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Comment by mlindner | Hacker News Reader

This discounts the fact that the vast amount of money spent on Medical practices is in the US which causes the advances here. Once the advances happen though they're global, so the US does not get the benefits from that money.

This "tragedy of the commons" with regards to medical science causes everyone to misattribute things. Europe for example can pay little money for their medical practices because of the US bankrolling the research and drug development that allows them to do so.

One route to fixing things in the US, if we really wish to do so, is to create by law a "most favored" status for the US such that if a US drug company sells outside the country, they must sell the drug in the US for the same price as the lowest price they sell it to any other country. This would largely fix our expensive healthcare, but would also harm the world heavily in advancement.

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I work in the drug development industry, its a shame this has been downvoted, it's largely true - at least for new drug innovation. The fact that routine procedures are expensive in the US is unrelated.

The US is ~35% of the global pharmaceutical industry, which is the topline driver of new drug development.

When the US pays top dollar for new drugs, it does effectively subsidize European access to the new research.

>Do you have any data to backup your claim?

I would suggest https://www.rand.org/pubs/research_briefs/RB9412.html

or the Great American Drug Deal, by Peter Kolchinsky.

> One route to fixing things in the US, if we really wish to do so, is to create by law a "most favored" status for the US such that if a US drug company sells outside the country, they must sell the drug in the US for the same price as the lowest price they sell it to any other country. This would largely fix our expensive healthcare, but would also harm the world heavily in advancement.

Then you'd end up bankrupting most healthcare and pharmaceutical companies, that is if most of them don't leave the country. If the current scenario is a "tragedy of the commons" a la Guns or Butter, then the US's domestic medical policy is the biggest contributor. A "most favored nation" policy as such just allows the government to pick winners and losers by creating a de facto price control. It's not a solution and would do more harm than good.

The ultimate reason why it's expensive to sell a drug in the United States is because the FDA makes it illegal to import competing drugs. The solution is to let the market determine the "real" prices.

> they must sell the drug in the US for the same price as the lowest price they sell it to any other country. This would largely fix our expensive healthcare, but would also harm the world heavily in advancement

Drug prices are far from the leading cause of the high cost of US healthcare.

The whole system is deeply dysfunctional with massive perverse incentives.

Do you have the numbers to back these claims? Is the extravagant money spend on healthcare in US actually drives everything ahead? Do countries like UK, Germany, Switzerland and Japan lag behind due to the smaller amounts spent?

No they don't lag behind, because as I mentioned, once they're developed the drugs are available globally, and often reverse engineered and re-sold by less scrupulous countries that don't care about intellectual property.

As to your first question, I don't have an answer for you off hand.

Okay, what are the sources of this claim? I'm kind of surprised that Germans and the British steal American technology developed though bankruptcy inducing childbirths.

edit: Hmm, if that's true then US must be actually behind because every now and then the UK or some Europeans might invent something but the Americans won't have it because they respect intellectual property. Which means Americans will have only American stuff but the Brits and the EU will have Europeans stuff too.

The claim is largely true for drug development, but not for routine procedures. Those are expensive for unrelated, and largely pathological, reasons.

Okay, can you provide some literature on that claim? Do you, by any chance refer to the European governments buying directly from the pharma companies, thus getting solid discount? Or is it the case that European companies simply copy the drugs and move on? If that's the case, is the US healthcare expensive because pharma companies need to make money from the US sales only?

https://www.rand.org/pubs/research_briefs/RB9412.html and The Great American Drug Deal, by Peter Kolchinsky. Specific claims:

- The US pays more for new drugs than the rest of the world

- The US contribution is disproportionate, and is major driver of the drug development industry.

-If the US paid less for new drugs, the entire industry would slow, and we would have fewer more effective treatments.

I don't believe that there is any research backing this.

Do you have any articles, papers etc from reputable sources to back this up? Or is this just personal speculation?

The claim is largely true for drug development, but not for routine procedures. Those are expensive for unrelated, and largely pathological, reasons.

I would suggest: https://www.rand.org/pubs/research_briefs/RB9412.html or The Great American Drug Deal, by Peter Kolchinsky.

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