5 ms·

Well, there's also the rate of new drug and procedure discovery. I've heard it quipped that Americans are subsidizing the discovery of new medical techniques fo

Well, there's also the rate of new drug and procedure discovery. I've heard it quipped that Americans are subsidizing the discovery of new medical techniques for the rest of the world. Whether that's worth a higher cost is arguable but I think the effect is there.

bozhark 2y ago
Exactly this, example: biologics. I am currently prescribed a medication that is over $30,000 per injection every 12 weeks. Because we have absolutely atrocious health organization. Pharmaceutical companies can set their prices regardless of anything but their profit.
- nradov 2y ago
  How should pharmaceutical prices be set?
  - BobaFloutist 2y ago
    In general, anything that's mandatory for life/basic quality of life but still needs to be produced by industry should should be regulated to artificially reduce prices in order to compensate for inelastic demand and prevent price gouging. This regulation should include supply-side subsidies and dynamic, carefully considered price controls. This should apply to food, water, housing, health care, transportation, internet; all those good things that you can't do without and are extremely vulnerable to market manipulation.
    - claytongulick 2y ago
      It's worth researching the inevitable consequences of price controls, it's a predictable outcome that's been tested many times. Price controls are Hobson's choice: Would you prefer expensive bread, or no bread?
      - ElevenLathe 2y ago
        That's right, which is why basic healthcare (including production of normal, well-characterized, non-experimental drugs) should be taken out of the price system altogether and run directly by the government.
        AnthonyMouse 2y ago
        Normal off-patent drugs are already pretty cheap. You can get a bottle of ibuprofen for like $5. Drugs still under patent are, of course, expensive on purpose.
      - BobaFloutist 2y ago
        By price controls I literally just mean "anti-gouging regulation", not "you can't charge more than exactly $5 for x"
        AnthonyMouse 2y ago
        Describe the operation of "anti-gouging regulation" that isn't just a price ceiling or a cap on how much the price can increase in response to a sudden supply constraint that would otherwise result in a shortage.
        AlexandrB 2y ago
        Using the free market to respond to a shortage requires competition. Patents can make this impossible. When you have a fixed supply of something and no other entity can produce it having an uncapped price doesn't really help the market respond. Consider the example of a Taylor Swift concert. Are scalpers creating more supply by raising the prices of tickets or is it pure rent seeking? And, to many, the difference between "expensive bread" and "no bread" in the case of drugs is entirely academic.
        AnthonyMouse 2y ago
        Products under patent would already be charging the monopoly price regardless of a shortage. That's what a patent is supposed to do -- cause prices for new drugs to be temporarily high to provide the incentive to develop new drugs. The limit for this is how much better the new thing is than the old thing, such that if you charge more than that people switch back to the old thing. This obviously kind of sucks when the drug is the difference between life and death, but those are also the drugs we most want a large incentive to develop, and that's why the patents eventually expire. > Consider the example of a Taylor Swift concert. Are scalpers creating more supply by raising the prices of tickets or is it pure rent seeking? Scalpers are trading time for money. You want tickets that would otherwise sell out but you don't want to wait in line, so you pay someone to wait in line for you. It causes tickets to be available at the higher price instead of being sold out and unavailable at any price. The way to prevent the rent seeking is to auction off the tickets to begin with so the money goes to the artist instead of the scalpers.
    - Ray20 2y ago
      First, define the "basic quality of life" and what are you going to do when demand will exceed supply. Because we might as well just start the money printing machine and expect everyone to become a billionere.
      - BobaFloutist 2y ago
        Off the top of my head I'd include the following in basic quality of life (but not fundamental ability to live) these days: * A little extra space in your dwelling * Internet * Access to nature * Hot water * Some means of transportation that grants you access to work, home, and recreation * Leisure time beyond that needed to cook, clean, sleep, and exercise * Some dietary variety * Any functioning smartphone * Access to community * A modest amount of extra money for recreation * Any vacation time * Access to heat/cooling beyond the bare minimum * Access to education * More than one choice in a job * A bed that doesn't hurt you The list could likely be trimmed or made narrower, and there are likely things I'm not thinking of, but you get the idea. Nothing extravegent or necessarily expensive, just a few things beyond the absolute bare minimum a human needs to survive. Basically, I think everyone should have access to three major things: 1. The necessities of survival 2. A few extras to allow the unmotivated and unambitious to be sustainably content and not truly miserable from true deprivation (so, like, evaluate human needs the way a modern ethical zoo evaluates animal needs rather than a historical abusive menagerie would). 3. Access to tools and resources for the sufficiently ambitious to reasonably improve their situation without making excessive sacrifices from point 1 or 2. Does any of that strike you as unreasonable or unachievable?
  - jltsiren 2y ago
    One model is that a government pays a license fee that allows them to produce the drug in unlimited quantities for their country. (In practice, they could buy the drug from the manufacturer at the marginal cost, or they could use another pharmaceutical company as a subcontractor.) Sometimes there is a deal, and the country may get orders of magnitude higher health benefits for a marginally higher price. And sometimes the company refuses, because the deal would interfere with their business model in other countries.
    - AnthonyMouse 2y ago
      > One model is that a government pays a license fee that allows them to produce the drug in unlimited quantities for their country. How does this determine how much the license fee should be?
      - jltsiren 2y ago
        The same way as in any other business contract. How much the government is willing to pay, how much they expect to benefit, what other uses they have for the money, and so on. In practice, the company will likely get a bit more profit from the license fee than it would get from selling the drug normally.
        AnthonyMouse 2y ago
        The government is effectively a monopsony in that context, so that isn't a real way to calculate anything, it's just the government making up a number which is likely to be too low (suppressing R&D) or too high (inflating costs). You could potentially fix the first one by giving the company the option to decline and instead sell the drug under the existing system, but how do you fix the second one?
vundercind 2y ago
When this gets brought up as a positive to our high healthcare spending (which you're not exactly doing, more just making note of the existence of the argument) it's such a head-scratcher for me. 1) OK... maybe we should stop, then? Like, that seems like a terrible deal? How is that a justification at all? It seems like just a description of something very stupid we're doing. 2) This would be a good deal if we were getting other countries to also pay high prices and bringing that money "home", but basically the exact opposite is happening. WTF. 3) More often than not, the side of the issue that raises this as a good thing is also the side full of folks who think we should e.g. reduce spending on foreign aid, so it's especially weird that they're bringing it up. Plus, I'm very skeptical that the idea that drug development would dramatically slow down if the US stopped over-spending to the tune of 2x-100x on lots of drugs is even true. But setting that aside, it's still just a bizarre line of argument, to me.
- AStonesThrow 2y ago
  You see, development of new drugs, devices, and treatments is definitely something that we must continue at breakneck pace, by any means necessary, because people keep discovering how awful and harmful the existing ones are, so we need to make consistent progress beyond the status quo. If you move faster than the science and the lawsuits, then you can keep selling deadly crap to a naïve and trusting populace. https://en.wikipedia.org/wiki/Reye_syndrome https://en.wikipedia.org/wiki/Reye_syndrome https://en.wikipedia.org/wiki/Thalidomide https://en.wikipedia.org/wiki/Thalidomide https://en.wikipedia.org/wiki/Tardive_dyskinesia https://en.wikipedia.org/wiki/Tardive_dyskinesia https://en.m.wikipedia.org/wiki/Fenfluramine/phentermine https://en.m.wikipedia.org/wiki/Fenfluramine/phentermine
- AnthonyMouse 2y ago
  > OK... maybe we should stop, then? Like, that seems like a terrible deal? How is that a justification at all? It seems like just a description of something very stupid we're doing. The US pays for drug development and then the rest of the world caps prices and gets the drugs cheaper. If the US stops then the money for drug development goes down, which is not great. What you really want is to get the other countries to pay their share, but how do you propose to do that?
BurningFrog 2y ago
Yeah, it's unfortunate for the US, but since no one else is stepping up to pay for the medical research that benefits all of humanity, we have to do it. The recent "negotiated prices" for Medicare drugs could be the beginning of the end for this system though.
saulrh 2y ago
Wouldn't it be even better to explicitly funnel our money to R&D, rather than hoping that it gets there eventually after insurers and paperwork maximizers and intentionally-inefficient providers all take their cuts?
- basementcat 2y ago
  Which researchers do you funnel money to? The majority of basic research is done in academic research laboratories which are predominantly funded by government research grants. If one of these studies pans out and something can be patented, a business or investor group may license the patent and fund an applied R&D program with the goal of getting through FDA trials. This effort is either funded by investor capital or internal company funds (likely from revenues from the sales of FDA approved medications or other products). Presumably if a business or investor group has a track record of bringing treatments to market (e.g. having a revenue stream from a previously economically successful product) they are entitled with the option to invest more funds, etc.
doctorpangloss 2y ago
High interest rates have stopped way more drug development than lower or higher drug prices ever have. Between 2019 and 2022 there were like 88 biotech IPO lockup expirations and only 3 were trading higher than post lockup for any period of time. Macro determines the rate of risk taking. Not “details.” You simply 100% cannot have drug discovery without risk, and risk wants returns. Should we have low rates and high inflation for the sake of more “discovery of medical techniques?” Inflation and high costs: dude, they are exactly the same thing!
KingOfCoders 2y ago
"I've heard it quipped that Americans are subsidizing the discovery of new medical techniques for the rest of the world." The way Trump touted an invention from the German company BioNTech as "Invented in America".
- inglor_cz 2y ago
  To be fair, very critical elements of mRNA technology were developed in the U.S. Nothing is purely German or American nowadays.
  - KingOfCoders 2y ago
    To be fair, writing a paper is not developing a technology. And someone from the town I live discovered oxygen. No oxygen, no mRNA. "Nothing is purely German or American nowadays." I know that, not everyone seems to though: "I've heard it quipped that Americans are subsidizing the discovery of new medical techniques for the rest of the world." And not even nowadays. Like with the Wright Brothers, who used data from Otto Lilienthal. But the Wikipedia article could not stop trying to minimize his impact, "Lilienthal's research was well known to the Wright brothers, and they credited him as a major inspiration for their decision to pursue manned flight." where someone felt the need to add "They abandoned his aeronautical data after two seasons of gliding and began using their own wind tunnel data." and make it all about the Wright Brothers. In an article about "Otto Lilienthal" not the Wright Brothers.
    - inglor_cz 2y ago
      Going far enough, we should credit some anonymous Homo erectus for discovering fire... Not that I am completely joking, the tree of human knowledge is fascinating by its depth and goes deep into the pre-literate age. That said, I wouldn't dismiss Karikó's and Weissman's discovery of replacement of uridine with pseudouridine as merely "writing a paper". It was a pretty crucial technological stepping stone that made mRNA treatment orders of magnitude less dangerous to humans. Same with their discovery of the way how to deliver mRNA into cells (using lipid nanoparticles).

bozhark 2y ago

Exactly this, example: biologics. I am currently prescribed a medication that is over $30,000 per injection every 12 weeks. Because we have absolutely atrocious health organization. Pharmaceutical companies can set their prices regardless of anything but their profit.

nradov 2y ago
How should pharmaceutical prices be set?
- BobaFloutist 2y ago
  In general, anything that's mandatory for life/basic quality of life but still needs to be produced by industry should should be regulated to artificially reduce prices in order to compensate for inelastic demand and prevent price gouging. This regulation should include supply-side subsidies and dynamic, carefully considered price controls. This should apply to food, water, housing, health care, transportation, internet; all those good things that you can't do without and are extremely vulnerable to market manipulation.
  - claytongulick 2y ago
    It's worth researching the inevitable consequences of price controls, it's a predictable outcome that's been tested many times. Price controls are Hobson's choice: Would you prefer expensive bread, or no bread?
    - ElevenLathe 2y ago
      That's right, which is why basic healthcare (including production of normal, well-characterized, non-experimental drugs) should be taken out of the price system altogether and run directly by the government.
      - AnthonyMouse 2y ago
        Normal off-patent drugs are already pretty cheap. You can get a bottle of ibuprofen for like $5. Drugs still under patent are, of course, expensive on purpose.
    - BobaFloutist 2y ago
      By price controls I literally just mean "anti-gouging regulation", not "you can't charge more than exactly $5 for x"
      - AnthonyMouse 2y ago
        Describe the operation of "anti-gouging regulation" that isn't just a price ceiling or a cap on how much the price can increase in response to a sudden supply constraint that would otherwise result in a shortage.
        AlexandrB 2y ago
        Using the free market to respond to a shortage requires competition. Patents can make this impossible. When you have a fixed supply of something and no other entity can produce it having an uncapped price doesn't really help the market respond. Consider the example of a Taylor Swift concert. Are scalpers creating more supply by raising the prices of tickets or is it pure rent seeking? And, to many, the difference between "expensive bread" and "no bread" in the case of drugs is entirely academic.
        AnthonyMouse 2y ago
        Products under patent would already be charging the monopoly price regardless of a shortage. That's what a patent is supposed to do -- cause prices for new drugs to be temporarily high to provide the incentive to develop new drugs. The limit for this is how much better the new thing is than the old thing, such that if you charge more than that people switch back to the old thing. This obviously kind of sucks when the drug is the difference between life and death, but those are also the drugs we most want a large incentive to develop, and that's why the patents eventually expire. > Consider the example of a Taylor Swift concert. Are scalpers creating more supply by raising the prices of tickets or is it pure rent seeking? Scalpers are trading time for money. You want tickets that would otherwise sell out but you don't want to wait in line, so you pay someone to wait in line for you. It causes tickets to be available at the higher price instead of being sold out and unavailable at any price. The way to prevent the rent seeking is to auction off the tickets to begin with so the money goes to the artist instead of the scalpers.
  - Ray20 2y ago
    First, define the "basic quality of life" and what are you going to do when demand will exceed supply. Because we might as well just start the money printing machine and expect everyone to become a billionere.
    - BobaFloutist 2y ago
      Off the top of my head I'd include the following in basic quality of life (but not fundamental ability to live) these days: * A little extra space in your dwelling * Internet * Access to nature * Hot water * Some means of transportation that grants you access to work, home, and recreation * Leisure time beyond that needed to cook, clean, sleep, and exercise * Some dietary variety * Any functioning smartphone * Access to community * A modest amount of extra money for recreation * Any vacation time * Access to heat/cooling beyond the bare minimum * Access to education * More than one choice in a job * A bed that doesn't hurt you The list could likely be trimmed or made narrower, and there are likely things I'm not thinking of, but you get the idea. Nothing extravegent or necessarily expensive, just a few things beyond the absolute bare minimum a human needs to survive. Basically, I think everyone should have access to three major things: 1. The necessities of survival 2. A few extras to allow the unmotivated and unambitious to be sustainably content and not truly miserable from true deprivation (so, like, evaluate human needs the way a modern ethical zoo evaluates animal needs rather than a historical abusive menagerie would). 3. Access to tools and resources for the sufficiently ambitious to reasonably improve their situation without making excessive sacrifices from point 1 or 2. Does any of that strike you as unreasonable or unachievable?
- jltsiren 2y ago
  One model is that a government pays a license fee that allows them to produce the drug in unlimited quantities for their country. (In practice, they could buy the drug from the manufacturer at the marginal cost, or they could use another pharmaceutical company as a subcontractor.) Sometimes there is a deal, and the country may get orders of magnitude higher health benefits for a marginally higher price. And sometimes the company refuses, because the deal would interfere with their business model in other countries.
  - AnthonyMouse 2y ago
    > One model is that a government pays a license fee that allows them to produce the drug in unlimited quantities for their country. How does this determine how much the license fee should be?
    - jltsiren 2y ago
      The same way as in any other business contract. How much the government is willing to pay, how much they expect to benefit, what other uses they have for the money, and so on. In practice, the company will likely get a bit more profit from the license fee than it would get from selling the drug normally.
      - AnthonyMouse 2y ago
        The government is effectively a monopsony in that context, so that isn't a real way to calculate anything, it's just the government making up a number which is likely to be too low (suppressing R&D) or too high (inflating costs). You could potentially fix the first one by giving the company the option to decline and instead sell the drug under the existing system, but how do you fix the second one?

vundercind 2y ago

When this gets brought up as a positive to our high healthcare spending (which you're not exactly doing, more just making note of the existence of the argument) it's such a head-scratcher for me. 1) OK... maybe we should stop, then? Like, that seems like a terrible deal? How is that a justification at all? It seems like just a description of something very stupid we're doing. 2) This would be a good deal if we were getting other countries to also pay high prices and bringing that money "home", but basically the exact opposite is happening. WTF. 3) More often than not, the side of the issue that raises this as a good thing is also the side full of folks who think we should e.g. reduce spending on foreign aid, so it's especially weird that they're bringing it up. Plus, I'm very skeptical that the idea that drug development would dramatically slow down if the US stopped over-spending to the tune of 2x-100x on lots of drugs is even true. But setting that aside, it's still just a bizarre line of argument, to me.

AStonesThrow 2y ago
You see, development of new drugs, devices, and treatments is definitely something that we must continue at breakneck pace, by any means necessary, because people keep discovering how awful and harmful the existing ones are, so we need to make consistent progress beyond the status quo. If you move faster than the science and the lawsuits, then you can keep selling deadly crap to a naïve and trusting populace. https://en.wikipedia.org/wiki/Reye_syndrome https://en.wikipedia.org/wiki/Reye_syndrome https://en.wikipedia.org/wiki/Thalidomide https://en.wikipedia.org/wiki/Thalidomide https://en.wikipedia.org/wiki/Tardive_dyskinesia https://en.wikipedia.org/wiki/Tardive_dyskinesia https://en.m.wikipedia.org/wiki/Fenfluramine/phentermine https://en.m.wikipedia.org/wiki/Fenfluramine/phentermine
AnthonyMouse 2y ago
> OK... maybe we should stop, then? Like, that seems like a terrible deal? How is that a justification at all? It seems like just a description of something very stupid we're doing. The US pays for drug development and then the rest of the world caps prices and gets the drugs cheaper. If the US stops then the money for drug development goes down, which is not great. What you really want is to get the other countries to pay their share, but how do you propose to do that?

BurningFrog 2y ago

Yeah, it's unfortunate for the US, but since no one else is stepping up to pay for the medical research that benefits all of humanity, we have to do it. The recent "negotiated prices" for Medicare drugs could be the beginning of the end for this system though.

saulrh 2y ago

Wouldn't it be even better to explicitly funnel our money to R&D, rather than hoping that it gets there eventually after insurers and paperwork maximizers and intentionally-inefficient providers all take their cuts?

basementcat 2y ago
Which researchers do you funnel money to? The majority of basic research is done in academic research laboratories which are predominantly funded by government research grants. If one of these studies pans out and something can be patented, a business or investor group may license the patent and fund an applied R&D program with the goal of getting through FDA trials. This effort is either funded by investor capital or internal company funds (likely from revenues from the sales of FDA approved medications or other products). Presumably if a business or investor group has a track record of bringing treatments to market (e.g. having a revenue stream from a previously economically successful product) they are entitled with the option to invest more funds, etc.

doctorpangloss 2y ago

High interest rates have stopped way more drug development than lower or higher drug prices ever have. Between 2019 and 2022 there were like 88 biotech IPO lockup expirations and only 3 were trading higher than post lockup for any period of time. Macro determines the rate of risk taking. Not “details.” You simply 100% cannot have drug discovery without risk, and risk wants returns. Should we have low rates and high inflation for the sake of more “discovery of medical techniques?” Inflation and high costs: dude, they are exactly the same thing!

KingOfCoders 2y ago

"I've heard it quipped that Americans are subsidizing the discovery of new medical techniques for the rest of the world." The way Trump touted an invention from the German company BioNTech as "Invented in America".

inglor_cz 2y ago
To be fair, very critical elements of mRNA technology were developed in the U.S. Nothing is purely German or American nowadays.
- KingOfCoders 2y ago
  To be fair, writing a paper is not developing a technology. And someone from the town I live discovered oxygen. No oxygen, no mRNA. "Nothing is purely German or American nowadays." I know that, not everyone seems to though: "I've heard it quipped that Americans are subsidizing the discovery of new medical techniques for the rest of the world." And not even nowadays. Like with the Wright Brothers, who used data from Otto Lilienthal. But the Wikipedia article could not stop trying to minimize his impact, "Lilienthal's research was well known to the Wright brothers, and they credited him as a major inspiration for their decision to pursue manned flight." where someone felt the need to add "They abandoned his aeronautical data after two seasons of gliding and began using their own wind tunnel data." and make it all about the Wright Brothers. In an article about "Otto Lilienthal" not the Wright Brothers.
  - inglor_cz 2y ago
    Going far enough, we should credit some anonymous Homo erectus for discovering fire... Not that I am completely joking, the tree of human knowledge is fascinating by its depth and goes deep into the pre-literate age. That said, I wouldn't dismiss Karikó's and Weissman's discovery of replacement of uridine with pseudouridine as merely "writing a paper". It was a pretty crucial technological stepping stone that made mRNA treatment orders of magnitude less dangerous to humans. Same with their discovery of the way how to deliver mRNA into cells (using lipid nanoparticles).