The Public Shouldn’t Pay for Drugs Twice
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Govt funds the risky research, and then hands the baton to competitive industry, which is good at 'finding markets', making it a product, and optimizing costs.
Eg, google, amazon, etc, would not exist without the govt early (and continuing) funding of the tech their business is based on.
What is then supposed to happen is that profits are taxed sufficiently, feeding back in to the system, but that part appears to have broken down lately.
The problem in the US isn’t that we don’t tax Google, Amazon, etc. Look at the corporate taxes in France or Sweden. They’re about the same. The problem is that we don’t sufficiently tax the billions in payroll at those companies.
I guess I look at the CEOs who take a symbolic $1 salary-- they're reliant on either selling their plumped securities and other assets (at a low capital-gains tax rate) or borrowing against them (at zero tax rate) to actually cash out living expenses.
The right answer is to just nationalize profitable industries and use them as direct revenue streams. This eliminates much of the need for a formal tax-assessment (return processing, auditing, etc.) system, creating an immediate user-experience improvement and streamlining, and cuts out a lot of the opportunities to cheat. It's not like you can use creative accounting to boost your gas mileage (and reduce your spend at a state-run oil company). Not to mention the huge opportunities to manage for social/political aims (i. e. a state-run telecom will probably honour build-out commitments better than Verizon, because their jobs are all directly accountable to angry legislators)
Yes the problem is the payroll. Silicon Valley people engineers making $500k/year are the most under-taxed people in the country compared to European nations. Our corporate or capital gains taxes are unexceptional. It’s our taxes on the upper middle class—which haven’t been raised since Reagan-that are unusual. These people are the backbone of the tax base funding the welfare state in other countries.
The government isn’t short on money.
Are we sure that the problem isn’t that we are spending Elon Musk’s entire lifetime net worth on the military each and every 90 days while not even at war? We shovel twenty tons of hundred dollar bills (about $2bn) into the neverending pit of the war machine every day.
I’m not convinced more government revenue is the solution to any problems, given what they are doing with their current insanely large levels of revenue at present.
It surely is. The federal government ran a $880 billion deficit in 2018.
> Are we sure that the problem isn’t that we are spending Elon Musk’s entire lifetime net worth on the military each and every 90 days while not even at war?
Yes, definitely. Total government spending at all levels (federal + state + local) is about $7 trillion. The military budget is only 1/10 of that. If we cut our defense spending to the NATO 2% of GDP target, we would save only about $300 billion. We need to cut twice that just to close the structural deficit, and raise taxes by about another trillion to pay for universal healthcare.
You do realise the government is supposed to run a deficit, right? That's quite literally where money comes from.
You can make the case that it's too big ... and it is, but it should run a deficit.
Moreover, most money is not created by the government printing money, it's created by federal reserve purchases of debt or bank lending. Neither of those are reflected in the deficit. The prior poster is thus incorrect to say that the government "needs" to run a budget deficit "because that's where money comes form."
How do you figure? Tax revenues are basically at all time high, and going up further.
Consider that 40% of US GDP now is collected in some form of taxation.[1] 40 cents of every dollar earned is taxed and spent as the government chooses. This is more than between FDR and Regan, and much more than the 20s (~15% of GDP)
Also consider that size of the pie has also increased! US real GDP per capita (accounting for inflation) has grown ~4x since the 1940s, and total GDP has grown ~20x! [2]
https://upload.wikimedia.org/wikipedia/commons/3/37/Federal%...
right. with the right accounting processes, i could buy the rest. but when spending and tax collection are as decoupled or loosely balanced as they appear to be today, public investment into private industry is super risky.
The claim "By one estimate, the National Institutes of Health spent $17 billion on vaccine technologies fundamental to the Covid-19 vaccine." goes back to the mid-20th Century, is so broad as to be useless and is obviously disqualifying propaganda: https://medicalxpress.com/news/2021-04-covid-vaccine-built-b...
I think a more interesting comparison would be all national funding for drug R&D versus all corporate R&D funding. This could be done on an annual basis or historic.
NIH budget was 43 billion in 2021 for all healthcare sectors
Top 10 US Drug company[1] R&D budgets [2] were:
1: Johnson & Johnson $15 Billion
2: Pfizer $14 Billion
3: Merck $13 Billion
4: AbbVie $7 Billion
5: Bristol $11 Billion
6: Abbott $3 Billion
7: Amgen $5 Billion
8: Gilead $5 Billion
9: Eli Lilly $7 Billion
10: Biogen 2.5 Billion
Total 91+ Billion
Keep in mind that those are only US headquartered drug companies, and some of the biggest players like Roche and Novartis are in Europe[3]
https://www.pharmapproach.com/top-10-pharmaceutical-companie...
https://www.macrotrends.net/stocks/charts/JNJ/johnson-johnso...
https://www.fiercebiotech.com/special-reports/top-10-pharma-...
Moderna? The research startup that had only recently IPO'd and didn't have a single commercial product before covid? Seems weird to call it a "big pharmaceutical company".
I'd rather a few founders become billionaires from a successful startup than have Moderna gone bankrupt and lose the vaccines they were developing forever.
Didn't work for whom?
To suggest that political changes happen due to "it didn't work" seems like a pretty shallow conclusion. There are a lot that can be said about the last decades of free-market privatization & reforms in Europe, and in Sweden in particular, but that it was done out of necessity rather than a general political shift after the collapse of the Soviet Union is simply a biased take.
Everyone from voting public in liberal democracies (Sweden, Canada, Germany), to the voting public in less liberal democracies (India), the Islamic world (Egypt), to communist regimes (China, Vietnam).
In Sweden it's glaringly obvious that the privatizations have provided worse outcomes than before - even the free-market think-tanks are smart to avoid that subject. Unfortunately for us, they instead tend to focus on supporting voices that blame immigration for the consequences of sky-rocketing inequality. I guess they'll have to wait another decade or so before the myth building of the inherently incompetent state is on more fertile ground.
Maybe voters in Sweden and voters in India and party functionaries in China all just got some “right wing”virus at the same time. Or maybe they were reaction to the unworkability of an economic system they had tried. You know what they say: those who don’t understand history are doomed to repeat it.
You talk about incentives? The amount of money that has been concentrated to the wealthiest portions of society is simply staggering, even in superficially equal countries like Sweden. The privatization of state-owned industry, properties, and the welfare system has been an unprecedented goldmine for private interests. Essentially a smaller Scandinavian version of a post-USSR wealth transfer. The incentives for people in power in less democratic and/or corrupt countries is even more obvious.
The virus was the global shock-wave due to the collapse of soviet-Union? Come on. It was not like the shift to third-way social-democracy was a grassroots movement. Party politics is more fluid than voting patterns. A sentiment of "It's new times now, we need to go along with the flow" (not that dissimilar to today's politicians accepting the gig-economy, but that's another topic), rather than "we can clearly see that state-owned industry just isn't working, we have no choice but to try something new". If it actually was the latter, it would've be repeated by right-wing representatives on every political debate since the 1990, but that hasn't happened.
I'll leave it there, I think I've gotten my point across.
And pray tell, how did that happen? How do people come into power in Sweden? I thought that it has a system where people propose what they will do, and the population votes on whose ideas and proposals they like the most, doesn't it?
Nobody is “paying twice.” Folks on HN should understand this intuitively. Nobody thinks that angel or series A investment entitles you to 100% of a company and right to get the products for free.
if a drug were to be profitably sold to someone else for 20% of the price i’m paying for it, then wouldn’t i feel taken advantage of (more than i already am) when i’m denied access to that better price?
i’m not saying means tested benefits are (or aren’t) all bad: just that in most places we use them it’s to enable transactions that very directly could not be profitable. a person buying food with foodstamps isn’t themselves paying the producer a profitable sum: each stamp has a direct “cost” that gets socialized, so it’s reasonable to believe that somebody well-off shouldn’t be eligible for them. but when the transaction is profitable at both price X and price 5X, the case to be made for why everyone shouldn’t be permitted that price of X is just a lot harder to explain.
So please, can the public ... well ... pay for drugs once?
If only! Healthcare is somehow not a good or service one should pay for as a normal transaction.