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> If it works, people often _need_ it to prolong their life or improve their health. What drug companies are selling... isn’t like what other companies are selling.

It is very much like many other products. If you don't have food you will die of starvation, if you don't have shelter you will die of exposure, etc.

The real issue is drug patents. Nobody is complaining about the price of ibuprofen any more than they complain about the price of eggs. But the patent system is doing what it's supposed to here -- twenty years ago any patented drug didn't exist, and it nominally only exists now because the inventors judged it to be sufficiently profitable to conduct the research. If you make it less profitable, you'll get less research.

There is no drug research fairy. If you don't want the money to come from high insurance premiums that pay for high drug costs, it has to come from somewhere else. And just devising some other method (like taxes) of extracting the same money from the same general public isn't really going to change much.

Pharmaceutical R&D spending isn’t all that high. It’s around $300 per capita in the US. The money is not coming from high insurance premiums.

That is around 90 Billion dollars. I'm not sure where you got that number exactly, but phrma member companies list their combined 2016 R&D expenditures at 65.3 billion[0] so it seems plausible. For context that is around the GDP of Slovakia or Sri Lanka. (65th and 66th biggest world economies)[1]

[0] https://www.phrma.org/press-release/randd-investment-by-u-s-...

[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...

I don’t understand how comparing it to the GDP of small foreign countries adds context. The important context is what I stated: it’s about $300 per person. That means that it’s a very small portion of our ~$10,000/year per capita health care expenditures. Anyone who knows how much their health insurance costs per year can immediately see how much of that funds their share of pharma R&D. The answer will almost always be “not very much.”

Pharmaceutical expenditures are about $1,000 per capita. Turning $1,000 of revenue into $300 in R&D compares very favorably to other tech industries.

According to https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... it is close to $10k, not $1k.

That is total healthcare expenditures including things like doctor/nurse/lab tech salaries, medical devices, administrative overhead, etc. The amount spent on pharma is ~$1K per capita.

I’m not sure how that’s related. My point is that pharma R&D is not a significant cause of high insurance premiums or high health care costs in general.

> My point is that pharma R&D is not a significant cause of high insurance premiums or high health care costs in general.

It's the same issue across the industry. There are patents on medical devices, diagnostic tests, imaging equipment, etc. It's a major source of costs. And nobody is claiming that it's the only one.

Pharma R&D itself is not a major source of costs. It’s around 2-3%. Sure, you could potentially make an improvement there, but its role in our massive health care costs is vastly overstated.

But drugs are produced in other countries, too, and they manage to do so without charging what US companies do.

> But drugs are produced in other countries, too, and they manage to do so without charging what US companies do.

It's a global market. Companies can develop drugs in other countries and recover a sizable chunk of their investment by selling in the US market.

In other words, the other countries aren't paying their fair share of the research costs, and that is causing a global underinvestment in medical research.

Those companies charge exactly the same as the US companies when selling to the US. Much like US companies charge the same as European companies when selling to Europe.

If you don't have food, you will die of starvation.

You don't need one particular food that is only available from one manufacturer. Not the same at all.

I think patents are anti-capitalistic, perhaps we should just get rid of them.

> We ought not look at it through our normal understanding of goods in a free market.

This is the biggest flaw in how we think about many important issues. Market economics isn’t something you decide to apply or not based on public policy. Instead, its the framework of actions and consequences against which you must determine public policy. If your policy is to have private companies develop and commercialize medicines, then you need to ensure functioning markets from drugs. That means avoiding antitrust issues, but also avoiding free-rider problems that result for drugs being easy to copy.

You can, of course, do something else, such as having the government pay to commercialize drugs. What you can’t do is eat your cake and have it too, by deciding that you can somehow “opt out” of market dynamics for industries you deem to be of public importance. It’s like saying that “supersonic flight is important, so we ought not to look at it through our normal understanding of aerodynamics.”

We most certainly do get out of market economics for some things we deem important. Think defense, water and electric utilities, and law enforcement.

We don’t “get out of market economics.” We choose to find those things through government. But we’re still slaves to market forces. E.g. the government prices water too low and thus encourages waste of water resources.

My coworker's dad had this happen to him. He got Hep C through a blood transfusion for a routine surgery. The insurance company waited until he was almost dead before starting the treatment. Now his liver is in such bad shape that if he has any alcohol it will kill him. Ridiculous, especially since they were going to pay for it anyway.

Doctors should be the ones making the medical decisions, not the faceless employees working with spreadsheets at insurance companies. Our system is backwards and needs to be overhauled.

Seems like you wouldn’t like universal healthcare then, where such things happen to _everybody_.

Stephen Hawking would have disagreed vehemently with you. https://www.theguardian.com/science/2018/mar/14/i-would-not-...

And Charlie Gard would have disagreed with Stephen had the court not decided that he should die.

There is another high profile ALS sufferer in the US: Jason Becker, a super virtuoso guitarist popular in the 80s, tragically afflicted at the very peak of his ability. Still alive, still writing music, but can’t move anything but his eyes or breathe. No one sentenced him to death or anything.

https://en.m.wikipedia.org/wiki/Jason_Becker

In a for profit company, the point of the people evaluating your policy against needed care is essentially to find ways to deny you as much care as possible. In a universal system, the motivations aren't organized around whether a profit will be made or not and so the public (rather than private) bureaucrats will at least not be actively trying to kill or otherwise immiserate you. As an additional check on their behavior, the organization is directly accountable to elected representatives, very unlike the private system.

He's lucky they let him live. Sometimes the insurance companies don't let you live. Yet idiots talk about how the government will decide who lives and who dies if we have universal healthcare. These same idiots are clearly not aware that companies are making such life and death decisions every day for their customers, placing profit above human life constantly.

This is the kind of society half of America wants to build, one where the value of human lives is much less than the value of corporate profits. Well, we're already there and it's some fucking disgusting shit indeed. It's really fucking nasty when the insurance company says we're not paying for your dad's hospital stay anymore despite what the doctors want and then he dies the first full day he's out of the hospital. Might as well just let all the murderers out of jail. I'm sure they would if someone could profit from the ensuing mayhem like insurance companies currently profit off of murder.

One possible solution: have the government buy the rights for cost + some preset mark up. Then make it a government program to produce and transmit. Could earn some serious well wishing abroad by making it available for cost/free for developing nations. That’s how to lead the world.

Nice idea. Worth at least looking into the feasibility.

Medicaid should consider medical tourism. Sure it’s absurd to have to ship patients halfway around the world to literally take some medicine but it would be cost effective...

https://en.m.wikipedia.org/wiki/Medical_tourism

English patients in the south-west are already taking the trip across the channel for much quicker operation appointments that they'd get with the NHS. For the near future that won't come at an extra cost for the patients.

>Gilead Sciences is charging $84,000 for a course of treatment and there isn’t enough money to treat every patient. Gilead offers the same treatment in Egypt for $900. (https://www.reuters.com/article/us-hepatitis-egypt-gilead-sc...)

The free market solution would be to send your patients to Egypt to get treated. Ecnonomy class flight + drugs = $2000 (maybe $3000 from Hawaii).

The biggest issue with American health care is if you have something acute that needs immediate treatment. Then you're f*ed. But for 95% of non-acute cases, travel to Latin America, travel to Europe, travel to North Africa, or Asia and get the drugs + plane ticket at out of pocket prices lower than your co-pay.

I know this is ecologically terrible in terms of CO2, but it's what I would be doing in that case.

Of course the only reason Gilead feels comfortable charging $900 to Egypt is that they believe they have the market fairly well segmented. If that market segmentation where to disintegrate then the prices in Egypt would rapidly rise (and prices in the US would no doubt fall).

I spent several years stationed in Yuma, AZ, and a lot of people would come to Yuma to do just that. They can't afford a procedure in the US, or they're waitlisted to oblivion in Canada, so they fly into Yuma, take a shuttle across the border, and have it done in Algodones.

As always, you need to be smart, but people are willing to take the risk of complications if it means the difference between a modest expense and facing a medical bankruptcy.

The same thing applies with dental work. All of my wife's root canals were done in Mexico.

https://endpts.com/pharmas-broken-business-model-an-industry...