Dutch join backlash at expensive drugs by making their own

Advertising direct to the public is banned in many countries, but not the US - I assume this is what you're referring to. However, pharma companies can and do spend billions on marketing to healthcare professionals within the EU.

> However, from a societal point of view it seems to me that it is much better for society for there to be no marketing of drugs.

Your point about the societal value of drug marketing is complex. In some cases, I totally agree with you that it's not money well spent - selling one beta blocker or statin against five others with broadly comparable data hardly helps the cause of humanity. However, in other cases the marketing/sales actually helps ensure that patients are given the drugs that they need - doctors aren't infallible, and not all doctors are created equally.

> The current system seems to incentivize companies to hold on to patents by making minor, insignificant changes to drugs to maximize profits.

This is actually relatively rare.

> They are incentivized to ignored exotic diseases that have too small of a market share for each individual disease but affect, collectively, a lot of people.

Like it or not, the overall cost of discovering a drug, then testing it all the way through the many phases over many years, is roughly billions. Rare diseases can be ignored because it's simply not sensible business to develop drugs for them. Unless a company can find a way of charging a very high price, or find short cuts to development, or the current system of regulations is eased, this won't change.

Don't we all bear the cost of treatment in the form of higher insurance costs because insurance companies are paying exorbitant prices on drugs (among other things)?

1. The time horizons involved don't work well with government. The US can't get anything done over a 20 year time horizon, and the highly delayed ROI means projects would always be first on the chopping block when it came to cost cutting. As a side note, currently we can't even agree to adequately fund basic research in the country, let alone drug development.

2. R&D would inevitably be politicized. Some senator would want disease X researched because their kid has it etc. Some tax payers won't want to fund disease Y.

3. It places R&D and regulatory in the same high level entity. That sets up all sorts of conflicts of interest.

4. It complicates international trade. What if the US develops most drugs. What should Europe be charged for them? Surely products can't be open sourced because one group of tax payers paid for them and would want ROI etc.

5. Similarly, who decides pricing for all the US buyers? Get ready for massively complicated procurement based on tons of different rules.

Drugs, as a whole, aren't that expensive today compared to other healthcare. They make up 9.8% of US health care expenditure, which is pretty much middle of the pack compared to OECD countries. Hospitals, largely "non profit" (but sometimes massively profitable) make up 35%. But drugs feel more expensive bc copays are typically higher for drugs than for medical care

As it stands today the drug industry spends ~$200B a year to get 20-50 new FDA approved drugs a year. Virtually no fda approved drugs are developed solely by academia. NIH budget is $30-35B and on a steady long term decline. So you'd have a massive taxpayer expense just to build out that r&d function

Then you'd have to build out manufacturing. And some sales and marketing analog -- even if you aren't trying to profit, somebody needs to go out and tell doctors about your new drug and share with them very detailed data about how the drug works, what patients it works for, compared to the competition. Doctors can't stay on top of this themselves -- they are too busy and there's too much info

Then you'd need to build out some administrative function and some way to decide what projects move forward at what stage. This is where publicly funded drug research would probably massively underperform private for profit r&d

If you are making drugs for profit, you have a strong incentive to be efficient with your research. If not you go out of business. The more these decisions are driven by politics rather than profit motive, the less productive r&d is. And r&d cost and productivity is the reason drugs are expensive

There's evidence that startups are 10x more productive at r&d than pharma and it isn't crazy to attribute a lot of that to less politics

As of now something like 30-50% of published academic findings are thought to be false. 30%+ of all NIH money goes to "overhead", i.e. Profit to universities. And yields no fda approved drugs without private company investment

In the end when you change one part of the process you need to assume other parts of a related system will change in some manor.