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Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

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Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#61

Post by maxerickson »

FireBeyond wrote: post #57
maxerickson wrote: post #45

Earlier quoted context omitted.

They market drugs in the US though. (I don't think the 'the US bears the burden' argument is especially compelling, I'm just saying that the country where a business is located doesn't reveal where it gets revenue)

Right, and that's really what I'm getting at. The only country in the world (except maybe NZ, who was in the process of phasing it out, and only allowed it as part of a trade deal with the US) where Rx meds are advertised to consumers. Even with marketing spends of 20-25% of revenue, and R&D spends of 10% (and profit margins of typically 20%+), pharma has still managed to convince many Americans that they are struggl…

By "market", I meant selling them, not just advertising.

A Swiss company can get revenue from the US just as well as a US company. The location of their research lab won't reveal where they make their profits.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#62

Post by klodolph »

dethswatch wrote: post #14
StClaire wrote: post #7

It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. But they don't just price gouge. Drug companies need to file patents on their drug almost as soon as they sketch they come up with drug. From there they need at least 8 years to get through the FDAs approval process, so the manufacturers don't get nearly as much exclusive time with their IP as other industries. (Th…

>It costs a quarter to manufacture each pill but the >manufacturers charge several dollars for that pill. What are the manufacturing costs for software?

The point of the parent comment was that this was not just an issue of manufacturing costs. Cutting off the quote before the "but" changes the whole meaning.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#63

Post by klodolph »

drzaiusapelord wrote: post #20
StClaire wrote: post #7

It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. But they don't just price gouge. Drug companies need to file patents on their drug almost as soon as they sketch they come up with drug. From there they need at least 8 years to get through the FDAs approval process, so the manufacturers don't get nearly as much exclusive time with their IP as other industries. (Th…

Martin Shkreli gouged on off-patent medicine. Pretending patents are the problem is short sighted. >It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. Is Trump writing checks to pay for R&D, salaries, etc? Of course they cost more than are to manufacture, that's the basics of business. Unless we move to a heavily regulated single-payer system then these problems wi…

Martin Shkreli gouged to drive down the company's stock price. The problem with Shkreli had everything to do with market manipulation and almost nothing to do with drugs in particular.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#64

Post by cmdrfred »

FireBeyond wrote: post #58
jedberg wrote: post #55

Earlier quoted context omitted.

Yeah but those companies sell their drugs for a lot more in the US than elsewhere. Basically, because the US is wealthy and much less regulated, drug companies from around the world make up a lot of their costs by selling things for more here, especially since private insurers have to pick up the tab in most cases.

When a quarter of their revenue goes on sales and marketing that is pretty subjectively "unnecessary" I don't they can claim with a straight face that it's "subsidizing the world". Especially when they're already making $14B a year in profit, in J&J's case.

Also if the risk is so high why are drug companies so profitable over the long term? Pharma firms are head and shoulders the most profitable firms in the S&P 500 every single year.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#65

Post by eh78ssxv2f »

cmdrfred wrote: post #60
StClaire wrote: post #44

Earlier quoted context omitted.

Generic manufacturers don't spend money on R&D

Yes they do. They have to prove that their version of the drug works in the same manner as the original via clinical trials.

But do they invent the right medicine formula for the disease?

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#66

Post by baddox »

dethswatch wrote: post #14
StClaire wrote: post #7

It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. But they don't just price gouge. Drug companies need to file patents on their drug almost as soon as they sketch they come up with drug. From there they need at least 8 years to get through the FDAs approval process, so the manufacturers don't get nearly as much exclusive time with their IP as other industries. (Th…

>It costs a quarter to manufacture each pill but the >manufacturers charge several dollars for that pill. What are the manufacturing costs for software?

Do I get consistency points for being against all intellectual property protection laws?

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#67

Post by makmanalp »

protomyth wrote: post #53

If the government really wanted to lower the price of drugs it would pay for the FDA clinical trials[1] and lengthen the amount of time a drug company can collect royalties. I remember when I was at a place that did clinical trials the cost of one protocol was $50,000 a day because of all the test kits that needed to have lab work done each day and the drug company only really had 3 years to get back its investment (…

I understand the idea of the government paying for clinical trials, but then doesn't that incentivize pharma companies throwing stuff on the wall and seeing what sticks, and basically wasting money on trials that they know are long shots? I think the trial costs belonging to the company is right.

Anyway, regardless, what if pharma was only slightly or moderately profitable instead of insanely profitable? I don't want to be snarky, but the "we're not doing it unless it makes us a very big bag of cash" model of business just seems counter to the idea that having access to good healthcare is a basic human right. This is what makes me want to just create a whole DARPA + universities + national labs sort of system that takes on a lot of that responsibility of developing and testing drugs that is driven by more than just profit.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#68

Post by cmdrfred »

eh78ssxv2f wrote: post #65
cmdrfred wrote: post #60

Earlier quoted context omitted.

Yes they do. They have to prove that their version of the drug works in the same manner as the original via clinical trials.

But do they invent the right medicine formula for the disease?

Public universities have done that for most of the significant discoveries in the past few decades.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#69

Post by kgwgk »

FireBeyond wrote: post #37
lukasm wrote: post #22

Earlier quoted context omitted.

In UK government has almost a monopoly for buying drugs, so they have a leverage in negotiation and there is a lower overhead with paper work. Americans subsidize drugs for the rest of the world.

Yeah. That's not so accurate. Top 10 pharma companies, 5/10 are US (2 UK, 2 Swiss, 1 French). 4 of the top 6 for profit margins (from 43%(!) to 19%) are US (Merck is the only outlier, 9th, at 10%). 4 of the top 5 for Sales and Marketing Spend (both on raw dollars and as a percentage of revenue) are US. 3 of the bottom 5 for R&D spend (as a percentage of revenue) are US. I think I see a little fat that can be trimmed…

For all those companies the largest and more profitable market is the US, the country of domicile doesn't have much relevance for this discussion.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#70

Post by akiselev »

maxerickson wrote: post #41
StClaire wrote: post #7

It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. But they don't just price gouge. Drug companies need to file patents on their drug almost as soon as they sketch they come up with drug. From there they need at least 8 years to get through the FDAs approval process, so the manufacturers don't get nearly as much exclusive time with their IP as other industries. (Th…

Single doses of many cancer treatments cost $10,000 or more. That's where the spending is concentrated, not in daily maintenance meds that cost a buck or two.

Do you have data to back this up? Cancer treatments cost a lot per dose because they usually have relatively tiny markets (in any given year), are some of the most complex to develop, and treat an acute disease without the potential for long term customers. Also, much of the cost of cancer treatment is the cost of complications, clinical face time, and end-of-life care, not the drugs.

If I remember correctly, the average number of prescriptions for someone aged 65-79 is about four times the national average and since they treat chronic conditions due to aging, people take them until the day they die. Since Medicare isn't allowed to negotiate bulk prices for the prescriptions, the pharmaceutical companies pretty much get to charge whatever they want for critical drugs.

Just one of my 80 year old neighbors heart medications costs >$3000 per month and she's been taking it for almost 20 years, along with half a dozen other drugs. Cancer pills may cost a lot but the sheer scale of our aging population is much more relevant to overall healthcare costs.

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