This is why there's a spike in infection rate among older people, and why hep C is considered a looming cost crisis for Medicare -- we don't yet know the full extent of the infectious disaster that was unscreened blood, but it's ticking away inside anyone who received a transfusion prior to 1992.
Copenhagen theory of ethics:
If person A ignores a problem, but person B comes up with an expensive solution to the problem, person B is the monster because he should have come up with a cheap solution. Person A is completely innocent.
(Obviously this is nuts.)
Obviously you'd have to spend a while funding both R&D and Medicaid/etc, while the new drugs are in development and the old ones are still under patent, and I'm sure there's other details I've missed, but it seems like there should be some way to make the system make more sense.
I won't try to rehash all of the permutations of ways that might work (just search HN for any discussion of drug companies and patents and you will be able to enumerate them). I suspect that there are ways to improve the present system substantially, but I concede that the problem is much harder than I can solve. Hopefully someone will be able to do it some day.
How does it work in European countries where health care is (mostly) paid for by the government? Do these companies still charge the same prices as in the US?
Sadly for these companies, and fortunate for the vast majority of Australians, it is so popular and successful that any attempt to undermine it puts the government at risk of being turfed out in the next general election.
The Abbott government tried to force through a hair-brained GP co-payment and it was so unpopular that even when it was scrapped they eventually had to replace the Treasurer and Prime Minister for fear of being routed in the next general election.
The majority of global R&D happens in the US market, even though the entire world benefits from it. So pharmaceutical companies have come to expect to recoup their R&D costs from the US market. Ultimately, this means that European markets benefit from the research without having to shoulder the bulk of the costs from it.
If they couldn't do that here, then yes, they might adjust their business models and try and charge more in Europe and India. But as mentioned above, India doesn't recognize patents, and since the R&D isn't taking place in Europe, there's less of a need to charge the same prices there. And because there isn't one single European market, its more complicated to price drugs there in such a way as to reliably turn a profit (after accounting for R&D) in each individual country than it is in the US, where insurance players are licensed by state but the pharmaceutical market is otherwise roughly uniform across all 50 states.
Companies charge as much as they can, they don't follow some altruistic "we love Europe" plan.
I understand your point though: Of course it's easier to bask in American exceptionalism than facing the truth that corporations rule the US and the only human value they are interested in is the amount of dollars extractable through any means imaginable.
Nobody said anything about altruism, or 'loving Europe'. I don't know where you're getting either of those ideas from.
> Of course it's easier to bask in American exceptionalism
This is hardly a claim of American exceptionalism. It's a non-normative observation about the existing structure of the markets. It is not a statement that this is how it always must be, or that this is how it should be. It is merely a description of what currently is.
There was a lot of posturing and complaining by pharmaceutical companies in the U.S. and the U.S. Government tried to heavy the Indian Government, but to no avail.
When it became apparent that the Indians weren't going to budge, and with a growing realisation that other nations would ether do the same thing or import their drugs from India, the companies agreed to drastically reduce their prices on "humanitarian" grounds. Now they still make massive profits, just they are less massive than they once were.
This is now happening with academic research.
Nobody will shed any tears because greedy multinationals make a lower profit to ensure less people die from disease. Nobody will weep over Elsevier's reduced earning if it frees up necessary information and research findings so science can progress for the benefit of all mankind.
The entrenched interests of rich, arrogant corporate executives and business owners in first world nations are finally being disrupted by poorer nations who don't care about this group of people. But that's what happens when you gain an attitude on I weaning entitlement - you eventually overreach so far you come undone, and nobody feels any sympathy when it happens.
This not to mention all the extra capital needed to fund research into all of the drugs that never make it to market before a company finds something that works.
It's a pretty gross abuse of the original idea of patents.
Now, figure out what the correct dose is, how to get it into a mammal so that it's not metabolized into uselessness, how much you can safely give the mammal.
Now, start again with humans and hope you don't get to the final stage only to find out that it's not as effective as existing treatments or has side effects that will open you up to lawsuits.
Finally, once you've done all that, scale out the production of your compound such that you can prove that every dose meets FDA quality requirements.
https://donttradeourlivesaway.wordpress.com/2015/10/20/how-t...
Don't oversimplify things like this, there are lots of situations you aren't thinking about..
He's just staying that a lot of Hep C care is taxpayer funded, and that Gilead is therefore price gouging the American taxpayer. That your dad is also being price gouged, over in Europe, is just icing on the cake.
As in: the idea behind capitalism (the reason we put up with it) is not that price-gouging is some fundamental right we should worship, but because capitalism works. What's that mean? It efficiently allocates resources. How does it efficiently allocate resources? By letting a fluid market with many competing buyers and sellers figure out an appropriate price.
Notably, patents of life-sustaining medicines utterly destroy that cornerstone of capitalism. People can and will pay almost anything to get that drug, so the seller can charge what it wants - that's not capitalism as it's supposed to work, that's a hostage scenario.
I don't know what the best alternative is, but I'm convinced that there are many trivially better solutions to allocating resources to medical research, efficacy testing and production than what we're doing now. Every social network, things like google's pagerank, scientific journal impact ratings - all represent alternative means to determine worth in a competitive fashion; and even competition isn't strictly necessary - for some scenarios plain old raw computation to solve for the optimal solution may be possible nowadays. We're not even trying to improve the status quo.
Capitalism allocates resources efficiently without external forces like patents. Patents are a fix to force capitalism to be more socially responsible with sharing of knowledge.
Would doing that put an end to commercial drug development? Or would commercial drug makers continue to seek treatments where they saw opportunities to profit?
Sofosbuvir is a really great test of how we reason about this stuff. The price is high and easy to balk at, but it's cheaper and better than the previous treatment. Cheaper and better are clearly compatible with the profit motive. So we are left with our intuition that the price is unfairly high. I think part of the answer is to look at how medical payments are structured.
I don't think it is appropriate to compare a drug company that created a life-saving drug to a hostage taker. And in this scenario it is particularly inappropriate, because they are charging less for the drug than the previous best treatments cost!
Furthermore, there is an alternative here. The patent only covers this one cure. You are welcome to go out and spend $2-3 billion to try to create your own drug. (But that would be pretty risky, wouldn't it? And good luck raising the money if you plan on giving the drug away.)
1. A drug company can charge whatever it wants for a drug until some predefined multiple of the cost of developing the drug is recovered.
2. After that point, the patent expires and its up to the free market to determine prices.
Set the multiple of R&D costs high enough that it allows for the low success rate of drug research, and you have a model that still encourages risk taking whilst preventing profiteering.
Also, this proposal means that while the patent is not expired, production is still monopolized.
And there is the issue of testing vs. research. There is an argument to be made that drug development isn't the hard part (or at least not always). The hard part is figuring out how to use the drug, and doing clinical trials to prove efficacy and safety.
E.g. we currently live in the wonky situation where there is little incentive to discover new uses for existing out-of-patent drugs. It's much more worthwhile to find a new drug that does the same thing.
I think patents-as-monopolies are a bad idea. A citation-based subsidy and/or fixed license fee, preferably on a decreasing schedule with a capped or only slowly growing integral would align motives with outcomes more clearly.
I mean, I don't see the problem if research becomes independently specialized from exploitation.
However, that does not mean that they (or some other organization) couldn't have developed this drug for less.
The question isn't whether it's better that what came before, the question is whether it's efficient. If there were many buyers and sellers, you'd have some faith that is at least approximately efficient.
But with just one seller, they could recoup their costs many, many times over. That's terribly inefficient - those resources could be better used elsewhere.
And it's quite a bit worse than that - by being so inefficient, you're creating all kinds of perverse incentives. Instead of trying to find and create a worthwhile drug, the aim is to find those drugs with captive audiences. The Martin Shkreli saga illustrates that quite blatantly.
The appropriate benchmark is efficiency, not whether the drug at the offered price is better than nothing.
United States: 698
India: 33
https://en.wikipedia.org/wiki/List_of_countries_by_incarcera...