Health Care and Big Pharma - how do we fix the system?

[LogGrad98]

Thought this deserves its own thread. I'm sure this had been discussed before but couldn't find a suitable thread with my limited search.

Here's an interesting article detailing some of the problems with big pharma and how America subsidizes the rest of the world.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4941970/

It talks about how mergers have affected drug prices by reducing competition. Market forces that are good for profits, bad for consumers. An example:

An interesting example of the result of mergers involves the drug Daraprim, an antiparasitic drug frequently used by patients with suppressed immune systems, such as people with HIV or cancer. In 2010 GlaxoSmithKline sold the marketing rights of Daraprim to CorePharma, which in turn sold the rights to Turing Pharmaceuticals in 2015. Turing almost immediately announced that the price of a Daraprim pill would be raised to $750 from the previous $17.50, a 40‐fold increase. That announcement resulted in a huge public outcry followed by the company backpedaling and announcing that it would lower the price. How low that price will be is not clear, however.

This is not an isolated case and it is pretty clear that free market regulation of the healthcare industry is general just does not work. I've repeatedly brought up the notion that healthcare needs to be viewed as a utility, not a standard good or service, because it is so price inelastic. How can we improve or replace the system?

 

[idestroyedthetoilet]

Turn SStrust into more of a sovereign wealth fund that owns 20-25% of these companies. Put people on the board who will keep executive compensation down. High dividends will go to the people while incentive to innovate remains.

 

[LogGrad98]

Thanks for the response. Imo something has to be done about the cost structure as well as litigation expense. Somehow we have to stop subsidising the world on prescription drug costs.

 

[Rubashov]

Thought this deserves its own thread. I'm sure this had been discussed before but couldn't find a suitable thread with my limited search.

Here's an interesting article detailing some of the problems with big pharma and how America subsidizes the rest of the world.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4941970/

It talks about how mergers have affected drug prices by reducing competition. Market forces that are good for profits, bad for consumers. An example:



This is not an isolated case and it is pretty clear that free market regulation of the healthcare industry is general just does not work. I've repeatedly brought up the notion that healthcare needs to be viewed as a utility, not a standard good or service, because it is so price inelastic. How can we improve or replace the system?

I wouldn't say that you subsidise our medication costs, I would say that big pharma has such control over your congress that they no longer act in your own interests. Here the government sets prices for medications through the pharmaceutical benefits scheme and purchases drug in bulk centrally. This keeps cost down to consumers and the government, the joys of socialized medicine you guys should try it.

Destroying the PBS has been a central pillar of numerous US-Australian trade negotiations, all have failed, mostly because Medicare and the PBS are scared cows and would cost any political party government. (Not to say the conservatives haven't tried but electorally its the third rail.) Importantly the reason they have targeted us is not because of the size of our market but because our model in some form or another has been adopted by other countries. Canada's scheme is basically a copy of ours for example.

 

[idestroyedthetoilet]

Thanks for the response. Imo something has to be done about the cost structure as well as litigation expense. Somehow we have to stop subsidising the world on prescription drug costs.

Agreed. I think that discussion has to be had with the caveats that I prefer to deal with the cost burden over stifling innovation, and I understand underdeveloped countries cannot afford what we can so I don't mind pharma making little to nothing on them while getting economy of scale that lowers production costs. I don't like that we pay more than an even share of countries that can afford.

I dont want to derail your thread with my solution above. It wasn't entirely serious and has many, many complications but I would like to see American's retirement in higher returning instruments than IOU's issued in our grandchildren's names (any retirement i.e. future consumption always is pretty much that, but...). Maybe someone can start a thread on that when discussion is slow here.

 

[idestroyedthetoilet]

I wouldn't say that you subsidise our medication costs, I would say that big pharma has such control over your congress that they no longer act in your own interests. Here the government sets prices for medications through the pharmaceutical benefits scheme and purchases drug in bulk centrally. This keeps cost down to consumers and the government, the joys of socialized medicine you guys should try it.

Destroying the PBS has been a central pillar of numerous US-Australian trade negotiations, all have failed, mostly because Medicare and the PBS are scared cows and would cost any political party government. (Not to say the conservatives haven't tried but electorally its the third rail.) Importantly the reason they have targeted us is not because of the size of our market but because our model in some form or another has been adopted by other countries. Canada's scheme is basically a copy of ours for example.

The response/concerns with this is always innovation incentive. We feel we bear the brunt of that, and call it subsidising the world. I don't see it as subsidising in the traditional use of the word.

 

[Rubashov]

The response/concerns with this is always innovation incentive. We feel we bear the brunt of that, and call it subsidising the world. I don't see it as subsidising in the traditional use of the word.

Thing is that's a complete load of rubbish, there are a number of world leading research facilities in Melbourne that are not for profit and publicly funded that work in partnership with American pharmaceutical companies and Universities both here and internationally to bring drugs to market. American corporations have an extremely poor history in terms of innovation, their main strength is packaging and marketing, oh and price fixing, if you look at the history of innovation, your space program aside (which is publicly funded) as a country your record is fairly poor.

 

[LogGrad98]

Agreed. I think that discussion has to be had with the caveats that I prefer to deal with the cost burden over stifling innovation, and I understand underdeveloped countries cannot afford what we can so I don't mind pharma making little to nothing on them while getting economy of scale that lowers production costs. I don't like that we pay more than an even share of countries that can afford.

I dont want to derail your thread with my solution above. It wasn't entirely serious and has many, many complications but I would like to see American's retirement in higher returning instruments than IOU's issued in our grandchildren's names (any retirement i.e. future consumption always is pretty much that, but...). Maybe someone can start a thread on that when discussion is slow here.

Yes it was simplified but imo not far off. No possibility to retire, lack of universal health Care, exorbitant costs of health Care, etc. Are all issues other developed countries have largely solved, but we aren't even close. These should be pretty basic things. We need solutions like that, that could appeal to broad swaths of the population if there's any chance of getting anything done.

 

[idestroyedthetoilet]

Thing is that's a complete load of rubbish, there are a number of world leading research facilities in Melbourne that are not for profit and publicly funded that work in partnership with American pharmaceutical companies and Universities both here and internationally to bring drugs to market. American corporations have an extremely poor history in terms of innovation, their main strength is packaging and marketing, oh and price fixing, if you look at the history of innovation, your space program aside (which is publicly funded) as a country your record is fairly poor.

It's probably the easiest area where you could convince more people that private sector isn't better than government, but I wouldn't lace it with too much "hey you stupid *** cocky Americans, your capitalism isn't always best". People get sensitive. I wouldn't even discount private sector innovations either as they obviously are, but healthcare isn't a damn market so market dynamics don't apply equally as they do to Walmart.

 

[candrew]

American corporations have an extremely poor history in terms of innovation, their main strength is packaging and marketing, oh and price fixing, if you look at the history of innovation, your space program aside (which is publicly funded) as a country your record is fairly poor.

Can't help but enjoy the irony of this statement made on the internet via a computer or mobile device.

 

[Miggs]

Yeah, the U.S. looks like a ******** as far as drug development.

https://xconomy.com/seattle/2014/09/02/which-countries-excel-in-creating-new-drugs-its-complicated/

 

[One Brow]

I've repeatedly brought up the notion that healthcare needs to be viewed as a utility, not a standard good or service, because it is so price inelastic. How can we improve or replace the system?

At some point, we will need to accept that, whether in the private or public framework, healthcare is always rationed. We will need to abandoned market-based ideas, as you suggest. There are dozens of models we could follow, and almost all of them would be an overall improvement on what we have. I don't have a favorite in that race.

 

[idestroyedthetoilet]

Yes it was simplified but imo not far off. No possibility to retire, lack of universal health Care, exorbitant costs of health Care, etc. Are all issues other developed countries have largely solved, but we aren't even close. These should be pretty basic things. We need solutions like that, that could appeal to broad swaths of the population if there's any chance of getting anything done.

I'm not convinced that Europe has retirement (future healthcare funding a huge part of anyone's) anywhere close to fixed but at least they seem to understand the basic concept that paying for retirement, or people not working, is and will always be a burden born by the young, or people working. You can't save up 20 years of food and water, and you can't save up any other future consumption such as healthcare, assisted living, sewer, garbage, etc. It's future consumption which means future production, which means future work. America is stuck on this idea that we can all save [assets] to pay for retirement. That is a myth. Assets are liabilities + things other people don't have that you can sell to them [in exchange for the value of their current/future production or in trade for an asset]. For the most part that either means a debt owed by the young, or owning a productive business they don't own because you do. Either way, it is a burden on the working class. Generically said and I'm sure some twit will try to nitpick but that is essentially what we mean when we say retirement even if most don't seem to understand the real world implications of what they're talking about. It's future consumption, an impossibility to save. We aren't going to ever fix our complaints until we phrase the discussion accordingly.

 

[LogGrad98]

I'm not convinced that Europe has retirement (future healthcare funding a huge part of anyone's) anywhere close to fixed but at least they seem to understand the basic concept that paying for retirement, or people not working, is and will always be a burden born by the young, or people working. You can't save up 20 years of food and water, and you can't save up any other future consumption such as healthcare, assisted living, sewer, garbage, etc. It's future consumption which means future production, which means future work. America is stuck on this idea that we can all save [assets] to pay for retirement. That is a myth. Assets are liabilities + things other people don't have that you can sell to them [in exchange for the value of their current/future production or in trade for an asset]. For the most part that either means a debt owed by the young, or owning a productive business they don't own because you do. Either way, it is a burden on the working class. Generically said and I'm sure some twit will try to nitpick but that is essentially what we mean when we say retirement even if most don't seem to understand the real world implications of what they're talking about. It's future consumption, an impossibility to save. We aren't going to ever fix our complaints until we phrase the discussion accordingly.

I can really only speak to Germany. Of course they don't have retirement solved, per se, but their system is leaps and bounds beyond our, up to and including assisted living arrangements. Yes it's a giant Ponzi scheme really, one in which we are on the cusp of losing the farm because we don't have anywhere near the workforce available behind the baby boomer retirement horde.

 

[Rubashov]

Can't help but enjoy the irony of this statement made on the internet via a computer or mobile device.

All technologies no longer dominated by American corporations, internet aside maybe. All displaced by their lack of innovation and poor quality products, hell IBM don't even make PCs anymore. looking around my house almost none of the electronics or appliances are made by American corporations, they are all either Taiwanese, Japanese or German, the cars are German and so on. When was the last round of new antibiotics developed? The 70s?

Look at Apple, their real success is in packaging and marketing not innovation.

 

[Rubashov]

I can really only speak to Germany. Of course they don't have retirement solved, per se, but their system is leaps and bounds beyond our, up to and including assisted living arrangements. Yes it's a giant Ponzi scheme really, one in which we are on the cusp of losing the farm because we don't have anywhere near the workforce available behind the baby boomer retirement horde.

I can really only speak to Germany. Of course they don't have retirement solved, per se, but their system is leaps and bounds beyond our, up to and including assisted living arrangements. Yes it's a giant Ponzi scheme really, one in which we are on the cusp of losing the farm because we don't have anywhere near the workforce available behind the baby boomer retirement horde.

We have compulsory superannuation funds here, effectively forced savings paid by all employers at I think 8 or 9 percent of your weekly wages, most Australians have at retirement a few hundred thousand in these funds (I'm 36 i have around 100k). Its not a bad idea, its created Super Funds with trillions of dollars to re-invest in the economy, which helps keep the price of capital down, it could also be a contributing factor to the price of housing in this country (which is astronomical, median price for a house in Melbourne is something like 800,000 AUD) and considering that home ownership is the cornerstone to a comfortable retirement its kind of interesting. One problem has been solved in terms of low personal savings (historic problem in this country) but it has created a new one in terms of housing security in retirement. Add to this our demographics problems with baby boomers and its interesting times ahead.

 

[idestroyedthetoilet]

One problem has been solved in terms of low personal savings (historic problem in this country) but it has created a new one in terms of housing security in retirement. Add to this our demographics problems with baby boomers and its interesting times ahead.

In your experience, do Australians typically think this way about cause and effect? Americans certainly don't, which is odd since we tend to consider ourselves some world leading economic machine.

Side note: I'm getting a ton of visit Australia ads because of you.

 

[Rubashov]

In your experience, do Australians typically think this way about cause and effect? Americans certainly don't, which is odd since we tend to consider ourselves some world leading economic machine.

Side note: I'm getting a ton of visit Australia ads because of you.

Nope, for the majority of Australians particularly breeders investment property is their way to accumulate wealth while they work for the man. When i was 30 i realised this was never going to work for me, i was working 7 days a week to make around 100k per year and knew it wasn't sustainable, so I started thinking about how to speculate in the economy to make more money and work less. By the end of the decade i should be close to trebling my income while working a 40 hour week, I'm planning on diversifying my interests into property now, firstly to increase my asset base and secondly to enjoy tax benefits.

Side note: You must be the reason i keep getting ads for Russian hookers.