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Comment by dpatru | Hacker News Reader

> we could create a law that sets the maximum price for medicine in the US at some multiple of what's charged abroad.

Why create more laws and complexity? Why not simply repeal the laws that prohibit importation of drugs and possibly also refuse to enforce private contracts prohibiting reimportation? The reason drugs are cheaper in Canada and Europe than in America is because of American laws that prevent importation.

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Because we not only want to pay less for drugs in America, we would like other countries to pay a bit more too and help shoulder the cost of R&D for new drugs and treatments.

An analogy: you live in an apartment building in which every other apartment has rent control. Because of this you're going to pay every extra expense for the entire building.

You could decide to become a rent controlled unit as well -- but the building owners would have less money to improve the building, and it would fall into disrepair.

Or, instead, you could try and find a way to get everyone to equitably share the improvements to the building.

R&D costs are more than covered by the price paid in Canada and indeed most nations; the US is merely funding massive pharma profit margins and fat executive bonuses.

> R&D costs are more than covered by the price paid in Canada and indeed most nations

And you would know... how?

big pharma spends more on marketing than R&D:

https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...

> big pharma spends more on marketing than R&D:

So what? They clearly believe the marketing helps them make more revenue with the drug; that has nothing to do with covering the cost of R&D.

Your argument would make sense if marketing reduced their ROI, but they clearly believe it does the opposite.

I'm sure developers in San Francisco spend more on housing than on professional/personal development, but that doesn't mean one is precluding the other.

I think it demonstrates pharma has excess cash. Also in countries where there’s a public system pharma usually has 0 advertising because people have no choice anyway.

> I think it demonstrates pharma has excess cash.

It's only "excess cash" if you assume the ROI on marketing is negative, which is a bold and unsubstantiated claim.

> Also in countries where there’s a public system pharma usually has 0 advertising because people have no choice anyway.

Direct-to-consumer advertising is only one tiny portion of marketing. European pharmaceutical companies spend massive amounts of money on marketing within Europe.

Why does RÓI have to be negative? Do you think that if marketing has good ROI then whatever money they put in they get back, meaning it creates a positive circle? Am I getting this right?

I can't read your link as it's behind a paywall.

But here's one with unrestricted access [1]: big pharma spends in average 17% of their revenue on R&D, while Apple spends 3%.

[1] https://www.investopedia.com/ask/answers/060115/how-much-dru...

Edit Here's another link that states the average for Big Pharma for 2018 was 20%

[2] https://www.fiercebiotech.com/special-report/top-10-pharma-r...

If you allow drugs to be imported it will make it impossible for a company to sell the same drug cheaper elsewhere. It will have the same effect, wouldn't it?

>we would like other countries to pay a bit more too and help shoulder the cost of R&D for new drugs and treatments.

Allowing reimportation would do exactly that by increasing (from zero) US demand for drugs from foreign markets.

EDIT: for explaining why.

The only sane way I can map the problem in question onto your analogy is by subletting rent controlled units, thereby increasing their value and decreasing the value of the uncontrolled unit. I don’t think it’s a good analogy because people have all sorts of subjective bias based on experience. Also real estate is inherently sparse and illiquid. The drug market isn’t sparse and has more liquidity.

I think explaining the economic dynamics directly leads to a self evident conclusion: internationally drug prices would increase as US consumers add to demand on foreign markets. Domestic prices would fall for the same reason

What makes you think all that money goes to R&D? Last I checked pharma was making insane profits

> The reason drugs are cheaper in Canada and Europe than in America is because of American laws that prevent importation.

The reason drugs are cheaper in Canada and Europe is because of the massive negotiating power of a single buyer

I'm sure it's not exclusive

> The reason drugs are cheaper in Canada and Europe is because of the massive negotiating power of a single buyer

Very few countries have single purchasers for pharmaceuticals.

No, but the pharmacies hold only a little bit of power over that stuff. If the single payer health plan won't cover x medicine because y is cheaper and just as effective, x is rarely going to be ordered. X being an equal price to y means x might be some doctor's first line treatment.

> No, but the pharmacies hold only a little bit of power over that stuff.

We're not talking about pharmacies; they don't enter the picture here at all.

> If the single payer health plan

Again, almost no country uses a single-payer health plan for pharmaceuticals, so this is isn't relevant.

The government mostly doesn't pay for drugs in Canada. Each province has its own insurer, and the biggest ones don't cover pharmaceuticals in the general case.

OHIP (the government-run insurer in Ontario, to which taxpayers pay the Ontario Health Premium directly) will sometimes pay some or all the cost of some pharmaceuticals in some cases (i.e, antibiotic-corticosteroid ear drops if you are under 25 or over 65, and have been experiencing an ear infection for longer than 30 days) for some classes of people (mostly youth and seniors); but by no means is there a single buyer in Canada, and there isn't one per province either.

I have bought more pharmaceuticals out of pocket in Canada than I have ever been provided during a covered clinic or emergency department visit, and I technically qualify for the youth drug coverage.

The listings for which drugs are covered under what circumstances can be found here: https://www.ontario.ca/page/check-medication-coverage/

quality standards is the reason, same for any protections around import/export.

Read about the raids on generics in India meant for the USA.

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