Hacker News Reader

Comment by AnthonyMouse | Hacker News Reader

This one is particularly prickly because the high cost paid in the US funds medical R&D and extremely expensive clinical trials which other countries are free riding on by imposing price controls. We still need to fund the R&D and clinical trials (unless they could be made less expensive somehow), so the most obvious solution would be to have other countries pay their fair share so the US could stop subsidizing everybody else. But that's hard to get.

View on HN

Europe does drug R&D and still manages to sell their drugs at a reasonable price to sick people (generally because their governments utilize their buying power for the good of their citizens).

It seems to me that US people have been sold FUD by there own pharma companies, if I’m honest.

> Europe does drug R&D and still manages to sell their drugs at a reasonable price to sick people

Most novel R&D, in America and Europe, happens in biotech. (“Big” pharma does trials, manufacturing scaling and distribution.) The investment thesis for most of this research does not work without the American market.

This doesn’t mean high drug prices are a necessity. Just that the funding needs to be replaced if we want to preserve innovation.

But to be fair, the US pharma sector spends roughly as much on marketing as it does on R&D. And a huge chunk of that R&D budget goes into analogue drugs to either sidestep patents from rivals or maintain profit margins when their own patents expire (they can then use that huge marketing budget to get the newly patented drug to take over for the old one with the nearly-expired patent, despite small or non-existent benefits from a medical perspective). So long story short, there's a pretty good case to be made that public research with somewhere between 1/10th and 1/5th the budget of big pharma is all it takes to match or overtake them in innovation, as measured by actual benefit to the patients.

> But to be fair, the US pharma sector spends roughly as much on marketing as it does on R&D.

Spending money on marketing lowers prices by increasing volumes.

If you spend a billion dollars on R&D and then spend nothing on marketing and sell to 200,000 customers, they would each have to pay $5000 to fund the R&D. If you spend a billion dollars on R&D and two billion dollars on marketing and sell to a million customers, they would each have to pay $3000 to fund both the R&D and the marketing.

And it also does something useful, assuming the new drug is actually beneficial, by making people aware of the existence of something that would make their lives better. It helps no one to invent a great new thing that then nobody uses because nobody knows it exists.

> And a huge chunk of that R&D budget goes into analogue drugs to either sidestep patents from rivals or maintain profit margins when their own patents expire (they can then use that huge marketing budget to get the newly patented drug to take over for the old one with the nearly-expired patent, despite small or non-existent benefits from a medical perspective).

It doesn't actually cost that much to do that because you already know what you're looking for in that case. It's the real R&D that costs money.

> So long story short, there's a pretty good case to be made that public research with somewhere between 1/10th and 1/5th the budget of big pharma is all it takes to match or overtake them in innovation, as measured by actual benefit to the patients.

The biggest problem with public research funding is how to allocate it.

With a profit motive and market competition, the people who allocate research funding inefficiently go out of business and the people who allocate it well make a lot of money, and then have more money to fund more research.

Without that, research funding turns into defense contracting and then we waste trillions of dollars and have nothing to show for it. Or worse, politicians say we'll only need 1/10th of the budget even though the incentives aren't actually there to improve efficiency, and then we get 1/10th of the research.

> Spending money on marketing lowers prices by increasing volumes.

That explains why they do it, but not why it's useful to the public. Marketing isn't necessarily a zero sum game, but it in the case of direct-to-consumer drug advertisments, it's pretty close.

> Spending money on marketing lowers prices by increasing volumes.

Do you have any proof of this - had you said it increases profits - I'd have readily agreed with you.

> If you spend a billion dollars on R&D and then spend nothing on marketing and sell to 200,000 customers, they would each have to pay $5000 to fund the R&D. If you spend a billion dollars on R&D and two billion dollars on marketing and sell to a million customers, they would each have to pay $3000 to fund both the R&D and the marketing.

Or, in line with their "fiduciary duty to shareholders", the company still sells at $5000 to a million customers: see Martin Shkreli, Epipens, or dozens of other real-life examples that prove your lower-price hypothesis wrong. Without competition, drug manufacturers have no incentive to lower prices when they can make more profits instead.

Spending money on marketing MIGHT lower prices when looking at a single company.

For a market like pharmaceuticals where patients are prescribed by Dr's and are going to be subscribed one thing or another regardless, the lack of any marketing wouldn't really reduce the amount of volume in the industry as a whole, might just switch around which drugs/companies it goes to.

That's fair enough, maybe Europeans should pay more than they do for pharmaceuticals and get away with paying less due to the huge profits Pharma makes out of the US health care system.

That's not really on Europe though. It's for the US to sort out it's horrifically dysfunctional health care system, if it chooses to. Honestly I don't know if what Biden plans to do, particularly in relation to Big Pharma is reasonable. I suspect it's likely to be treating the symptoms with regulation rather than the disease through reform, but maybe that's what you do when treating the disease runs into insurmountable political resistance.

Political resistance is the disease.

MY understanding (at least in the UK) was that hospitals and universities also do a lot of research (often cutting-edge), and are often the source of innovation. These entities are largely publicly funded.

Most drugs appear first in publicly-funded research, but so does every other compound that can get past a p value of 0.05.

The main value proposition of big pharma is that they take those results, find the ones that actually work (very few of them do), study them for side effects, and characterize them. There is a LOT of work between the published research and an actual drug (there is actually significantly more risk and cost to go from a paper to a drug than to write the initial paper).

Do you have a source for that? It's kinda hard to believe that America happily is paying the research for the world for so long without trump (or anyone) making a huge deal out of it.

China, and Russia, and other countries, are making big breakthroughs in biotech, but we are hesitant on believing their results--now.

They have the advantage of pushing through Clinical trials without much oversight.

I am all for strict Clinical trial protocols, but our biotech companies are testing their drugs in countries that don't have strict protocols on safety.

I don't get the price increase argument anymore. The biotech companies are multinational. It's just Americans give them the most money.

I'm getting afraid of the whole, "American biotech will cure anything because of the financial perks they get" mantra too.

I pay out of pocket for my needs at Costco. Their prices are a bit above wholesale. That said, I pay way to much for certain drugs. I guarantee their are shinagigans going on in the pricing if certain drugs.

Bupenorpine us a generic drug. Why gave I been paying $70 for a decade?

(This drug is America's answer to the opioid crisis. I was prescribed this drug off label for another condition. It's the price that has me scratching my head. It's been the same price for too long. Other pharmacy's price it higher.)

I won't get started on the drugs (new--not genetic) prescribed for depression. And then reading Irving Kirsch's research. His paper can be found, but you need to hunt for it. I'll offer this interview.

https://www.aarp.org/health/drugs-supplements/info-05-2010/d...

I am proud of Biden's promise to lower prices. I am so glad he's at the helm. I'm not being overly political. I just am just at bit hopeful now. Something I haven't been in 4 plus years.

> They have the advantage of pushing through Clinical trials without much oversight.

This isn't an advantage. What you end up with is a lack of clarity on what works well, what doesn't, and why. It makes it easy to go from A to B, a hypothesis to a drug, but it clouds what C, D, and E should be, as that lack of oversight turns into a lack of deeper insight.

To get approval in US and Europe, the trials need to be of the same quality no matter where they are run. Sometimes it may be cheaper in poorer countries because you don't have to pay your volunteers as much. You still need to check all the appropriate boxes regarding informed consent as anywhere else. And, of course, western companies are entirely capable to run trials anywhere in the world. The COVID vaccine trials were run in Europe, the US, South Africa, Israel, and really any place where the incidence was high enough.

And China and Russia are not "making big breakthroughs": just look at the vaccines again: BioNTech/Moderna/J&J/AZ all work extremely well, all things considered. The Russian and Chinese vaccines don't. Just ask/look at the charts of Chile. Or any Russian.

Am Russian, am vaccinated with Sputnik V, would do it again. Yes, the study was rushed and details were missing, but, eventually, all things got in order.

And it's a real working vaccine, effects of which I see basically every day on my friends.

Yes: unless a vaccine is harmful, it’s better to have than not. Higher effectiveness is better, of course, but if there was ever a time to say “don’t let perfect be the enemy of good”, it’s during a raging pandemic.

> it's a real working vaccine

It is better than nothing. But it’s a far cry from the best vaccines (Pfizer, Moderna, and to a lesser degree, AstraZeneca), which protect against novel variants and can produce some level of herd immunity.

In the context of this discussion, ‘Europe’ doesn’t do ‘R&D’.

Biotech/Pharma are international. Irrespective of the home location of the organisation, virtually every drug trial from phase I onwards will be run in multiple countries. Further, virtually every drug found to work and filed with regulators for a license, will be filed internationally: Europe (EMA), US (FDA), and a whole host of smaller independent country regulators: Japan, Australia, Switzerland, etc.

So within the overall business model of a given company, there’s no link between the countries in which research is performed, and the prices ultimately set in those countries.

Drugs are more expensive in the US simply because there aren’t any pricing controls (beyond maybe some bargaining by providers; I can only assume this is because of the power of lobbying over the political process in the US). Drugs are cheaper where there’s an established process for determining or controlling prices.

> Drugs are more expensive in the US simply because there aren’t any pricing controls...

There aren't any other markets where "pricing controls" are needed. Drugs are more expensive in the US simply because it is illegal for a 3rd party to sell them.

If it were legal, anyone could buy the drugs where they are cheapest and ship them to America. The problem is obviously that competition is banned. If that isn't the problem, the entire population of the world is remarkably indifferent to a really easy opportunity to make lots of money.

And, I suppose almost to obviously to add, if competition is illegal then prices go up.

I’m not an expert on the import/export side.

When I used the term ‘pricing control’, I was referring to the systems that some countries (eg UK, Germany) have in place for determining the price they’ll pay for a drug based on (roughly) the value it brings to patients. (The best known of these is probably NICE in the UK; it’s not a perfect system, but it’s a pretty good attempt.) Other countries in turn ‘reference’ their price from a number of similar countries including those with formal processes.

Broadly, this is why drug prices are controlled and lower in Europe vs. the US.

In the US, even where there are competing drugs in the same disease, there’s no pressure on prices - manufacturers can just keep on racking up their prices almost without a concern.

Well, ok. But the reason it costs more in the US is because it is illegal to go to Germany, buy drugs, ship them to the US & sell them.

If that was legal, someone would do it and make bank. And it is the US that is responsible for those laws.

I doubt that is legal anywhere tho. I for sure can't legally sell meds I imported from somewhere else.

> In the context of this discussion, ‘Europe’ doesn’t do ‘R&D’.

Ever wonder why it’s the Pfizer-BioNTech vaccine? It’s because the simple nationalist narrative you’re repeating is misrepresenting a far more complicated international research story.

https://en.wikipedia.org/wiki/BioNTech

> Europe does drug R&D and still manages to sell their drugs at a reasonable price to sick people

Every European drug firm also sells in the US, so I suspect that's taken into account in their business model

I would argue Big Pharma free rides its self on research from universities around the world which are mostly publicly funded and not for profit.

The US represents less than 34% of global research. https://pubmed.ncbi.nlm.nih.gov/17354441/

I'm sure they benefit from public research, lost of industries do, but even public Universities are perfectly capable of patenting their discoveries and getting paid by companies using them. Ours here in the UK certainly do this.

Patents are an attempt to protect risk. If you're getting my money to invest without any risk to yourself, you don't deserve a patent.

Here's an easy solution:

Patent and copyright times are limited proportionally by the percentage of government money invested and at the end of that time, the research must be made publicly available.

> The US represents less than 34% of global research

and yet, the US has about 5% of the world's population. So proportionally, they are punching way above their weight.

It would be fairer to compare by wealth, where the USA is at 30.2%

https://en.wikipedia.org/wiki/List_of_countries_by_total_wea...

if you use wealth, we are a back at why americans spend more on per captia than any other countries: because they can (because they are wealthier).

Healthcare, especially in older population, starts to behave like a luxury good at upper ends of cost / care.

US healthcare costs are similar to other developed countries once normalized by per capita GDP?

I thought they were still higher.

And 25% of the world's prison population. Do we want to keep this stats dump going or did you have a point?

In 2018, the average insulin price in the US was $98.70, compared to $6.94 in Australia, $12.00 in Canada, and $7.52 in the UK. This is a 100 year old drug.

Correct. The price of Insulin has nothing to do with "funding research." It is simply price gouging - that's it.

The price of insulin specifically is largely a consequence of perverse regulatory incentives, particularly the Obamacare-related expansion of the 340B Drug Pricing Program and its mandatory, byzantine, opaque rebate structures. Don't think it's just the manufacturers who are at the center of this price gouging, not by a long shot; hospitals and pharmacies are all too happy to ride that gravy train.

Where can I find out more information about it.?

It isn't a 100 year old drug. There are newer formulations that are faster acting, longer lasting, easier to administer, etc. They're newer so they're still under patent so they're a lot more expensive (because the rest of the world makes the US pay to develop the newer formulations). When insurance is paying for it, people prefer the newer formulations.

Then, since most people have insurance, there wasn't enough of a market for the older formulations for anybody to bother making them for the margins you get for making a generic. So the prices were high for people paying out of pocket.

This doesn't pass the smell test.

Anyone making the decade-old version of insulin and selling it for 1% of the price would corner a large portion of the market immediately. Anyone without good health insurance, which is a large and increasing part of the population, would immediately jump on the lower priced version.

And since when are insurance companies excited to pay for the more expensive drug with limited extra utility anyway?

You are giving far too much credit to what is on the face of it a broken system.

^ Exactly this. They can sell the premium version for however much they choose to, but the cheaper one - the affordable, the one that should be given out for free - is simply not available enough, it's being suppressed by the pharma industry in favor of their own premium, expensive product.

I mean what are people else going to do, die? Oh wait.

I don't understand commenters in this thread coming out in defense of pharmacy companies using their monopoly or influence to deny health care to people that need it. It should be considered a criminal offense. It's anti-competitive. I mean with insulin it's a massive hole in the market - why hasn't anyone else been able to jump into that gap and make a killing?

You can buy the old one for cheap now: https://diabetesstrong.com/walmart-insulin/

That's 6% not 1% of the cost of new ones, though.

Since this month - and it is headline news all over the country... It shouldn't be extraordinary that cheap drugs needed by millions are available cheaply. (See also: Epi Pens.)

Since 2000.

>McInnis explained since 2000, Walmart has sold ReliOn insulin, the only private insulin brand on the market retailing at $24.88 per vial.

https://www.wfmynews2.com/article/news/verify-yes-walmart-do...

Walmart just started selling analog insulin(the newer formulation) just recently. https://nypost.com/2021/06/29/walmart-to-launch-its-own-low-...

Still 2 to 3 times as much as literally everywhere else.

> Anyone without good health insurance, which is a large and increasing part of the population, would immediately jump on the lower priced version.

Medicine isn't like a supermarket, people usually just take what their doctor/hospital prescribes. In addition, I think it's likely that those with no/worse health insurance are on average less informed.

I often talk about costs with doctors. Sometimes they offer things my health care does not (fully) cover, sometimes it's about pure luxury (like a arm bandage that is super nice to wear). Or my dentist, I can choose between different pain killers, one of them costs a little extra but goes away way faster.

I would think it's weird if my doc assumes I just want the cheapest available option.

> This doesn't pass the smell test.

We saw something similar happen during the pandemic. There has to be infrastructure and people with the skill and knowledge to support an industry available, and even if you had those people available you can't just ramp up production in any old place. That's why there were supply chain problems and will continue to be, the UK won't be making its own drugs (designing, yes, making, no) just because it did in the past, the US won't be making computer chips just because it did in the past. There being a profit to be made isn't enough.

> You are giving far too much credit to what is on the face of it a broken system.

The system may be broken but fixing it takes more than a wave of the hand.

That was true at one point, but the newer formulations of insulin are old enough to mostly have biosimilars, aka follow-ons, the equivalent of generics for drugs produced by bioengineering. Humalog/Lispro/Admelog, Lantus/Basaglar and others, in many cases made by the same company as the original.

The prices of insulin have been increased steadily each year by about 11% for the past 20 years. There's nothing about research or costs that justify that for 20 year old drugs.

https://www.businessinsider.com/insulin-price-increased-last...

The old formulations (Human insulin, NPH) can be purchased without a prescription at Walmart for fairly low prices - the price that people pay for modern insulin in the rest of the world.

> Then, since most people have insurance, there wasn't enough of a market for the older formulations for anybody to bother making them for the margins you get for making a generic.

Is there some research confirming that? It doesn't quite match my out-of-us experience with other drugs. I get a choice of 2-3 brands of ibuprofen and another 1-2 generics for it. Why wouldn't the same apply to insulin? I expect that it's also not 100% covered? (please correct me here)

You can buy the original insulins from 80 years ago for $35-50. Those are human/porcine insulin and one called NPH that has an intermediate duration. Some people who used those before the newer long/short/rapid actings were developed still prefer them, and others use them for cost reasons esp. because they can be obtained in the US without a prescription. I only know of one brand, Humulin by Lilly.

For modern insulin, they were indeed patented but mostly generics called follow-ons or biosimilars are available. Lantus has an alternative Basaglar that costs about 1/3 as a much. Humalog can be replaced with Admelog. The manufacturer of Novolog makes a biosimilar of their own insulin and sells it for 1/3 as much, if that makes any sense.

The various types differ a bit... Lantus has a slower absorption and thus longer duration than it's main competitor, Levemir. Novolog differs from Humalog in one protein on one side of the chain or something. Some people can't use one or the other due to allergies to the excipients or unexplained resistance to the effects.

"(because the rest of the world makes the US pay to develop the newer formulations)"

How does the rest of the world make the US do that?!?

At least give the option of the old shit

> At least give the option of the old shit

It’s available. It’s just far less convenient and much easier to fuck up in a life-threatening way.

The insulin price meme is a particularly bad one.

It is really not. The price disparity between US and rest of world is quite massive.

The often quoted prices do not take into account the actual price paid by consumers, the type of insulin being compared, or relative purchasing power of the countries. I don't actually know how if insulin is actually all that much more expensive across the world when taking those factors into account. Seems like cherry picking without controlling for all of those factors

Walmart sells vials of the generic “old shit” for cheap.

Do you have a source? I wasn't able to find any mention of it on Walmart's website.

https://diabetesstrong.com/walmart-insulin/

If it was actually 100 years old the patent would be expired. So you're actually seeing newer drugs that use the same name.

I encourage you to look up evergreening. Pharmaceuticals are playing every (legal and illegal) trick to extend patent protection. The purpose of the new formulations is often only to extend patent protection. Together with extensive advertisement campaigns to get doctors to use the new formula not all.

Pharmaceutical companies spend even more on advertising than on R&D and still highly profitable though.

According to one google search result total pharma ad spend was $6.58 billion in 2020.

According to the CBO pharma R&D was $83 billion in 2019.

References:

https://www.fiercepharma.com/special-report/top-10-ad-spende...

https://www.cbo.gov/publication/57126

You are off by a factor 10. The 1 billion is in total over all the time needed to produce the drug (about 10 years), while ads are per year.

ok, so 65 drugs in development, with 6.5 drugs released per year? does that seem plausible for the entire pharma industry?

The FDA approved 53 novel drugs in 2020. That was relatively high; most years have lower totals.

https://www.statista.com/statistics/817534/annual-novel-drug...

You notice you are off by a factor 10 and don't pause for a moment but instead immediately go "ok, so"?

If it costs a billion dollars to develop a drug and pharma spends 6.5 billion on ads, that would mean an implausibly small number of drugs being developed, no?

I don't see any reason to believe that pharma spends more on ads than R&D. Do you?

Just to chime in; the poster you're replying to is correct regarding your incorrectness related to the relative weighting of R&D vs. Marketing spend.

Pull a public filing for these companies and take a look at their balance sheets; it's pretty straight forward.

> that would mean

No.

> Do you?

The fact that you just reposted your above comment without any change despite knowing it was wrong and despite being called out on that. That seems like a strong point in favor of the opposite of whatever your position is.

It could easily be the case that without the advertising spend they would not be profitable. Do you think these publicly traded companies are wasting tons of money on advertising? Where is the shareholder outrage?

It could also be tragic of the commons effect though. High ad spend is necessitated by the high ad spend of competitors.

I worked in pharma advertising for a little bit: There are two sides, consumer and clinical which I believe are about equal spends (might be wrong, but it's significant anyway). Clinical advertising is mostly used to recruit doctors to recruit patients to take part in clinicial trials, and is a necessary component of R&D. Think lots of tradeshows with fancy signage, interactive touchscreens, apps, etc.

Isn't part of the problem that the US/FDA trial and certification process is designed to be very expensive? And who benefits from a moat created by high cost of R&D if not big pharma? I seriously doubt that pharma lobby would be thrilled if costs of bringing new drugs to market suddenly fell by several orders of magnitude, so it's not going to happen.

You're putting the cart before the horse here. The reason why the other developed nations get cheaper access to to medicine is because of collective bargaining from more organized insurance schemes (e.g. single payer), or because of price capping by governments. Not 'because' the US subsidizes R&D through high prices. The US pays high prices because it chooses as system in which that's acceptable, and the pharmaceutical companies design their own pricing around it.

If the US stopped the madness, the companies would rebalance their pricing systems. If what you say is true, maybe every other developed nation would have to pay more.

I'm skeptical of this entire theory, however. It's not like major pharmaceutical companies just barely breaking even, and are selling their products at a loss in Europe. There is a lot of room for profit margins to be squeezed.

I’ve seen this claim made a few times.

If this is true then surely it would be in the US’s interest to stop doing it! Stop us freeloaders from mooching off your drug development!

Personally I’m doubtful that this claim is broadly true though. I think it should at least be backed by some decent analysis.

Idk why any politicians arent picking up on foreign price controls as a means of lowering costs in the US. It should be a part of the discussion during any trade talks with Europe.

How on earth would that happen? It will just be as expensive in Europe as in the US.

You really think that nobody outside the US are making drugs? Like no drugs are ever developed in Europe??

> It will just be as expensive in Europe as in the US.

Cost can be shared among the US and Europe populations. So per user cost would come down by a lot.

The problem is chemistry isn’t that different from software. Once you publish the idea it isn’t too difficult to derive the chemical composition. Replication is the easy part. Design and testing cost money.

So in essence we’d have to design drugs and not publish the chemistry which would be uncovered soon enough anyways. This leads to a situation where investment dollars go into other things and human health suffers, especially with so-called rare diseases.

Not to mention the USA loses hegemony. The USA provides Europe with a great deal of military technology and protection as well as medicine but it isn’t for free. The EU exchanges agency in many ways important strategically to American interests. It’s mainly a fair deal.

What you're literally saying is: instead of ending predatory pricing, enforce it for the rest of the world.

Here's a novel idea: cut military spending in half, and you can provide all the free medicine to all Americans for the rest of their lives. All the while making the world a safer place.

Are you aware that the US government already spends far more on health care than it does on the military?

Half the US defense budget is no where near the amount spent on healthcare in the private sector.

I wasn't, so I went and looked it up and you were right from what I found -

Healthcare:

The federal government spent nearly $1.2 trillion in fiscal year 2019. In addition, income tax expenditures for health care totaled $234 billion.

https://www.taxpolicycenter.org/briefing-book/how-much-does-...

Defense:

Defense spending amounted to $714 billion in FY 2020—and is expected to increase to $733 billion in FY 2021.

https://www.gao.gov/products/gao-21-415t

> Defense spending amounted to $714 billion in FY 2020—and is expected to increase to $733 billion in FY 2021.

A soldier whose leg was blown up in Afghanistan and is still in a hospital - is not part of that $714-733 billion. So the US military budget is only that low if your definition of "defense" spending does not cover that.

The reality is the US spends over one trillion a year in military spending.

Your own link says as much. It puts "Veteran's medical care" under the health care entitlement side of the equation, as opposed to the military spending side of the equation.

> A soldier whose leg was blown up in Afghanistan and is still in a hospital - is not part of that $714-733 billion.

Where are you getting that? From here https://fas.org/sgp/crs/natsec/IF11442.pdf and the link in the comment you responded to it seems that it is only about 80 billion.

Even if you add that to the 700 billion figure for the military, and add 200 billion for the entire VA, Medicare and Medicade alone account for well over a trillion dollars, and that’s not even the majority of healthcare expenses in the US.

>Medicare and Medicade alone account for well over a trillion dollars,

damn, right again. That sure is a mind blowing situation the U.S is in.

https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...

Medicare spending grew 6.7% to $799.4 billion in 2019, or 21 percent of total NHE.

Medicaid spending grew 2.9% to $613.5 billion in 2019, or 16 percent of total NHE.

>A soldier whose leg was blown up in Afghanistan and is still in a hospital - is not part of that $714-733 billion.

first off I thought it was clear from my comment that I had not believed the original comment that healthcare was greater than defense spending, but some initial investigation seems to confirm it.

The reason that I had not believed it was that I thought there was an ideological axe to grind behind the statement, so I was surprised.

It seems to me that you maybe are thinking the same thing about me, that is to say I have an ideological axe to grind proving that U.S defense spending is not that high. If so a quick examination of my posting history and the posts here should dissuade you of this.

As far as your argument - I agree the medical costs of the soldier still in the hospital should probably be counted in defense costs somehow but not sure how you would do it as I do not believe a veteran out in the job market working 9-5 and going to the VA for some medical costs should be counted as defense spending. Thus I don't think it is possible to just move all the costs of the VA over and get any fairer an accounting than one has now.

although I guess it is true the U.S could cut defense spending less than in half and pay 234 billion for everyone, so the original comment isn't totally off.

That’s not accounting private insurance, which is more than a trillion per year[1]

[1] https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...

thanks! didn't know that.

> Are you aware that the US government already spends far more on health care than it does on the military

At least 34% of that is spent on admin alone: https://time.com/5759972/health-care-administrative-costs/ and most of that is on privately insurers overhead.

> Half the US defense budget is no where near the amount spent on healthcare in the private sector

It would be way more than enough if there was some political will behind it.

> and most of that is on privately insurers overhead.

It’s true that the plurality of healthcare costs are private insurance, but medicare and medicade combine to a little less than twice the entire defense budget.

The US government could cut significantly into the out of pocket expenses if they halved the defense budget. This link is interesting: https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...

I always assumed a fairly significant chunk of that research is to find minor modifications to existing drugs in order to maintain patents that are about to expire. It certainly feels like that happens a lot.

Do you have any data to back up that claim? Traditionally US pharma has had lower R&D budgets than their international competitors.

I wonder why we don't fund drug development directly, using tax money and then let companies produce the drugs for a reasonable fee. I feel like drug development shouldn't be prioritized by the estimated amount of profit one can get from the drug.

Is there reason to think that government bureaucrats would do a better job at efficient resource allocation? I expect they would channel funding based on politics with little regard for outcomes.

> Is there reason to think that government bureaucrats would do a better job at efficient resource allocation?

Yes. Government institutions (academia, DARPA, CERN, etc.) created the original internet!

And then companies messed it up.

Is there a reason to think that government bureaucrats would do a worse job? I mean, generally I trust the government to run things like building roads, or taking care of security and education reasonably well. At least as well as a private organization would.

"Efficient" resource allocation strongly depends on your performance measure. I don't think that "maximize shareholder value" is necessarily the best measure to use for healthcare.

> This one is particularly prickly because the high cost paid in the US funds medical R&D

Most of those money goes on marketing.

Moreover, I think that US citizens did not signed up to pay medical R&D for whole world while they are sick. In fact, US citizens tend to have issues with paying researcher, social support and so on from their money.

R&D paid from taxes or insurance makes way more sense then paid by those who already deal with health crisis.

That does not compute though. If prices are lowered, sales volumes will go up because people (and insurance companies) can afford it. I'm no economic, but we've seen time and time again that lowering prices boosts volume sold to the point where eventual profit is much higher.

I mean the government can pitch in via subsidies for medicine R&D if it's really necessary, but honestly the pharma companies are swimming in money, they can afford to funnel money into R&D and pay their taxes instead of pushing it upwards to shareholders and foreign bank accounts.

> I'm no economic, but we've seen time and time again that lowering prices boosts volume sold to the point where eventual profit is much higher.

The current system has whoever can afford it pay the high price, whoever can afford less pay a lower price, and whoever can’t pay anything doesn’t pay anything.

Lowering drug costs won’t change the number of people taking drugs. That already based on need. All that changes is the amount of total profits.

The only politically and morally acceptable answer for this is to raise the price of drug costs globally to soften the change in profits.

Amusingly I would have expected the opposite in terms of what people find acceptable. Trying to charge say $200 for HIV medication to subsistence farmers in Sudan would be viewed as unconscionable.

In a period of unemployment I found that my medications basically operated on the afford less lower price - they gave coupons usable without insurance to far more reasonable prices. I can see clear brand promption and price discrimination here - they don't want to surrender market mindshare and brand name recognition by giving up the low end or their margins by cutting the cost across the board. So they give discounts that usually only the low end could or would take. Ironically such slightly sleazy behavior fits with one hypocratic oath vow to only charge what was within their ability to pay.

Or course "globally" probably means more charge other first world nations so it would be more "splitting the check among coworkers" than "demand the penniless man in the breadline pay a dollar". Still a position I expect to be US popular only.

As far as I can tell drug prices are driven by mainly one thing, realpolitik. Hepatitis C cures are targetted based upon organ transplant costs because that is the only alternative so it still helps but they make huge profits as say $75k drug treatments are still a big improvement over $150k of transplant costs. Unified blocs can twist arms to a certain degree, tiny blocs pay more for reasons beyond just spikey risk pools and meta-insurance, and companies will accept lower profits from some sales if it helps maintain higher profit sales.

That is a common talking point, but I don't know of any data actually backing that up. It just sounds nice like "they hate freedom". No, nobody does, try again.

Would you know of the data if it existed? Absence of evidence is a low bar for disbelieving a proposition.

I've heard of this argument before but I think it really needs some evidence. Is there a study that corroborates this claim?

Even if the US really "subsidizes" medicine for the rest of the world, what motives do pharmas have to sell medicine at lower-than-production/R&D-cost to the rest of the world? Couldn't they just sell to the US exclusively, let the rest of the world rot, and then sit on a bigger pile of cash as a result?

I was under the impression a large amount of medical R&D is paid for by taxes and done by university students. We pay for it and private industry benefits.

We're also funding massive advertisement campaigns, those can simply go away with a couple Thanos-like snaps as far as I care.

There is zero need to advertise drugs to potential patients which need a doctors prescription.

The rising price of Insulin is not funding the R&D of new drugs.

I’ve been a fan of increasing tax credits for medical R&D in exchange for price limits along, or simply, with a limit on the ratio a drug can be sold domestically versus overseas.

This is an unfortunate moral hazard due to the petrodollar.

Not necessarily - look at Valeant Pharmaceuticals.

They bought smaller Pharma co's, gutted R&D, and jacked up prices of the medications they sold.

“Imposing price controls” !? Couldn’t the company just not sell at that price… it is obviously still profitable to them.

Except these companies spend more on marketing than rnd.

> This one is particularly prickly because the high cost paid in the US funds medical R&D and extremely expensive clinical trials

This is what pharma wants you to believe because it's a positive spin on their pricing. I suggest watching Rep. Porter grilling these pharma CEOs if you want to understand the true costs:

* https://www.youtube.com/watch?v=wpdhD4ZLBxc

* https://www.youtube.com/watch?v=n0L0XbnvJ6I

TLDR: marketing alone outweighs R&D investment, and stock buybacks often account for more than both combined.

are the clinical trials more expensive in the US than anywhere else??

Maybe that's part of the reason medicines cost multiple times more?

For vaccines, most major countries want trials repeated with their local population before approving them.

Ironically, in the US, many/most(?) core-science phds and post-docs are immigrants who are used as "cheap labor". For double irony, they're often from countries that have price controls on pharma/biotech products.

Then why is every covid vaccine ouside the US, if other countries are "free-riding" the US R&D?

Is that a thing? Any source on that?

It was one of the parents comment, that every other country is doing that.

Ofc bs...

If American drug makers fired all the young ladies whose job is to bring coffee and donuts to your internist's office, and they stopped sending your internist away for golf weekends to learn more about why they should be prescribing Rosuvamax instead of Crestulon, I think they could probably bring costs in line with those in other countries...

Reply on news.ycombinator.com