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The Public Shouldn’t Pay for Drugs Twice

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Re: The Public Shouldn’t Pay for Drugs Twice

#11

Post by colinsane »

> Universities should stipulate in their technology transfer agreements that they would not use patents to prevent generic competition in places where the list price of the drug was unattainable based on average income

if a drug were to be profitably sold to someone else for 20% of the price i’m paying for it, then wouldn’t i feel taken advantage of (more than i already am) when i’m denied access to that better price?

i’m not saying means tested benefits are (or aren’t) all bad: just that in most places we use them it’s to enable transactions that very directly could not be profitable. a person buying food with foodstamps isn’t themselves paying the producer a profitable sum: each stamp has a direct “cost” that gets socialized, so it’s reasonable to believe that somebody well-off shouldn’t be eligible for them. but when the transaction is profitable at both price X and price 5X, the case to be made for why everyone shouldn’t be permitted that price of X is just a lot harder to explain.

Re: The Public Shouldn’t Pay for Drugs Twice

#12

Post by jleyank »

sanp wrote: post #8
nshepperd wrote: post #6

> put a spotlight on the big pharmaceutical companies that had brought them to market — especially Pfizer and Moderna Moderna? The research startup that had only recently IPO'd and didn't have a single commercial product before covid? Seems weird to call it a "big pharmaceutical company". I'd rather a few founders become billionaires from a successful startup than have Moderna gone bankrupt and lose the vaccines they…

This assumes that only pharma companies can execute the steps required to bring the fruits of all that research to market. There is no reason a govt entity can’t do the same. It is a question of setting up the right incentives for the employees of that govt entity.

I really doubt any western government could pull this off as either they or their population would balk at the cost if not the concept.

Re: The Public Shouldn’t Pay for Drugs Twice

#13

Post by rayiner »

This line of argument overlooks the vast amounts of investment that goes into commercialization after the basic research phase. A lot of the fundamental work on self-driving cars was funded by DARPA and was done at CMU, Stanford, etc. The DARPA Grand Challenge demonstrated working self driving cars back in 2004. But private industry has invested over $100 billion in commercialization since then. And we still aren’t close to a market-ready product.

Nobody is “paying twice.” Folks on HN should understand this intuitively. Nobody thinks that angel or series A investment entitles you to 100% of a company and right to get the products for free.

Re: The Public Shouldn’t Pay for Drugs Twice

#14

Post by rayiner »

sanp wrote: post #8
nshepperd wrote: post #6

> put a spotlight on the big pharmaceutical companies that had brought them to market — especially Pfizer and Moderna Moderna? The research startup that had only recently IPO'd and didn't have a single commercial product before covid? Seems weird to call it a "big pharmaceutical company". I'd rather a few founders become billionaires from a successful startup than have Moderna gone bankrupt and lose the vaccines they…

This assumes that only pharma companies can execute the steps required to bring the fruits of all that research to market. There is no reason a govt entity can’t do the same. It is a question of setting up the right incentives for the employees of that govt entity.

Yes it’s a matter of the incentives, but a government entity has fundamentally different incentives than a private entity. Countries ranging from Canada to Sweden to India to China invested heavily into state-owned industries in the 20th century, and every single one reversed course. Because it just didn’t work.

Re: The Public Shouldn’t Pay for Drugs Twice

#15

Post by rayiner »

jacknews wrote: post #5

Isn't this a deliberate model, and not only for pharma? Govt funds the risky research, and then hands the baton to competitive industry, which is good at 'finding markets', making it a product, and optimizing costs. Eg, google, amazon, etc, would not exist without the govt early (and continuing) funding of the tech their business is based on. What is then supposed to happen is that profits are taxed sufficiently, fee…

Economists broadly agree that taxing corporate profits is inefficient. From an NPR show surveying five economists across the political spectrum about what are consensus ideas in the field: https://www.npr.org/sections/money/2012/07/19/157047211/six-... (“Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich people.”).

The problem in the US isn’t that we don’t tax Google, Amazon, etc. Look at the corporate taxes in France or Sweden. They’re about the same. The problem is that we don’t sufficiently tax the billions in payroll at those companies.

Re: The Public Shouldn’t Pay for Drugs Twice

#16

Post by cdtwigg »

Throwawayaerlei wrote: post #10
jacknews wrote: post #5

Isn't this a deliberate model, and not only for pharma? Govt funds the risky research, and then hands the baton to competitive industry, which is good at 'finding markets', making it a product, and optimizing costs. Eg, google, amazon, etc, would not exist without the govt early (and continuing) funding of the tech their business is based on. What is then supposed to happen is that profits are taxed sufficiently, fee…

Only read the beginning of this screed, but its a unique and unlikely to be repeated situation until the next pandemic model. "Competitive industry" normally spends the big bucks to do Phase II and especially expensive Phase III trials. And as you note, manufacturing it. Which Pfizer did without Operation Warp Speed money until it started failing to deliver on its promises in December 2020. May have gotten some money…

Yeah it’s the trials that are really expensive, not the basic research. The government gets to spread its dollars around to lots of individual researchers but if they were instead using that money to fund phase III trials (1) we’d have a lot a lot less money for basic research (2) we’d fund a lot fewer phase III trials so (3) we’d see much less drug development overall. Also I’d worry about a potential conflict of interest if the same government is conducting and evaluating the results of drug trials.

Re: The Public Shouldn’t Pay for Drugs Twice

#17

Post by sneak »

rayiner wrote: post #15
jacknews wrote: post #5

Isn't this a deliberate model, and not only for pharma? Govt funds the risky research, and then hands the baton to competitive industry, which is good at 'finding markets', making it a product, and optimizing costs. Eg, google, amazon, etc, would not exist without the govt early (and continuing) funding of the tech their business is based on. What is then supposed to happen is that profits are taxed sufficiently, fee…

Economists broadly agree that taxing corporate profits is inefficient. From an NPR show surveying five economists across the political spectrum about what are consensus ideas in the field: https://www.npr.org/sections/money/2012/07/19/157047211/six-... (“Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich peop…

> The problem is that we don’t sufficiently tax the billions in payroll at those companies.

The government isn’t short on money.

Are we sure that the problem isn’t that we are spending Elon Musk’s entire lifetime net worth on the military each and every 90 days while not even at war? We shovel twenty tons of hundred dollar bills (about $2bn) into the neverending pit of the war machine every day.

I’m not convinced more government revenue is the solution to any problems, given what they are doing with their current insanely large levels of revenue at present.

Re: The Public Shouldn’t Pay for Drugs Twice

#18

Post by Arnt »

efficax wrote: post #7
jacknews wrote: post #5

Isn't this a deliberate model, and not only for pharma? Govt funds the risky research, and then hands the baton to competitive industry, which is good at 'finding markets', making it a product, and optimizing costs. Eg, google, amazon, etc, would not exist without the govt early (and continuing) funding of the tech their business is based on. What is then supposed to happen is that profits are taxed sufficiently, fee…

yes, it’s deliberate. it’s a deliberate way of using taxpayer dollars to enrich private citizens without providing taxpayer benefits.

If that's right, shouldn't there be a flood of new companies looking to get the dollars? Is there such a flood, or at least a stream? I haven't noticed one, but I don't really try…

Re: The Public Shouldn’t Pay for Drugs Twice

#19

Post by pessimizer »

Arnt wrote: post #18
efficax wrote: post #7

Earlier quoted context omitted.

yes, it’s deliberate. it’s a deliberate way of using taxpayer dollars to enrich private citizens without providing taxpayer benefits.

If that's right, shouldn't there be a flood of new companies looking to get the dollars? Is there such a flood, or at least a stream? I haven't noticed one, but I don't really try…

It's not a program to support small businesses, it's a structure to support massive companies who lobby and hire politicians and their friends and family.

Re: The Public Shouldn’t Pay for Drugs Twice

#20

Post by s1artibartfast »

jacknews wrote: post #5

Isn't this a deliberate model, and not only for pharma? Govt funds the risky research, and then hands the baton to competitive industry, which is good at 'finding markets', making it a product, and optimizing costs. Eg, google, amazon, etc, would not exist without the govt early (and continuing) funding of the tech their business is based on. What is then supposed to happen is that profits are taxed sufficiently, fee…

>What is then supposed to happen is that profits are taxed sufficiently, feeding back in to the system, but that part appears to have broken down lately.

How do you figure? Tax revenues are basically at all time high, and going up further.

Consider that 40% of US GDP now is collected in some form of taxation.[1] 40 cents of every dollar earned is taxed and spent as the government chooses. This is more than between FDR and Regan, and much more than the 20s (~15% of GDP)

Also consider that size of the pie has also increased! US real GDP per capita (accounting for inflation) has grown ~4x since the 1940s, and total GDP has grown ~20x! [2]

https://upload.wikimedia.org/wikipedia/commons/3/37/Federal%...

https://fred.stlouisfed.org/series/A939RX0Q048SBEA

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