASA gets funded because it provides access to space, which is strategic concern. Open-source medical IP is not, so I guess - no.
  - whatshisface 2y ago
    The air force has its own access to space. NASA gets funded because it is popular and the United States is a democracy.
    - untaintedminty 2y ago
      Fair point on air force providing strategic access to space. As for democracy, heh, let's say it's open to interpretation ;).
  - TaylorAlexander 2y ago
    Seems like eradicating disease and illness worldwide is a pretty strategic concern for humanity. I guess it’s like climate change. We can’t beat our neighbors by solving it so who cares, but these feel like things our species is really gonna have to start solving. But maybe we won’t and we will just make life unnecessarily hard for most human beings, when we could be stopping climate change and eradicating AIDS.
    - untaintedminty 2y ago
      As a human being, I totally get you. We should be doing much better than this. But, realistically, governments are responsible to their electorates only. As for the global humanity, first question is who's going to foot the bill and imagine global powers today coming to a consensus on that?!
- milesskorpen 2y ago
  We could do that. But generally businesses are better at allocating capital than government, and less and less research is funded by government these days so I don't think the government has a strong track record.

safety1st 2y ago

To that point, there's no way this drug is going to cost $40,000 in Uganda, because the Ugandan market will not bear that price. Usually the way it works is there is some wildly high sticker price for individual Americans, which is what that $40K probably is here, and almost everyone pays less than that. E.g. American insurance companies pay something that's still very high but lower than that. Europeans pay something lower than the American insurance companies. And lower income countries get the cheapest price of all. The article does refer to this btw, Gilead is already talking about some voluntary licensing program that'll be available so somebody can manufacture cheap generics in countries like Uganda. This is quite common with this sort of drug but people generally don't read past the headline. What's going on is simply that the pharmas have American regulators in their pockets so they can charge anything they want in the US.

deleted 2y ago

[deleted]

strongpigeon 2y ago

To be specific, that’s only true in the case of a monopoly (which patents are meant to grant). Competition is the means by which products get priced closer to their production cost.

Jensson 2y ago
This is a government enforced monopoly, so no there wont be any competition for a years.
mym1990 2y ago
I would not say that this only applies to monopolies. You could add in companies that have strong moats, companies and industries that are able to collude(real estate brokers). Essentially there is more room for profit as competition decreases, but it is a sliding scale and not only monopolies apply. Even in spaces where there is lots of competition, it takes time for companies to reduce prices closer to production costs, aka a race to the bottom.