You can argue that it is wrong, but we in the US pick up the tab for the development costs of new drugs. Once the R&D is factored in to establish a US price, any other pricing can be set using a marginal cost basis. Therefore, the price can be set lower once it's out of the country because it can never be re-imported.

(04-17-2014 01:00 PM)Max Power Wrote:  We don't even know that it will add to the deficit at all, although I think it's likely to.

http://www.politifact.com/virginia/state...are-will-/

What would really lower costs would be to go to single payer. Let me know when you're on board.

The unions will never go for a single payer system. And since the unions were the biggest supporters of Obamacare, they would never support something that they know will decrease their benefits.

And since when Obama and the other Dems hear "union", they reflexively grabs their ankles, there will be no single payer.

That might be true to some extent depending on the markets and their comity with our patent laws, but it doesn't explain even the non-drug price differences. We pay far more for office visits, surgeries and our health care spending as a proportion of GDP is approx. half what other developed nations pay for health care.

Plenty of labor support for single payer.

http://www.laborforsinglepayer.org/

Quote:The Gottfried-Perkins Bill got a shot in the arm on February 17 when two large statewide unions-1199 SEIU and CWA District 1–and the Working Families Party announced their support on February 17. “The passage of Obamacare represented a huge advance in this country,” said CWA District 1 Political Director Bob Master, “but it is not enough.”

The Gottfried-Perkins Bill would establish New York Health: a publicly funded universal healthcare plan for all New Yorkers with no premiums, deductibles or co-pays. 73 out of 150 state assembly members have endorsed it. The Bill faces a more difficult path in the state senate where a small group of renegade Democrats have joined with the Republican minority to block progressive initiatives.

(04-17-2014 02:12 PM)Max Power Wrote:  Plenty of labor support for single payer.

http://www.laborforsinglepayer.org/

Quote:The Gottfried-Perkins Bill got a shot in the arm on February 17 when two large statewide unions-1199 SEIU and CWA District 1–and the Working Families Party announced their support on February 17. “The passage of Obamacare represented a huge advance in this country,” said CWA District 1 Political Director Bob Master, “but it is not enough.”

The Gottfried-Perkins Bill would establish New York Health: a publicly funded universal healthcare plan for all New Yorkers with no premiums, deductibles or co-pays. 73 out of 150 state assembly members have endorsed it. The Bill faces a more difficult path in the state senate where a small group of renegade Democrats have joined with the Republican minority to block progressive initiatives.

Look no further than Vermont



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(04-17-2014 02:06 PM)Max Power Wrote:  That might be true to some extent depending on the markets and their comity with our patent laws, but it doesn't explain even the non-drug price differences. We pay far more for office visits, surgeries and our health care spending as a proportion of GDP is approx. half what other developed nations pay for health care.

That chart is misleading. Physicians have a "standard rate" which they would charge the odd patient who has no insurance. But most docs negotiate the actual reimbursement with the insurance companies or Medicare/Medicaid. This is most often far less.

Here's an actual example. I had a primary care visit in February for which the doc had a standard fee of $220. But my insurer, a Blue, paid $24.48. Add that to my $15 co-pay, and the real cost was $39.48, basically in-line with the other countries.

As an analogy, nobody ever pays full price for a suit at Jos A Bank.

Yeah, that's why they included percentiles. Even the 25th percentile is double the 50th percentile of the next highest country.

Anyway, how is the chart misleading? It's what Americans are paying. It is what it says it is. The fact it's saving you some money to have insurance is great... for the people fortunate enough to be in your situation. The difference between the cost of office visits and Jos A Bank is that some people really are paying full price for the former.

In the aggregate, we're getting ripped off, and it's not healthy for our economy.

(04-17-2014 01:33 PM)Max Power Wrote:  Other governments seem to use cost controls just fine, and the end result is we pay 10 times what people in Britain do for a Nexium.

But this is a somewhat misleading superficial analysis that ignores the real problem. The reason other countries are cheaper is because their cost controls do not allow for recovery of research and development costs. They allow recovery of the marginal cost of producing the next pill, and that's it. The pharmaceutical comanies will make and sell pills there, becuase they make a profit on the margin. But they don't get any meaningful contribution toward their sunk R&D costs. So the US market ends up absorbing all the R&D costs. What we need is a leader with the guts to make the rest of the world pony up and pay their fair share. If you try to go the other way, and reduce US prices to rest of the world prices, that's the end of pharmaceutical R&D. I don't think any of us want that. I suppose you could have some governmnet funded R&D. But given the government's track record picking winners and losers, I don't think any of us really want that either.

I agree it's a problem the rest of the world is free riding somewhat on our R&D. But a big part of that is there are real government agencies which are helping set the price of the drugs, meanwhile here in America it's illegal for our government to negotiate the prices on drugs even with Medicare. None of these companies would go out of business if we started doing what they do. Make a law requiring all drugs sold in the US to be as cheap as their cheapest legally sold price worldwide, and you'll see more equilibrium.

Edit: As for the part you added, the federal government is actually pretty good at subsidizing scientific research. And to be honest I would rather there be less R&D if the alternative is us getting screwed on behalf of other countries.

(04-17-2014 04:09 PM)Max Power Wrote:  I agree it's a problem the rest of the world is free riding somewhat on our R&D. But a big part of that is there are real government agencies which are helping set the price of the drugs, meanwhile here in America it's illegal for our government to negotiate the prices on drugs even with Medicare. None of these companies would go out of business if we started doing what they do. Make a law requiring all drugs sold in the US to be as cheap as their cheapest legally sold price worldwide, and you'll see more equilibrium.

Edit: As for the part you added, the federal government is actually pretty good at subsidizing scientific research. And to be honest I would rather there be less R&D if the alternative is us getting screwed on behalf of other countries.

You actually make some good points (I'm somewhat stunned).

But don't forget, the pharmaceutical companies have done more to prolong life, and provide a higher quality of life, than virtually any other group you could suggest. Ask any doctor that has been practicing for 40 years, what has helped the most, they'll tell you drugs.

Statins and other colesterol treating drugs, have drastically cut heart diseases. Diabetes is highly treatable. Even HIV is under control. Many cancers are now controlled by chemo.

We are far better off with these drugs than not. As a result, and although I think you have a valid point that is worthy of discussion, I'm OK with getting screwed on this one.

My problem with relying too much on private R&D is that Big Pharma generates the best profits off of treating disease, and not curing it. They'll make billions by giving you a Lipitor every day for the rest of your life to control your cholesterol, but if they ever stumbled onto something which would cut into those margins they might even go so far as to hide it. Most vaccines that cure diseases come out of the government funded research.

(04-17-2014 05:06 PM)Max Power Wrote:  My problem with relying too much on private R&D is that Big Pharma generates the best profits off of treating disease, and not curing it. They'll make billions by giving you a Lipitor every day for the rest of your life to control your cholesterol, but if they ever stumbled onto something which would cut into those margins they might even go so far as to hide it. Most vaccines that cure diseases come out of the government funded research.

That's a very good point. But I can think of a couple of discussion points.

1. No vaccines "cure" a disease. By definition, a vaccine protects one from getting the disease.

2. I don't know if your statement that "most vaccines...govt funded" is true. Neither do I know if it's not. I should do a little research but not that interested, so I won't.

3. Lipitor does "cure" heart disease, in the same sense as a vaccine. By taking the drug, you avoid the disease. Diabetes, on the other hand, requires insulin as a maintenance. So does HIV.

We need a pharmacist.

Max, I have a question for you.. were you one of those Democrats who BLASTED Bush for promoting the idea of getting pharamceuticals from Canada? (IT got shot down in the House, because the Pelosi-led Democrats went off on the "how safe are those medications"?).

It got ignored by most of the media, cause they were ripping into him for wanting to privatize part of Soc. Security, but the leadership of the Democrats RIPPED into Bush for that because "How can we be sure they're safe"?

Until we're allowed to import pharmaceuticals from other countries, (and the R&D costs) our prices will never be as low as theirs are.

Dont get me wrong, I'd be reluctant to get pharmaceuticals from other nations precisely because of R&D.. but if something is shown to work, why shouldnt' lower-income Americans be allowed to buy it cheaper elsewhere?

I think Max is just looking for a reason to hate Big Pharma. So no matter what, he'll construct some bogus argument about profits.

I, on the other hand, can happily say that my portfolio contains: Pfizer, Merck and Novartis, which have dividend yields in excess of 3% each. Go Big Pharma.

Max is an ambulance chaser. He makes a living by convincing a jury that some terrible greedy corporation screwed his client, and then stealing 40% of whatever his client gets.