Is it time to nationalise the pharmaceutical industry?
bmj.com
bmj.com
The power of the pharmaceutical industry comes from artificial monopolies in the form of patents, approvals and import restrictions. Since the public funds the initial research anyway, those limitations can be reduced until competition exists and medicine is once again affordable.
Turns out, all they did was change the delivery mechanism--slightly--and the next thing you know it's somehow covered under a different patent. The medication stayed exactly the same.
Right now we are looking at another rash of shortages. The Indian government has banned export of certain medications and pharmaceutical intermediates because India is worried about the coronavirus outbreak and domestic shortages.
If workers aren't getting paid directly, they would be paid by tax dollars.
The only questions are: 1) can nationalized companies make drugs cheaper? 2) If yes, are there second order effects, like reduced drug innovation.
this might be a good place for a government agency to step in and manufacture out of patent drugs and delivery devices at a reasonable price. it would at least be interesting to see the difference between the "reasonable price" and the actual cost to produce.
I've been talked at about this problem for ~hundreds of hours. It's really a depressing situation.
>What’s surprising is that the trailing edge of old insulin products did not generate a market for generic competition but rather became a set of obsolete products that were promptly removed from the U.S. market. Pork and beef insulins are not merely underutilized, they are unavailable for human use in the United States. Even when practitioners prescribe NPH and R insulin in place of insulin glargine and insulin aspart, these cheaper prescriptions are filled with newer recombinant products sold under brand names. And yet on the whole, it’s hard to say that contemporary patients who cannot afford their insulin (let alone the patent-protected glucometers and test strips required to adjust the dose) are well served by having as their only option an agent that is marginally more effective than those that could have been generically available 50 or 30 or 10 years ago, had generics manufacturers introduced cheaper versions when patents expired.
I shouldnt blame the doctors, my comment was a little facetious.
Some "low cost" versions did come out in 2019, but it feels more like the diamond industry selling both natural and lab made diamonds at different price points.
Back to my original point, Doctors seem to agree that analog insulin is preferable to older formulas. - https://www.healthline.com/diabetesmine/why-not-more-afforda...
>Since we’re talking about cheaper insulin, Novo Nordisk’s Novolin ReliOn brand deserves a mention here. Sold for just $25 a vial without a prescription at Walmart, ReliOn includes “Regular” (short-acting), NPH (longer-acting), and 70/30 (biphasic insulin), a combination of the other two. These ReliOn products are not generics or biosimilars, but rather older “human” insulins — as opposed to the newer “analog” versions being produced today. Many patients and doctors agree that these older formulations clearly don’t provide the same level of blood glucose management as newer insulins. But if you’re forced to choose between using them and doing without or rationing insulin, these older insulins are certainly preferable.
The risk is real. https://www.usatoday.com/story/news/nation/2019/08/09/man-di...
Edit: adding the wkp quote: "By the end of 2019 Civica had 18 medications (28 SKUs) in production, and plans to bring over 100 medications to market in five years through various manufacturing approaches such as partnerships, developing ANDAs, and building its own manufacturing capability."
Plus the fact that it is about a concept. In vague terms, I'm thinking it is better to act (doing, producing, finding alternatives, maybe and using monopoly laws?), than to try to restrict what someone else does.
One problem with the US healthcare system is the lack of spare capacity. It increases profits when everything is well, but if there's a pandemic or mass casualty incident there's shortages. Economists know how to handle inelastic supply and sudden demand shocks, but the message hasn't gotten through to public health. Perhaps that's intentional.
Even IF the healthcare company did not spend tons on money on commercials there will be those drugs that if you want to develop them they will cost a lot of money for the one paying (government, insurance company or individual) if the company wants to get back it's money and ideally make some kind of profit (even if it is very average/low).
The problem is more in the healthcare _system_ whose incentives are not aligned with the patients foremost, but rather is more geared towards extracting as much as possible from insurance companies who in turn are disincentivized to give their patients decent care, in many ways.
The current system is completely bonkers. Insurance company profits are capped at a fixed percent, so they want to drive costs as high as possible. Pharma Benefit managers get paid by insurance based on list prices, so they also want to maximize price. Lastly, the manufacturer gets paid by PBMs based on list price minus kickbacks, and obviously wants to turn a profit
You need to keep the politicians out of the pipeline and put physicians and pharmacologists in charge. It's more difficult in a country where the public service has been gutted for 40 years, but it has to be done.
Right now there is insufficient research in antibiotics and tropical diseases and far too much in cancer. The market isn't going to fix that misallocation of funds.
That's easy to fix. Pass a law forbidding any non-progressive political parties from forming or having a say in government. What could possibly go wrong?
Let's look to some one-party countries to find out!
Oh, look, everything.
What? That runs against the bill of rights right out of the gate.
- Pharmaceutical companies sponsoring/paying doctors to push their products
- Paying doctors to put their names on papers they haven't even written or reward for research they never actually did
- Companies that engage in patent thicketing and product hopping (drug companies abusing the patent system to hold onto market share and prevent any generic competition)
- Pharmaceutical companies engaging in price gouging tactics
Obviously these are two different things. What I’m saying is whether or not healthcare is private or nationalized, the pharma industry in those countries are not nationalized (like say the way they were in the eastern bloc).
Big pharma excels at the subsequent stage: taking the best ideas generated by scientists and bringing them to market, using its huge financial firepower to navigate the complex regulatory environment.
If the government were to nationalize the industry, wouldn't the regulatory environment become simpler? Regulations exist because of the fundamental antagonism between profit-making and safety & efficacy. If the sector were nationalized, that would shift (and possibly diminish) that conflict.
Industry may well have expertise in the expensive process of ensuring safety and efficacy, but if that's made more expensive by having regulations thrust on it from outside, why not save the cost?
In fact the opposite is more likely. If pharma is nationalised - or better, internationalised - it would become economic to fund solutions for common conditions that aren't currently considered profitable.
Have you seen the DoD and other gov entity contracting? Perhaps we can expect the same level of contracting that the DoD has today, outsourcing those expensive mistakes to others, for them to take the blame/fall/
I can see a situation where pharma bureaucrats refuse to approve or pursue things, because government mistakes are more unforgivable than business mistakes (where failure and experiments are often encouraged). I would expect more layers of approval/red-tape to develop as no-one wants to accept the blame of approving.
> Have you seen the DoD and other gov entity contracting?
DoD contracting seems like worst of both worlds: a combination of bureaucracy, aggressive profiteering, and rare real-world evaluation of the products.
I'm kinda surprised military production hasn't been nationalized. It seems like it's mainly done by a handful of companies that are almost wholly dependent on government contracts, and the government is loathe to steer too much work away from any of these entities in order to preserve their capability.
How would eliminating the profit margin make it more economically attractive develop these products?
Perhaps more solutions would be developed, but they would have to be subsidized.
We've had appalling experiences with privatising critical infrastructure in the UK. Not only is privatisation almost invariably more expensive for tax payers and end users, and privatised companies reliably behave like bad actors, but privatised companies tend to continue to benefit from state-sponsored monopoly positions - because the cost of entry for national-scale operations is too high for start-ups.
For healthcare, a single price negotiated by a single state-owned org is hugely more efficient at reliable and economic service provision than any privatised alternative.
The only thing it's less efficient at is generating shareholder profits.
or a drugmaking co-op chartered and initially funded by the feds?
I'd be down for this.
A public drugmaker could be obligated to have implemented processes to manufacture every approved drug. If a maker engaged in price-gouging, or had its facilities disrupted, the public drugmaker could supply an alternative supply at fair prices.
The interesting thing about this is the Cystic Fibrosis Foundation had to fund the research themselves in the small hopes they found anything. And then the drug was sold to a company for a good amount which will be used for ongoing research on Cystic Fibrosis. Now the CFF has a pile of money to persue better treatment. Perhaps what Corbyn should have said is these treatments are important so lets fund even more into CF research.
There's a reason why medicare is so bloody expensive...
Who gets to decide what drugs are worth tax payer dollars?
Can we sue the government if a drug causes problems?
Why would we limit who can invent drugs and bring them to market to one entity?
What if a president or congress tries to stop research on an important, but controversial drug for political reasons?
Just no.
Turning something with only short term incentives into a long term payout is something government excels at. Government can afford to pay things back slowly without quarterly returns.
Private industry can still handle invention (possibly with NSF grants involved in initial production cost and testing, maybe leading to partial government ownership or a rebate during the eminent domain part) and production and distribution.
How would one do that without a fair market?
[1] https://www.sciencemag.org/news/2017/03/data-check-us-govern...
Could you patent the sun?
More competition is required, which to my mind suggests introducing public pharmaceuticals, but also deregulating drugs in general.
The problem is that these companies have the wrong incentives and are producing products where they think they can get the best profits.
This is where government policies will help. Governments need to give tax credits for drugs that are needed and support the development of low-cost alternatives to expensive life-saving drugs.
The Orphan Drug Act of 1983 has been responsible for the development of many drugs that would never have been developed without a few government incentives. We should learn from that and apply it to other drugs.
We bitch about farmers getting lots of help from the government but the result is that we get basic foods at a very affordable price. We can learn from those policies and apply them to pharma.
The capitalist system works. But governments need to change policies to tweak the system so that companies develop what we need at an affordable price.
Tangentially related: Bernie Sanders should stop calling himself a socialist, partly because he's never actually advocated for nationalizing industries (redistributing the means of production to the "peoples state"), and partly because it's so damn unpopular with the electorate to call yourself one.
I'm just surprised to see it related to anything other than social media. It seems like every week we get a new article calling for the government to take over Google, Facebook and Twitter and force them to be "public carriers."
AFAIK, Bernie advocates for Nordic style "social democracy," which isn't "capital S Socialism" per se, but I agree that Americans who tend to see anything to the left of laissez-faire free markets as just different shades of communism might not grasp the nuance.
Still, for someone who should be so damn unpopular, Bernie and his socialism seems to be pretty popular. Just not with his own party, unfortunately.
No, thank you.
I have some background studying Russian (including Soviet) history (a semester class on Stalin, other reading, etc); we can observe what is happening to Venezuela, and many other cases where it sounded good, to someone, to make things better by more government control. I have experience dealing with Medicare (USA) (details at http://lukecall.net/e-9223372036854586100.html ). And (I hope) some grasp of the underlying principles involved of freedom vs. control, allowing mistakes vs. severely stifling everyone.
All of which most strongly persuade me that nationalizing more health-related things is a really bad idea. It prevents us from doing more good otherwise, in the private sector.
Edit: One interesting positive is civica rx, a nonprofit that is a great start, for example. (https://duckduckgo.com/?q=civica+rx&ia=web https://en.wikipedia.org/wiki/Civica_Rx ).
Other laws could be appropriate, but only very thoughtfully, with foundational principles of liberty in mind.
But in case you're serious: Sure, because that worked so well for the USSR's food supply.
(That was sarcasm.)
The logic seems plain.
Grow your own food or hire a guy to do it for you, but the guy wants to skin you.
Letting government run something _may_ result in a more egalitarian distribution of fairly shitty service (see USPS, VA Health Care, etc.) but it absolutely will not result in a more efficient system.
The US pays at least 2x more per capita for health care than pretty much any other country on the planet. And I have never seen it even close to top-ranked in any health care quality statistics.