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Comment by nemo44x | Hacker News Reader

What needs to happen is more and more money has to go to pharma from tax payers for novel medicine research. Today there is some, yes. But the vast majority of money comes from the markets. And anyone that has invested across the bio sector knows it’s capital intensive and almost everything fails. Money is just burned through so quickly.

So yes with lower returns investors will look elsewhere. Especially since overall pharma doesn’t really outperform. There’s no alpha across the sector.

So the money has to come from somewhere. If not then yes, innovation will slow down.

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To add to your point about expensive failures, this weekend it was announced that Tome Biosciences is going belly up. This is only a few years after being founded on some very promising research out of MIT. That’s $213M in investor money gone.

https://www.statnews.com/2024/08/22/tome-biosciences-gene-ed...

There's a problem with this line of thinking: the rest of the world already pays the same medicines less.

You’re not serious, are you? The USA consumer subsidizes everyone else in many cases. Similarly to how the USA taxpayer subsidizes the protection of trade, supply lines, and logistics through her mighty military.

Just compare the small and mid cap bio market of the USA to the rest of the world. These are the companies that get acquired by the large caps once they’ve gone through a P1 or P2 successfully. But most die before acquisition. This is where the real work happens in most cases.

The rest of the world has governments that negotiate directly the Pharma companies and strike up deals that subsidize the first X doses per year per Y number of people. Once the limit is passed it's the same for everyone - pay the price or find an alternative. NB that this doesn't happen only with US companies, e.g. Roche is very profitable selling Million-dollar-per-course cancer treatments. But in general, the fact that Pharma companies can sell at "full price" in the US subsidizes the drugs for the rest of the world.

The problem here is the idea that medicines have a particular price.

In reality you have a very big bill for developing it. A substantial bill for tooling up to actually be able to produce it. And typically a small bill for each unit you produce.

Now, I would like to see the developed world all pay the same price. But it wouldn't end up being the UHC-negotiated rates. I actually consider negotiation (or this dictate pretending to be negotiation) a bad thing. Instead:

You must sell to the US market at a rate no greater than you sell to any developed country. This is measured as net $ vs doses. No playing games with rebates, no playing games with giving them some for free. Reciprocity is encouraged, make the playing field level.

The US would benefit, the rest of the developed world would be screaming bloody murder.

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