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Comment by ekianjo | Hacker News Reader

The prices help pay for the huge cost involved in developing drugs. How many drugs were developed in France in the past 10 years compared to how many were developed in the US? You know the answer.

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I know that's what's pushed, but how much of that is true? Federal grants pay for a lot of initial frubt work, and drug companies spend around twice as much on marketing as they do on R&D. And that's with all sorts of tax benefits behooving them to call as much as possible of their budget R&D.

Marketing is needed everywhere, pharma included. You dont spread awareness of a new drug just by filing an application to the FDA. And marketing expenses are high because potential returns are high and make or break a drug. Note that you dont have really new drugs every year so you need marketing anyway to convince prescribers why your version of the drug in the same class as your competitor is slightly better. In reality most drugs of the same class are pretty similar in efficacy and side effects, but thats a tangential topic.

This is pretty specious reasoning. The US is a leader in a lot of industries that aren't healthcare.

Ever heard of Sanofi ?

Yeah and you know that their main drug market is the US and they target that market when deciding which drugs to develop? Also, ever heard of the concept of multinationals, where companies are spread around the world and not in a single country? same for Sanofi.

That's crap, often 80% of the price of a drug is marketing and profit.

Thats only if you consider the drug itself without all the cost of running operations and research. The actual profit margin at the company level is far from 80 percent. I suggest you read annual reports to educate yourself.

I think you're mischaracterizing the costs a little. It's certainly true that Company level profit margin is not in the 80s, but operating income is certainly fairly high. The profits come from compensating the Company for the risk that they have taken, and not necessarily straight for costs. There's certainly room to argue that the pharmas are capturing a too-large slice of the pie, and I personally welcome the debate.

Since Sanofi based in France is one of the top 3 pharma companies, along with Roche based in neighbouring Switzerland, I'm guessing the answer will be quite a lot.

The answer is very little compared to the whole market. And Sanofi targets the US market to fund its drug development. If they were not active there they would be a super minor company.

Personally, I would’ve liked to be asked whether I consented to paying 10x the price that every other country pays, in order to subsidize drug development, cause I definitely don’t recall ever agreeing to that deal.

The problem is your other option is likely not having the drug at all.

No, this is a myth. We know this because the same drugs often times cost a fraction of the price in other countries.

The real reason drug prices are astronomical in the US is because the US government is legally prohibited from negotiating drug prices. So the pharmaceutical companies can literally set any price they want.

You don’t have this problem with certain government agencies that are exempt from this prohibition. For example the VA can often acquire the drugs for much cheaper.

Does not matter how much it costs in other countries. the reality is that pharma companies make their revenues in the US at the level of 70 or 80 percent. You can be sure the level of investment would be very different if prices in the US were much lower. In practice the US is subsidizing drug development for the rest of the world.

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