The Family Making Billions from the Opioid Crisis

Try talking to a few doctors. They would love it if their patients took an active role in their own health.

In fact, I'd goes as far as saying relying 100% on your doctor for your health decisions is pretty stupid.

That's not the story I got from that study. At all.

* 58% of respondents "agreed strongly that DTC ads make the drugs seem better than they really are"

* 78% of physicians believed patients understood possible benefits, however, only 40% believe patients understood the risks involved.

* 75% of "physicians surveyed believed that DTC ads cause patients to think that the drug works better than it does"

* "physicians felt some pressure to prescribe something when patients mentioned DTC ads."

So, patients are getting more involved and asking questions, which is great, but they don't understand the risks involved, the patient misrepresents how well the drug is working for them, and the physician feels pressure to give them what they ask for.

That sort of bias is a problem, especially with on-going therapy. If a patient is being misled by DTC ads about how well they are being treated, they can't raise questions that would allow them to get even better treatment. If a physician is feeling pressured to give a drug when asked, they can't try other, sometimes more effective, therapies.

The doctor explaining the risks isn't working, because of the ad.

The DTC ads aren't completely useless, but they are harmful.

A patient is unable to understand that the drug is putting them at risk. 60% of people can't see their side-effects as side-effects. So dangerous side-effects like angina and depression take longer to diagnose, leaving the patient at-risk.

A patient is showing a placebo effect, so the doctor cannot tell how well the drug is working. That means, if it's a serious disease, they might be getting worse, but are unable to identify it, and for staged illnesses, that can mean more important treatment comes too late.

Remember, self-reporting is still the primary way we convey to doctors what's happening with us. If it can't be trusted to be accurate, the doctor can't be as effective as they need to be.

Buying Berkshire and running it as an investment vehicle clearly was a “profit seeking” decision, it also clearly wasn’t a profit maximization decision. The most mediocre hedge fund manager alive gets 2% of the fund a year for “expenses”, and 20% of the profits. Buffett obviously could have gotten the same, which would have doubled or tripled his current net worth.

If he had that perfectly standard money management arrangement, Buffett would have made $10B last year, and been able to shield it from taxes as long term capital gains. Instead he made $100,000 in salary, and paid regular taxes on it. The last 4 years alone a 2/20 profit share would have been worth close to $40B, nearly doubling his net worth just from those years, ignoring the profit share from the 40 years before that.

The reason Buffett chose Berkshire as a vehicle and doesn’t take his rightful fees from it, is he was already wealthy when he started with it. He had shutdown the Buffett Partnerships and briefly retired after making himself and his investors (a collection of mostly Omaha doctors and dentists) all multi-millionaires in only 13 years. When he decided to restart his friends and investors jumped in with him and he didn’t need or want to charge them fees. So every BRK shareholder since has gotten that glorious free ride.

The dividend tax rate is another spurious issue. Coke pays federal and state taxes on its profits, the pays most all of what’s left as dividends to its investors. Berkshire only pays around a 10% tax rate on those dividends, less than the 15-20% individual investors pay, but for good reason, because the corporate dividend tax is the first level of a DOUBLE taxation. If Buffett ever wants to pocket those Coke dividends, Berkshire has to pay them as dividends and shareholders would owe another 15% dividend tax rate on top and Buffett himself would have to pay 20% because he’s top bracket. That 10% is an extra tax Berkshire shareholders have to pay to own Coke thru Berkshire instead of directly.

This also shows how Berkshire’s tax structure is so inefficient. Even with the “discount” on dividend earnings, Berkshire paid over $7B in taxes last year on $33B in eanings. If he was still running an investment partnership, not only could he pay himself massive fees, but those fees would be considered “carried interest” and treated like long term capital gains, and only taxed when he sold shares, at low long term capital gains rates.

If insurance float is an interest free loan, in what world is it tax evasion? Taxes are owed on profits, not loans. And float is only interest free if you run your insurance companies exceptionally well. Ordinary insurers take a loss on float as a cost of doing business. But Buffett refuses to own insurers that are that crappy, and it’s the discipline of his insurance companies that makes Berkshire one of the rare insurers to have free float.

Lastly “crime” has a meaning, and you don’t get to redefine it as things you regard as “unethical”. Buffett has been investing very publicly for over 60 years with a total tally of zero crimes, and zero unethical acts. You may wish for some to maintain your silly desire that people can only be more successful than you by cheating and committing crimes, but they ain’t coming.

It can be. Does the average patient have a medical license, know of all the side effects...etc etc? NOPE. Ask questions of course but like buying frying pans you saw on a 4am infomercial with "Only 2 left, hurry!!!" demanding the meds you saw on tv is a bad idea.

Stats say that we're way over prescribed.