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Comment by nradov | Hacker News Reader

That is an example of what economists call the free rider problem. European countries get cheap drugs only because they are effectively being subsidized by Americans.

https://www.investopedia.com/terms/f/free_rider_problem.asp

Outcome differences are due more to public health and social factors like obesity. Expensive drugs or lack thereof have only a tiny impact at the population level.

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US pharma spends an outsized amount on sales and marketing, expenses that could be eliminated if public funding was spent directly on R&D.

Europeans aren’t free riding; they’re paying a reasonable rate for these goods while Americans are shouldered with extraction of revenue for pharma profits and those inefficient (and arguably unnecessary) sales and marketing expenses.

Only two countries in the world permit marketing directly to consumers to promote pharmaceuticals: the United States and New Zealand.

There is already a lot of public funding for basic biomedical research. Actual drug development is another thing entirely. If this were publicly funded then funding would be allocated based on political priorities rather than realistic scientific and economic assessments. That misallocation of resources would overwhelm any savings from reducing sales and marketing expenses.

But in general the traditional drug development approach of finding small molecule drugs to treat specific diseases is running out of steam. Most of the low-hanging fruit has already been picked.

A ban on marketing prescription-only drugs directly to the public existed in the US until recent decades. The amount spent on marketing skyrocketed when that ban was removed.

Since there's no way to reinstate the marketing ban short of a Constitutional amendment (basically impossible) that point is moot.

An outright ban would be very difficult now that the genie is out of the bottle. The FDA can regulate what goes in the ads, like requiring disclosure of the expected benefit, how prevalent some of those side effect them mention are, how common the condition it's meant for actually is, and of the list price of the medication. Many of these drugs are for rare conditions and the drugs, though approved, help a smaller percentage of patients than the ads portray and to a lesser extent.

It's not like profit motive is a great allocation method either though. There are massive perverse incentives to favor expensive ongoing treatments over cures or prevention.

But, because healthcare is public in NZ you wouldn't bother with the brand names as you'll have to pay for them (generics are funded by the taxpayer through Pharmac, which is the crown entity that is responsible for buying all publicly funded medication for NZ).

It's like Private hospitals, we have them, but very few people use them as the public system is better equipped and paid for by the tax payer.

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