Government needs to subsidize research and put price caps on resulting drugs. Fair market isn't possible with inelastic demand. That's where the fuck you comes from.
Someone has cancer and their kids are wanting the treatment (of course, it's false hope, we don't want daddy to die) without realizing what they are asking for (lifelong debt). So in addition to cancer, the patient has to grapple with that shit. Anyone with a little financial sense would probably take death, but now they have to explain that to their families why they are denying the treatment (daddy doesn't want to be with us / daddy wants to die?).
Well governments do subsidise research quite a lot (NIH et al).
Putting caps on prices without doing something about research costs is just going to kill research. All the big pharma companies are laying off scientist every week because even with uncapped prices the returns are so low that it is not worth spending the money to develop new drugs.
A more productive approach might be to look into why drug development has become so expensive. It is certainly not because pharma companies have suddenly become greedier.
> Putting caps on prices without doing something about research costs is just going to kill research. All the big pharma companies are laying off scientist every week because even with uncapped prices the returns are so low that it is not worth spending the money to develop new drugs.
European countries pay much lower prices (although still relatively high vs. an average salary) vs. the US. The dirty secret is that the US is generally milked by pharma, because it can be. Until the US gets its act together and fixes this --and how likely is that, with the essentially broken system of government?-- it will continue.
> A more productive approach might be to look into why drug development has become so expensive. It is certainly not because pharma companies have suddenly become greedier.
It's expensive because a) it's a long and hard slog, and b) the regulators set very high standards. You can't affect a), and there is a strong disincentive for regulators to change b): in essence, regulators exist to prevent bad things happening, so are only incentivised to ever-tighten regulations.
To be fair, European big pharma also lives off the US market to plump their margins. That subsidizes their ability to charge lower prices in Europe and elsewhere. They also constantly poach cutting edge biotech & pharma companies out of the US to keep their stables full, such as AveXis, Genzyme, Genentech, etc. Without constantly buying up elite US biotech, Europe would have practically no biotech industry at all.
The US is by far the world's largest drug market. It's heaven for Sanofi, GlaxoSmithKline, Novartis, Roche, AstraZeneca, et al. The US drug market is twice the size of the EU drug market, with ~37% fewer people.
> To be fair, European big pharma also lives off the US market to plump their margins.
...as I said in my very next sentence? :)
> They also constantly poach cutting edge biotech & pharma companies out of the US to keep their stables full, such as AveXis, Genzyme, Genentech, etc. Without constantly buying up elite US biotech, Europe would have practically no biotech industry at all.
Can I ask, what's the problem with this?
All of the companies you refer to are pretty-much global - they have a presence in many countries, including the US, and by being publicly traded, ownership isn't especially linked to their country of origin. AZ (for example) being based in the UK means little for the UK, apart from that being where it pays some tax, and employs some people in its head office.
To take one of your examples, Roche (Swiss) bought Genentech (US), and still maintains the same huge presence in SF, still employs people in SF, still pays taxes there. And presumably the previous owners of Genentech stock did nicely out of this?
It is only a long hard slog because of the regulators.
You are 100% right that the problem all comes back to regulation. What is missing from the drug development area is any cost benefit analysis. Regulations are made as if there is no cost to the ever tightening and restrictive regulations.
>All the big pharma companies are laying off scientist every week because even with uncapped prices the returns are so low that it is not worth spending the money to develop new drugs.
You paint such a sad, desperate picture, but based on their numbers, it sounds like they are doing it to save a buck. Look at those profit margins. 10-43 percent on billions of investment. I should be so lucky.
Did you know the US government isn't allowed to negotiate drug prices for medicare and medicaid? They (we) just pay whatever the companies want to charge.
Yes they are making lots of money by killing their research pipeline and laying off their scientists. The reason they are doing this is they can't justify spending the money given the returns on offer.
I am no defender of pharma companies, but they are doing exactly what the economic incentives encourage them to do. We need to change the incentives, not just rant about high prices and greed.
Edit. Yes I know that the US government is not allowed to negotiate with drug companies over pricing (it is a little more complex than this in practice), but even with pricing uncapped the profit margins don't justify them spending more on R&D.
We agree on the problem, just disagree on the solution. You should also read the part two of the article you quoted [0]. Unfortunately all the solutions provided are little more than a sugar pill for the real problem - R&D costs.
Medicare drug prices are negotiated by the private companies that administer most of the drug coverage.
There is a clause in the law establishing Part D that says the government can't interfere with those negotiations, but this is different than the prices not being negotiated at all.
This is all correct, and, research has found that sometimes the Part D plans actually negotiate a lower price for their Medicare patients than commercial.
Also, Medicaid does not only get the lowest price ("best price"), they also get another 23% knocked off.
So to be entirely accurate, the US gov't doesn't negotiate drug prices for Medicaid, it creates it's own discounts and tell the company to screw off if they won't accept them.
I don't know shit, but I think it's not your country only... I've already wrote it but 15 years ago at Johnson&Johnson, I remember that on every desk, there was the motto of the company : "we work for the good of our patients and shareholders" (maybe not the exact wording, I think I recall the idea quite vividly). (noticed it was an "and" not a "then")
Someone has cancer and their kids are wanting the treatment (of course, it's false hope, we don't want daddy to die) without realizing what they are asking for (lifelong debt). So in addition to cancer, the patient has to grapple with that shit. Anyone with a little financial sense would probably take death, but now they have to explain that to their families why they are denying the treatment (daddy doesn't want to be with us / daddy wants to die?).
Disgusting what this country has become.