Why is it that much more expensive here?
Americans subsidize drugs for the rest of the world.
Top 10 pharma companies, 5/10 are US (2 UK, 2 Swiss, 1 French).
4 of the top 6 for profit margins (from 43%(!) to 19%) are US (Merck is the only outlier, 9th, at 10%).
4 of the top 5 for Sales and Marketing Spend (both on raw dollars and as a percentage of revenue) are US.
3 of the bottom 5 for R&D spend (as a percentage of revenue) are US.
I think I see a little fat that can be trimmed in the name of our so-called subsidization...
>4 of the top 5 for Sales and Marketing Spend (both on raw dollars and as a percentage of revenue) are US.
>3 of the bottom 5 for R&D spend (as a percentage of revenue) are US.
Say that $1 of marketing increases profits (exclusive of that $1) by $1.01. And you can do it 5 billion times before the effects cancel. In that case, it looks like virtually all of your money went to marketing, and yet there's no fat that can be trimmed.
http://www.eucope.org/lib/downloads/basic_facts_about_the_eu...
Ventolin inhalers are apparently available over the counter in pharmacies in the UK - where does the government enter into that?
> if I went to the Doctor it would be free
probably reduces what people are willing to pay.
[NB Prescription charges aren't the same throughout the UK and where you do pay there is a long list of people who are exempt from paying]
This keeps being said, but I've never seen any support for it.
It's probably true to say that Americans subsidise the massive advertising budgets.
Complete nonsense. I see this regurgitated again and again with nothing to back it up and it falls apart under the slightest inspection.
One of the Quora answers [1] to this question has lots of evidence and ultimately boils down to mostly marketing budgets (drugs are advertised directly to consumers here in the US and not elsewhere).
[1] https://www.quora.com/Does-the-US-subsidize-health-care-in-t...
Don't believe this one second. It's just self-serving nonsense to justify overcharging Americans.
Europe has 8 different competing companies that make epipens, but the US only has only approved 2. And the second one has to be specifically prescribed or you get the more expensive name brand. And the company that makes it apparently gives bribes to generic manufacturers to keep them from competing. And spends lots lobbying congress to let them keep doing this.
Why would a drug company spend money on DTC advertising if it "wasted" money? Your comment suggests they'd be better off not doing it at all.
The nation would be better off without the ads. They create an artificially inflated demand.
Doctors are the one's the write scripts, not drug companies. Are you saying doctors can't tell when a patient really needs a drug?
J&J, despite having 40% higher revenues ($70B vs $50B) spent nearly $2B less ($8.2B versus $9.9B) on R&D.
(I don't think the 'the US bears the burden' argument is especially compelling, I'm just saying that the country where a business is located doesn't reveal where it gets revenue)
Even with marketing spends of 20-25% of revenue, and R&D spends of 10% (and profit margins of typically 20%+), pharma has still managed to convince many Americans that they are struggling, and Americans are feeling the burden, of the US subsidizing the world's drug research (even though the two largest researching firms in the world aren't the US).
A Swiss company can get revenue from the US just as well as a US company. The location of their research lab won't reveal where they make their profits.
Basically, because the US is wealthy and much less regulated, drug companies from around the world make up a lot of their costs by selling things for more here, especially since private insurers have to pick up the tab in most cases.
Pharmaceutical companies in the S&P500 are so profitable because of barriers to entry, massive capital requirements, and a whole biotechnology industry feeding them acquisitions. Biotech startups going under with zero revenue after raising hundreds of millions of dollars from VCs and institutional investors is a regular occurrence. Since the brunt of the pure research is publicly funded and other investors chasing ROI take care of much of the R&D risk, big pharma companies benefit a lot from other people's money just for providing exit opportunities for smaller companies.
Why Trump supporters think they can have the benefits of single-payer while attacking it and proposing a ridiculous healthcare bill is beyond me.