Goodspeed wrote:You've mentioned drug prices a few times. I'd need to do more research on each individual case before commenting, though I can safely rule out that prices are chosen just to be mean.
I think this is the core of your delusion. No, pharma companies won't increase prices just to be mean but they will do it to make more money. The phenomenon is and has been widespread. Your "free market solutions" aren't working for a very simple reason: the best business decision if you have a patent on a drug that has no alternatives and patients rely on this drug to stay alive is to increase the price 1000%. Inelastic demand, they call this. Companies have actually increased prices a whole lot more than that in the past. Look up Valeant.
As a result, insurers will face higher costs and will increase the premiums. Ultimately, the people who actually need the medicine are the ones paying more, insured or no. And a lot of people simply can't afford it.
That's why you need government regulation in pharma. Nobody needs to spend 5000 words discussing metrics. It's a discussion of simple economics.
But, Goodspeed, the reason drugs are priced lower in other countries, is exactly because they're priced higher in the US. It's all due to that greedy, for-profit free market system, which causes Americans to subsidize the rest of the world, without which health care innovations wouldn't be developed at all.
Drug research and development is extremely expensive and time-consuming, and patents last 10-20 years at most. They
have to price the drugs at significantly above cost, just to get a little return on their investment. The alternative is that the drugs
aren't developed at all. Would you rather pay $300 and stay alive or pay nothing and die?
America has 5% of the population but invents 50-60% of new drugs, particularly "miracle cures." Europe's output is proportionally small. Most health care innovations are developed, tested, and adopted on a wide scale first in the US, and then exported to the rest of the world.
Ninety five percent of the new drugs coming on the market are developed for sale in the United States. They are paid for by American consumers, while other countries, such as Canada, Germany and France, free ride at our expense. The United States is the last major country that allows the market to set prices high enough to compensate pharmaceutical companies for their R&D investments...
The negative media pharmaceutical narrative reminds me of the boy who visited a museum noted for its dinosaurs, who afterwards could only talk about the teensy-weensy insect he saw in a glass case. Little details caused him to miss the dinosaur. The same lesson applies to the pharmaceutical industry – or “Big Pharma” as its critics call it. Yes, pharmaceutical companies do develop “me-too” drugs, use human subjects from the third world (Do you want to volunteer?), may cajole family physicians to prescribe drugs we do not need, and picture tranquil sleep, unobstructed breathing, and reliable erections in their TV spots. But these images of “Big Pharma” are the equivalent of the tiny insect that fascinates the boy who fails to notice the dinosaurs.
The “dinosaur” that we rarely hear about are the drugs that have improved, prolonged, and changed our lives. When President Eisenhower suffered a massive heart attack in September of 1955, his doctors could only inject a pain killer and prescribe bed rest. When Vice President Cheney suffered heart attacks almost a half century later, he was given powerful blood thinners, a stent was inserted, and he was released from the hospital shortly thereafter. Before acid inhibitors, ulcer sufferers had only operations that cut off ulcerated portions of their stomachs. Before AZT drugs, an HIV positive test was a death sentence. tPA saved millions of heart attack and stroke victims. HPV is an effective vaccination against cervical cancer. Anti-psychotic medications allow patients with schizophrenia to live productive lives. Viagra saved millions of men the shame of sexual dysfunction, and probably rescued thousands of marriages. The list goes on and on, but, in the future, it might get shorter and shorter.
According to the Britannica Encyclopedia, a new drug requires that 5,000–10,000 chemical compounds undergo laboratory screening for each new drug approved for use in humans. Of the 5,000–10,000 compounds that are screened, approximately 250 will enter preclinical testing, and 5 will enter clinical testing. The process from discovery to marketing takes 10 to 15 years, and only one out of every ten thousand discovered compounds gains approval. Although pharmaceutical companies routinely claim that new drugs cost an average of a billion dollars, the true figure is between $4 and $12 billion when the costs of failures are included.
Pharmaceutical companies finance new product development by devoting a higher percentage of their revenues than any other major industry (an astronomical 20 percent) to R&D. It is the American consumer who pays these costs by buying the new drugs at prices that cover these R&D expenses. Free-riding Canadian, German, French and Dutch consumers buy at much lower prices and avoid contributing to the costs of product development. China, Russia, India and most of the developing world ignore intellectual property rights and knock off the drugs for sale in domestic markets with no compensation to the developer.
In the United States, by and large, the market still sets prices of pharmaceuticals. In the United Kingdom, Canada, and Europe, the state either regulates prices or is the sole buyer, as studies by the AARP and the Senate Committee on Aging show. The Congressional Budget Office (CBO) finds that average prices for prescription drugs in the United States are 50 to 100 percent higher than in other industrialized nations, even though generic drugs sell for less. A single dosage of Nexium (the Purple Pill) sells for $4 in the United States and for under a dollar in France and Germany. According to OECD statistics, Americans spend $983 per capita on prescription drugs, including cheaper generics, while the Germans and French pay $680 and $634, respectively. Americans do not appear to be over medicated as Pharma’s critics charge. They just pay higher prices.
Without the hard-pressed American consumer to finance R&D costs, we would not have AZT, Cimetidine, Nexium, tPA, Beta blockers, new cancer drugs, anti psychotic drugs, and all the rest. American consumers pony up, while the rest of the world benefits without paying its share.
American consumer groups fail to understand this dynamic. If Canadians, Germans, French, and Dutch have low drug prices so should we, they naively think. Our politicians demand that we re-import our own drugs from Canada and Europe at their lower prices. Such a remedy may play well to populist emotions, but even Congress and AARP understand that we must consider, as one scholar puts it, “whether the benefits in terms of lower prices will be worth the cost in terms of lower innovation.” In other words, we must fear killing the goose that lays the golden eggs.
https://www.forbes.com/sites/paulroderi ... e016181c05http://life-sciences.blognotions.com/20 ... alization/