8 ms·

This is basically the paradox of US healthcare innovation. Canada can tell its pharmaceutical companies, "yeah, that cool drug you just invented, we're not gon

• snippyhollow 13y ago
  US firms are investing less in R&D relatively to their rank http://en.wikipedia.org/wiki/Pharmaceutical_industry#Market_leaders_in_terms_of_healthcare_revenue http://en.wikipedia.org/wiki/Pharmaceutical_industry#Market_... than their French/UK (publicly-funded healthcare) counterparts. The US are not "subsidizing it for poor countries" more than other rich countries. The truth in the case you're making is not specific to healthcare and is that "research (private and public) of rich countries that can afford it" benefits poorer countries. So what, let's stop advancing science? We're all better off this way!
  • forrestthewoods 13y ago
    From that list 48.17% of all health care R&D spend is by US based companies. Sounds like the US is subsidizing the world to me.
    • alive-or-not 13y ago
      Health care R&D is extremely expensive in US (insanely high executive salaries, "lobbing" expenses, etc.). US companies may spend as much as the rest of the world, but deliver a lot less innovation.
      • adventured 13y ago
        I don't see any evidence to support your very dramatic claim. Quite the opposite. From early chemotherapy on to the human genome, stem cells, the Allen Brain Atlas, The Gates Foundation, modern biotechnology, organ regrowth, medical devices like the CT scanner (half invented in the US) or the da Vinci system of robotic surgery, etc etc etc the modern healthcare / pharma / biotech world owes a spectacularly massive debt to the US. To say nothing of the surrounding infrastructure everything requires related to technology from the microprocessor to the Internet. How much did that tech speed up R&D, try quantifying that little contribution.
        • analog 13y ago
          And all of that surrounding infrastructure is reliant on Mathematics which didn't originate in the US.
          • fredsanford 13y ago
            Such a useless comment. Mathematics was arrived at by research which everyone shared when the vast majority of the research was happening...
            • analog 13y ago
• venomsnake 13y ago
  According to Ben Goldcare (Bad Science, Bad Pharma) the companies spend around 12% of their budgets on R&D and 30% on marketing ... so the R&D is the easy part to be funded - just outlaw the direct marketing to consumers and doctors and the companies can spend 3 times as much on R&D with no problems.
  • arethuza 13y ago
    Agreed - they are fantastic books. His website is at: http://www.badscience.net/ http://www.badscience.net/
  • takluyver 13y ago
    Having heard Ben Goldacre speak, the problem isn't just direct-to-consumer marketing, which is already illegal in the UK for prescription drugs. Drug companies actually spend a lot of effort marketing to doctors, who think that they're smart enough to resist sales pitches. There's apparently evidence that they're not - doctors who see drug company reps prescribe those companies' drugs more often and have worse outcomes.
    • FireBeyond 13y ago
      "direct-to-consumer marketing, which is already illegal in the UK for prescription drugs". No (well, yes), it's illegal in -every single country- in the world except for the US. Only in America does your friendly pharmaceutical giant spend more money and energy on telling you what's wrong with you via non-individualized, vague 30 second spots - "Do you not get excited about anything? Cymbalta may help!" - than your healthcare providers. As a healthcare professional -in the US-, this disturbs me hugely.
  • twoodfin 13y ago
    No problems? Why wouldn't your genius idea work in every sector of the economy? Surely Apple and Samsung could sell more, better phones if they didn't conduct market research or run ads...
    • venomsnake 13y ago
• BerislavLopac 13y ago
  Actually, the problem in the US is in the lack of the balance between the producers and customers of medicine. In Canada, as you point out, there is a state monopoly on the purchasing side, but there is a similar monopoly on the selling side, in the form of medical patents. In India, there isn't a monopoly on either side. In the US, you have no monopoly on the healthcare side, but the drug companies have a monopoly on the drugs they produce. I'm not saying neither that you should drop the patents nor that you should introduce social healthcare -- but you should restore the balance in some way. Personally, I'm for dropping or drastically reducing the patents on new drugs. I know that the argument against it is that it will discourage the research, but I don't believe it -- actually, it would enable further research on already existing drugs, improving them, and finding new uses and applications (think Viagra). But that's my personal opinion, and I'm not even a US citizen; you should find the right solution for yourselves.
  • objclxt 13y ago
    > In the US, you have no monopoly on the healthcare side, but the drug companies have a monopoly on the drugs they produce. In a way there is a monopoly on the healthcare side in the US, but it only impacts a certain segment of the population. Medicare is able to negotiate significant discounts on the cost of healthcare compared to private insurers precisely because for so many people it is the de facto provider. There was a really interesting Planet Money podcast a month or so ago about healthcare costs in the US which covered why the difference between private insurers and Medicare is so great: http://www.npr.org/blogs/money/2013/02/26/172996963/episode-439-the-mysterious-power-of-a-hospital-bill http://www.npr.org/blogs/money/2013/02/26/172996963/episode-...
    • rdl 13y ago
      Medicare/Medicaid are specifically not allowed to bargain on drug prices, though. They are a monopsony for hospital/doctor services, with full pricing power, for the old and poor, but pay market prices for drugs by law.
      • refurb 13y ago
• nicktelford 13y ago
  You're forgetting an important factor. Competition. Pharmaceutical companies operate in an environment with very little competition. Obviously, the purpose of patents are to grant a limited monopoly in return for the innovation, but when that innovation is the only viable treatment for something, the manufacturer can just name a price and everyone has to live with it. The problem is that the US healthcare system isn't a capitalist system; it's an oligopoly.
  • userulluipeste 13y ago
    "the manufacturer can just name a price and everyone has to live with it" Considering the context of the discussed business and that the offer is not always just something optional, I might add "or die with it..."
  • refurb 13y ago
    There isn't any competition? Ask Vertex about that! They just launched a new HCV drug that was expected to bring in several billion dollars per year of revenue at its peak. Now? It probably won't pass the $500M mark because other companies are bringing in competing therapies.
• mansigandhi 13y ago
  > The US is effectively subsidizing advanced healthcare for every other country in the world. That's a very misinformed statement.
  • melling 13y ago
    Please provide some data to back that up because it is a common belief that the high cost of producing a new drug is offset by the US consumer.
    • coldtea 13y ago
      What high cost? US companies pay more money for advertising than for creating the drug. Add other regulation and inefficiencies, and subsidized research would work with 1/10 the money. Not to mention that because of the commercialization of medicine, tons of research is for BS like Viagra and other such drugs (like the tons of stupid feel-good "energy" drugs, so that your boss can squeeze even more overtime out of you), where far more important but less lucrative stuff is ignored. That's how you get the US sucking donkey's balls in infant mortality rates. As if it was some third world country.
      • adventured 13y ago
        If that were true, the rest of the world would have radically surpassed the US in terms of drug innovation, research breakthroughs, medical device technology and so on. Because their lower investment levels should be producing returns so much higher, that they would quantum leap the US while spending less. That hasn't even remotely happened. Sucking donkey balls on infant mortality? You should become better educated. How about Canada, at 5.22/1000 versus 6.81 for the US. That's your magic line on 3rd world countries and donkey ball sucking? Well Singapore is 1.92, and Japan is 2.6, so Canada, New Zealand, Australia and Britain are apparently 3rd world countries by comparison. Half of the US infant mortality rate is due to high black poverty. Maybe you should become informed on the root causes of problems in America before making bad assumptions.
      • dontstealmyname 13y ago
• ofacup 13y ago
  well that's the biggest load of shit i've ever read
• adaml_623 13y ago
  You say that US healthcare leads the way in innovation but in certain key measures like Infant Mortality and Life Expectancy it's not leading the field at all.
  • adventured 13y ago
    The US is within a small margin of error to being on par with both Japan (adjusting for their huge fraud in longevity) and South Korea on life expectancy. That sure sounds amazing considering our obesity / diet problems. I'd argue in fact that our advanced healthcare system and large investment is the only reason Americans aren't dying at 70 instead - we're able to keep people alive that would otherwise die much younger. I'd argue if you matched diets to other countries with very high life expectancies, we'd easily match or surpass them in longevity and live to 83 to 85. Our problem is mostly lifestyle. Infant mortality? What, you think Bosnia and Russia actually beat the US in infant mortality, or is it more likely they're lying? (given Russian men live to 60).
    • analog 13y ago
      Bosnia and Russia are both listed as having worse infant mortality rates than the US. http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate http://en.wikipedia.org/wiki/List_of_countries_by_infant_mor...
      • adventured 13y ago
        I was going by the CIA factbook. It lists Bosnia at 6.1 (50% lower than the Wiki). The Wiki entry claims it uses the CIA factbook as a source. So I'm not really sure which source that Wiki entry is relying on.
        • analog 13y ago
          The first table in the Wikipedia entry uses UN estimates which have Bosnia at 13 deaths per 1000 births.
    • 13y ago
• bitdiddle 13y ago
  I think this notion of the drugs companies needing incentives for R&D is somewhat of a myth. A large amount of the research, which they avail themselves of, is publicly funded at places like NCI and NIH. That's right, we the taxpayer helps produce these 70K dollar drugs.
• DennisP 13y ago
  So the problem is that healthcare innovation is a public good, which like all public goods is underprovisioned if you don't take steps. We approached this one by converting it to a private good within the U.S. But that's not the only solution. A natural entity to pay for drug development is health insurance companies, who would save a lot of money if drugs were patent-free. But they don't in fact fund patent-free drugs, since their competitors could free-load. Bernie Sanders proposed a solution: tax the insurers so none can freeload, and use the money for drug development, and keep everything patent-free. The insurers could come out ahead. (Iirc he had a slightly more complex arrangement that didn't require the government to decide who would be funded.) It's worth noting that patents don't only reward inventors, they also increase their costs. The book The Gridlock Economy talks about this, and mentions one biotech firm that thought it had a cure for Alzheimer's. It infringed on thirty patents, and each patent-holder thought it had the most important part and charged accordingly. They had to abandon the whole thing.
  • amalag 13y ago
    Having the government fund patent-free drug development is a very interesting approach. Is the idea to do through proposals like Darpa?
    • betterunix 13y ago
      I would support such a system. In my ideal world, things look like this: NIH pays for the research and development of new drugs, and we do not give out patents for any of it. Pharmaceutical companies are free to produce whatever drugs they want, and cannot prevent anyone else from producing those drugs; they must only meet the quality control standards set by the FDA. All drugs would be sold like today's "generics," in a competitive market that keeps prices down.
• jellicle 13y ago
  Has nothing to do with "innovation", since nearly all healthcare research is paid for by the U.S. government anyway, and it's much less money than you think. The claimed expenses for "research" are mostly about bringing slight variations of drugs to market in order to extend patent protections - that is, they are rent-seeking. > "More than four fifths of all funds for basic research to discover new drugs and vaccines come from public sources." http://www.bmj.com/content/345/bmj.e4348?ijkey=Y1g4ZVUImIbtXOI&keytype=ref http://www.bmj.com/content/345/bmj.e4348?ijkey=Y1g4ZVUImIbtX... The story of healthcare costs in the U.S. is entirely to do with profits for drug companies and hospitals, and has almost nothing to do with "innovation".
  • refurb 13y ago
    The key to your comment is "basic" research. You can discover a new drug for a few tens of millions of dollars. Now to get that drug to market? You need to cough up a few hundred million dollars. Discovering a drug doesn't save any patients, getting it to market does and THAT is paid for by private companies.
    • Retric 13y ago
      It costs tens of millions of dollars in large part because US healthcare is so expensive. The actual handing out of drugs is fairly low effort, it's everything else that makes trials so expensive.
      • refurb 13y ago
        It costs 10s of millions of dollars because that is how you prove a drug is safe. That isn't unique to the US. If you want to launch a new drug in the EU, it's not going to cost you any less.
        • Retric 13y ago
          the number of FDA-regulated investigators running trials abroad has increased by 15 percent each year, while the number of U.S.-based investigators declined 5.5 percent annually. Several forces are pushing trials elsewhere, the researchers noted: cost (a trial at a top medical center in India may cost less than one-tenth per patient what it would cost at a second-tier U.S. center); faster approval times; and less red tape. http://health.usnews.com/health-news/managing-your-healthcare/research/articles/2009/02/18/many-clinical-trials-moving-overseas http://health.usnews.com/health-news/managing-your-healthcar... PS: Of note: In the US, sponsors may receive a 50% tax credit for certain clinical trials. http://en.wikipedia.org/wiki/Clinical_trial#Economics http://en.wikipedia.org/wiki/Clinical_trial#Economics
• LekkoscPiwa 13y ago
  No, No, No. It is exactly opposite. It is the rest of the world subsidizing the US. The dollar is the world currency. It means that if any other country in the world wants to buy energy (i.e. oil or natural gas), or to trade internationally, it can do that only and only in the US dollars. About 90% of all dollars in circulation, circulate outside of the US borders. Think about it for a second. Your "genius" central banker Ben Bernanke may print and print and print and who gets hit by inflation? China does. Europe does. Japan does. You get just 10% of it and 100% of its benefit. So, yeah, with the whole world subsidizing you any, each and every time that a barrel of oil is bought, or m3 of gas is bought, or international trading deal done -- you can waste as much as you want, bragging how great you are, sure. But I tell you this: given unlimited and unrestricted credit any nation could innovate and create google's, healthcare and military equipment it wanted. It is just function of free credit. Someone else pays your bills. Clowns like Trump can go bankrupt every second year (as he does!) and still get even more borrowed money from a bank overflowing with it from the FED that gets it with only 10% downside, exporting 90% of the cost. There are no miracles in this world and US is not an exception. Wait and see world turning back on the dollar, and we'll have a level playing field. Then we'll see how much the USA is really worth. Without subsidies.
  • gte910h 13y ago
    > Your "genius" central banker Ben Bernanke may print and print and print and who gets hit by inflation? China does Inflation has been painfully low for years. Many have said it needs to be higher actually.
    • tete 13y ago
      Many in the US?
• spartango 13y ago
  > ...it's likely to be tough to control costs and yet maintain R&D and innovation I'm running a biotech/healthcare startup, and this point is rather interesting for me. Most of these arguments against "crazy high" drug pricing in the US work to vilify the large pharma and biotech companies. I don't seek to defend them, but perhaps we can look at some of these conundrums through a startup's lens: Getting my product to market is incredibly challenging. There's a good amount of novel technology development and research around it, and we're not even developing a therapeutic. We're working in a scientifically challenging space (cancer pathology), so things aren't easy. Even if we can build what we are trying to, that's not the sum total of our costs. We have to invest a huge amount of energy into validating that what we've built is scientifically accurate, and then medically appropriate. This isn't for regulatory approval, this is simply to convince our customers (and basic ethics/QA, I suppose). The standards to which our product will be held are quite high because we influence peoples' lives. That's the curse and the blessing of healthcare. Given all the work we're putting into this and the nontrivial cost of the project, we'll need to generate significant revenue to make it work out. It doesn't come cheaply, but in the US we think there's room in budgets for us. We don't seek to price exorbitantly, but there's a fine line between that and barely surviving.
  • betterunix 13y ago
    It sounds like the US might be better served if those research costs were funded by the government. If only we had an agency that gave researchers the money they needed for this sort of thing, some kind of national institutes of health that would be a medical counterpart to the NSF and DARPA... The problem with market-based approaches to medical research and medicine distribution is that they force people to make economic decisions about their healthcare. Nobody, regardless of their income level, should have to sit down and ask themselves, "Do I want to treat my cancer now, or do I want to buy food for my children?" The same arguments for a universal healthcare system apply to federal funding for medical research. Yes, medical research is expensive; no, we do not want to fund it with a system that denies medicine to people who need it. I do not want to be overly critical of your startup. Nobody says, "Man, there are too many ways to treat cancer!" On the other hand, your startup does need to bring in enough money to cover its costs, which means you cannot just give your drug to anyone who needs it -- you need to charge them for it. That is why the funding model needs to be overturned, so that the cost of developing the drug is not an issue in getting the drug to people who need it.