There is no need to nationalise at all. The solution is not reduced competition but increased competition.
The power of the pharmaceutical industry comes from artificial monopolies in the form of patents, approvals and import restrictions. Since the public funds the initial research anyway, those limitations can be reduced until competition exists and medicine is once again affordable.
The pharmaceutical industry is getting really good at gaming the patent system. My sons inhaler was pretty cheap for a long time until all of a sudden it jumped in price. Like, from $30 to $300.
Turns out, all they did was change the delivery mechanism--slightly--and the next thing you know it's somehow covered under a different patent. The medication stayed exactly the same.
That's pretty much a US-only problem. The same drug companies are active in most parts of the world, where they somehow manage to behave. What is it about the US that seems to turn them into money grabbers?
Do they sell that inhaler, or the older and cheaper version, for much less outside the country? Plane tickets are cheap these days; it might be worth it to take a foreign vacation and stock up on inhalers.
I never claimed this was a sustainable strategy for most Americans. Where did you ever get that idea?
Someone on this site probably has a good income in the software sector, and can afford a plane ticket out of the country to stock up on inhalers abroad.
Maybe you should try not getting outraged about every comment that doesn't propose somehow creating utopia.
> I never claimed this was a sustainable strategy for most Americans. Where did you ever get that idea?
Maybe because this is a website for American venture backed corporations who use the American intellectual property system to create and sustain powerful and influential entities in a newly digital world?
> Maybe you should try not getting outraged about every comment that doesn't propose somehow creating utopia.
Please don’t shame me. And if you do, think about this: why am I shaming someone for desiring a better world?
I think the fact that you are not angry about this situation means your golden handcuffs (whatever they look like) are causing you to be blind to underlying structural or systemic issues.
“I tell my students, 'When you get these jobs that you have been so brilliantly trained for, just remember that your real job is that if you are free, you need to free somebody else. If you have some power, then your job is to empower somebody else. This is not just a grab-bag candy game.”
― Toni Morrison
+
A reason I post here is because I don’t know everything and I enjoy learning about different views. I have learnt a lot from reading the discussions people have on here.
Sometimes this also means that I produce counterpoints and weigh in with stories or some counter-arguments when the topic seems interesting/relevant to me. If you believe I react strongly (or as you described me: “outraged”), then I’m glad to know it and I will bear it in mind for the future, and try my best to be even more nuanced/curious.
I believe we are all beautiful complex humans who just happen to be pushing plastic buttons and sending our thoughts into cyberspace. I am grateful for the possibility to talk with you, and it is not my intention to hurt you.
You're the one picking on me for just handing out some advice to someone.
>I think the fact that you are not angry about this situation
Where did I ever say I was OK with the state of affairs here? You're projecting your own biases and assumptions onto me.
All I did was give some advice to someone who is a victim of a crappy situation. You lashed out at me for not coming up with some magical solution to fix all the ails of the American healthcare system, or instead just whining about how bad the system is, instead of offering constructive advice for his particular situation.
Suppose you need inhalers, and you're living here in America with our crappy healthcare system, and suddenly your inhalers cost $300 instead of $30. But you make $100k+ at a tech company, like so many people here. Someone suggests taking a vacation to Canada or Europe or whatever and stocking up. What are you going to do, so "no!! All the poorer people here can't afford that, so I'm going to pay full price for these inhalers even though I'm going to Canada next week!" Or are you going to take advantage of your ability to travel and save some money on inhalers? Personally, I don't see how it's morally justifiable to not stock up on inhalers on your trip to Canada, and instead enrich the domestic companies that are screwing you over.
I think the usual issue is that when a patent expires, a competing product still has to pass extensive (and expensive) safety tests before it can be sold. this is how you end up with pathological cases of price gouging on low volume generic drugs.
this might be a good place for a government agency to step in and manufacture out of patent drugs and delivery devices at a reasonable price. it would at least be interesting to see the difference between the "reasonable price" and the actual cost to produce.
Another trick is to patent a new delivery method or some such nonsense. You can protect a single drug or treatment with a large variety of different patents to extend protection. Old drugs in fact comprise a vast majority of new patents.
I've been talked at about this problem for ~hundreds of hours. It's really a depressing situation.
Doctors also have a duty to prescribe the best available drug, which is why you dont see people who cant afford modern insulin prescribed "last gen insulin."
>What’s surprising is that the trailing edge of old
insulin products did not generate a market for
generic competition but rather became a set of
obsolete products that were promptly removed
from the U.S. market. Pork and beef insulins
are not merely underutilized, they are unavailable for human use in the United States. Even
when practitioners prescribe NPH and R insulin
in place of insulin glargine and insulin aspart,
these cheaper prescriptions are filled with newer recombinant products sold under brand
names. And yet on the whole, it’s hard to say
that contemporary patients who cannot afford
their insulin (let alone the patent-protected glucometers and test strips required to adjust the
dose) are well served by having as their only option an agent that is marginally more effective
than those that could have been generically
available 50 or 30 or 10 years ago, had generics
manufacturers introduced cheaper versions when
patents expired.
I shouldnt blame the doctors, my comment was a little facetious.
Some "low cost" versions did come out in 2019, but it feels more like the diamond industry selling both natural and lab made diamonds at different price points.
>Since we’re talking about cheaper insulin, Novo Nordisk’s Novolin ReliOn brand deserves a mention here. Sold for just $25 a vial without a prescription at Walmart, ReliOn includes “Regular” (short-acting), NPH (longer-acting), and 70/30 (biphasic insulin), a combination of the other two. These ReliOn products are not generics or biosimilars, but rather older “human” insulins — as opposed to the newer “analog” versions being produced today. Many patients and doctors agree that these older formulations clearly don’t provide the same level of blood glucose management as newer insulins.
But if you’re forced to choose between using them and doing without or rationing insulin, these older insulins are certainly preferable.
If there’s a profit, yes. But try explaining “sorry we have the ability to treat you but you’re going to die because the medicine isn’t profitable enough for a company to produce”.
That's the other argument for nationalizing the pharmaceutical industry: broadening the supply chain. When Hurricane Maria destroyed Puerto Rico there was a shortage of saline in the US, because margin is so low that the market can only support very few manufacturers, many of which were on Puerto Rico.
Right now we are looking at another rash of shortages. The Indian government has banned export of certain medications and pharmaceutical intermediates because India is worried about the coronavirus outbreak and domestic shortages.
Many schools of economics teach that the proper place for the government to step in is when something serves the public good but has a low chance for profit. Public transportation, libraries, schools, roads, parks. These wouldn’t be profitable ventures for a commercial operator, but the public needs these things. So the government provides.
I wholeheartedly agree, but that doesn't mean that government employees build all the roads, schools, and parks. This is often done by for-profit companies and payed for with tax dollars
They are a buyers' consortium, not a manufacturer of anything. Since they do not own production capacity for generics they can merely shift the problem elsewhere through concentrated buying power, but they cannot alleviate it.
No, it looks from the wikipedia page like they have contracted with producers so they are causing new production. Also planning to add their own capacity.
Edit: adding the wkp quote: "By the end of 2019 Civica had 18 medications (28 SKUs) in production, and plans to bring over 100 medications to market in five years through various manufacturing approaches such as partnerships, developing ANDAs, and building its own manufacturing capability."
Plus the fact that it is about a concept. In vague terms, I'm thinking it is better to act (doing, producing, finding alternatives, maybe and using monopoly laws?), than to try to restrict what someone else does.
Did they bring new production capacity on-line or do they just rent space from a contract manufacturer? They don't say, but it seem it's the latter.
One problem with the US healthcare system is the lack of spare capacity. It increases profits when everything is well, but if there's a pandemic or mass casualty incident there's shortages. Economists know how to handle inelastic supply and sudden demand shocks, but the message hasn't gotten through to public health. Perhaps that's intentional.
There are of course insane cases of abuse but there is also tricky part where the cost of the medicine in total will be very high because the population suffering from it is small and the medicine is very complex to develop.
Even IF the healthcare company did not spend tons on money on commercials there will be those drugs that if you want to develop them they will cost a lot of money for the one paying (government, insurance company or individual) if the company wants to get back it's money and ideally make some kind of profit (even if it is very average/low).
No. Nationalizing it will politicize pharmaceuticals. (and parties change control every few years of so). Private industry may chase the longevity dollars (expensive drugs for rich people who want to make their later years easier), but they also do lots of research in lots of other mundane areas.
The problem is more in the healthcare _system_ whose incentives are not aligned with the patients foremost, but rather is more geared towards extracting as much as possible from insurance companies who in turn are disincentivized to give their patients decent care, in many ways.
Agreed. Outcome based pricing is a pretty easy step in the right direction and helps to aligns the stakeholders.The drug company only gets paid if the patients get the desired outcome.
The current system is completely bonkers. Insurance company profits are capped at a fixed percent, so they want to drive costs as high as possible. Pharma Benefit managers get paid by insurance based on list prices, so they also want to maximize price. Lastly, the manufacturer gets paid by PBMs based on list price minus kickbacks, and obviously wants to turn a profit
> Nationalizing it will politicize pharmaceuticals. (and parties change control every few years of so).
That's easy to fix. Pass a law forbidding any non-progressive political parties from forming or having a say in government. What could possibly go wrong?
Considering how many politicians try to score votes through speaking against the HPV vaccine and how many lives are lost though entirely preventable cervical cancer, this kind of remark is completely unneeded. Statistics are here: https://www.cdc.gov/cancer/cervical/statistics/index.htm
You would think that's a big part of the problem, but some of these issues like:
- Pharmaceutical companies sponsoring/paying doctors to push their products
- Paying doctors to put their names on papers they haven't even written or reward for research they never actually did
- Companies that engage in patent thicketing and product hopping (drug companies abusing the patent system to hold onto market share and prevent any generic competition)
- Pharmaceutical companies engaging in price gouging tactics
That happens in countries with universal or semi socialized medicine too.
Obviously these are two different things. What I’m saying is whether or not healthcare is private or nationalized, the pharma industry in those countries are not nationalized (like say the way they were in the eastern bloc).
Agreed. I also think that there are certain endeavors (medicine, space travel, etc.) where we need global cost sharing. Why are drugs cheaper in Canada? A lot of the drugs that go around the world are paid for by the US middle class. This cost sharing also removes the need for patent protections as everyone is opted in and buys from the global source. Obviously there are more details to solve but I'd like to see this approach tried.
> Today, most pharmaceuticals are developed by the government. Private corporations take existing research and medicines, tweak them enough to be considered 'different', give them new names and then market them heavily to uncritical citizens, acting as parasites. [1][2]
There is so much wrong with that sentence, but it's written with such conviction and confidence that I think this reply is probably a waste of my time.
There is a huge amount of work, money and risk between government funded research highlighting a potential mechanism of action and actually getting a drug to patients. You can easily spend millions and years of work chasing down a promising project only to find out your drug doesn't work. Biology is really complex, most lay-people probably overestimate how much we actually understand. You can work decades in a pharmaceutical company and never see a project you worked on reach clinical trials, and even if you are lucky enough to get that far, it it has about a 10% chance of actually being approved.
To say all that pharmaceutical companies are doing is stealing and monetizing government research is demonstrating a real lack of understanding of how drug discovery works.
Source: worked in drug discovery for many years in both government funded academic labs and pharma.
If it is simple as copying from the government, then why aren't you doing it too? Why not take the existing medicine and resell it to the public for half of what everyone else is charging?
You would simultaneously be making a fortune, while at the same time being called a hero.
I’m arguing that they are creating an IP/patent war-chest and slowly but surely creating a fatal monopoly.
I’m saying corporations are abusing our common inheritance by plundering the commons and not contributing back to it.
“Information is power. But like all power, there are those who want to keep it for themselves. The world's entire scientific and cultural heritage, published over centuries in books and journals, is increasingly being digitized and locked up by a handful of private corporations. Want to read the papers featuring the most famous results of the sciences? You'll need to send enormous amounts to publishers like Reed Elsevier.
There are those struggling to change this. The Open Access Movement has fought valiantly to ensure that scientists do not sign their copyrights away but instead ensure their work is published on the Internet, under terms that allow anyone to access it. But even under the best scenarios, their work will only apply to things published in the future. Everything up until now will have been lost.
That is too high a price to pay. Forcing academics to pay money to read the work of their colleagues? Scanning entire libraries but only allowing the folks at Google to read them? Providing scientific articles to those at elite universities in the First World, but not to children in the Global South? It's outrageous and unacceptable. “
— Aaron Swartz
Big Pharma is standing on the shoulders of giants, but are biting the hand that fed them.
We have much shared wealth, but without open or public access, and cooperative business models that steward and keep a healthy commons alive, the trend towards extortion of the lower and middle classes of America by Corporations (through rent from IP) will keep increasing, as well as US brutality towards the Global South, in trying to upkeep the US-led Global North Imperial IP regime [1].
In that future, the class divide will keep growing and many more people will continue to suffer.
In the end, without sharing and socializing progress, we run the risk of the Precariat taking down the systems completely, and throwing the baby out with the bathwater.
I believe our ideal future lies in something described as Protocol Cooperativism, using distributed technologies like Ceptr and Holochain.
I would also like to see an unenclosed p2p intellectual property system that honors authorship, yet allows access for all [1].
You need to keep the politicians out of the pipeline and put physicians and pharmacologists in charge. It's more difficult in a country where the public service has been gutted for 40 years, but it has to be done.
Right now there is insufficient research in antibiotics and tropical diseases and far too much in cancer. The market isn't going to fix that misallocation of funds.
Big pharma excels at the subsequent stage: taking the best ideas generated by scientists and bringing them to market, using its huge financial firepower to navigate the complex regulatory environment.
If the government were to nationalize the industry, wouldn't the regulatory environment become simpler? Regulations exist because of the fundamental antagonism between profit-making and safety & efficacy. If the sector were nationalized, that would shift (and possibly diminish) that conflict.
Industry may well have expertise in the expensive process of ensuring safety and efficacy, but if that's made more expensive by having regulations thrust on it from outside, why not save the cost?
The core of FDA regulatory power covers issues like how much evidence is enough to declare a drug fit for the public, how bad can the side effects be for its intended purpose, how to deal with ethical questions regarding everything from patient welfare to clinical trials, and regulating all of the infrastructure necessary to carry out the former activities. None of that disappears just because you nationalize the industry because it's all infrastructure necessary to innovate in medicine without causing significant collateral damage. The FDA is particularly heavy handed due to that fundamental antagonism but all that work still needs to be done and it's really complex. A lot of it is done by contract research organizations, some of them in the billions of revenue themselves, and nationalizing the pharmaceutical industry would make their work even more important.
What I know is that the USPS is often the cheapest and easiest way to send a package. The number of services they offer outpaces FedEx and UPS. What I pay in taxes for public schools is magnitudes cheaper than the average private school tuition. The taxes I pay in exchange for access to nearly every single book for free is a helluva lot cheaper than buying a single book new or used. Paying for a ride of a public bus is a lot cheaper than uber or lyft.
I assume the cost of bureaucracy is what we collectively pay for in taxes. If what I pay in taxes for these public services is cheaper than purchasing these goods and services through for-profit vendors, I think I can safely say I do not get a similar cost in bureaucracy.
Additionally, even if these things were slightly more expensive than the "free market" I would be willing to pay more and help share the burden of ensuring everyone had universal access.
Private schools are on par with public schools ($10k/yr) for the same kind of school, with large class sizes. Expensive private schools are far better "product" than public schools with small classes and better extracurriculars and amenities.
Your property taxes are subsidized by taxes paid by non-school-families.
I'm confused by the first point. The USPS has a monopoly on sending packages and letters? I recognize the USPS is subsidized by the US government but that is exactly my point. They amount of real money I'm taxed that eventually ends up subsidizing the USPS seems to me to be less than the money I pay to ship using non-subsidized services. If the government is able use my tax dollars to "artificially" push prices lower than on the "free market" while ensuring that the service is available to nearly everyone in the country, that feels like a success.
Are you saying if the USPS didn't exist FedEx and UPS would be cheaper?
Bureaucracy is rarely as expensive as aggressive profiteering.
In fact the opposite is more likely. If pharma is nationalised - or better, internationalised - it would become economic to fund solutions for common conditions that aren't currently considered profitable.
> Bureaucracy is rarely as expensive as aggressive profiteering.
Have you seen the DoD and other gov entity contracting? Perhaps we can expect the same level of contracting that the DoD has today, outsourcing those expensive mistakes to others, for them to take the blame/fall/
I can see a situation where pharma bureaucrats refuse to approve or pursue things, because government mistakes are more unforgivable than business mistakes (where failure and experiments are often encouraged). I would expect more layers of approval/red-tape to develop as no-one wants to accept the blame of approving.
>> Bureaucracy is rarely as expensive as aggressive profiteering.
> Have you seen the DoD and other gov entity contracting?
DoD contracting seems like worst of both worlds: a combination of bureaucracy, aggressive profiteering, and rare real-world evaluation of the products.
I'm kinda surprised military production hasn't been nationalized. It seems like it's mainly done by a handful of companies that are almost wholly dependent on government contracts, and the government is loathe to steer too much work away from any of these entities in order to preserve their capability.
If the regulations are unnecessary, then why not dispense with them and let the free market work.
Surely you don't think government is more efficient than the market.
We've had appalling experiences with privatising critical infrastructure in the UK. Not only is privatisation almost invariably more expensive for tax payers and end users, and privatised companies reliably behave like bad actors, but privatised companies tend to continue to benefit from state-sponsored monopoly positions - because the cost of entry for national-scale operations is too high for start-ups.
For healthcare, a single price negotiated by a single state-owned org is hugely more efficient at reliable and economic service provision than any privatised alternative.
The only thing it's less efficient at is generating shareholder profits.
I think a lot of issues can be solved not by nationalizing the pharmaceutical industry, but by setting up a competing government funded drug company. What the drug company researches and what it charges for it's drugs can be determined by government policy. If done, it would be interesting to look at how efficient it was vis-a-vis the private sector and what drugs actually got developed at what cost.
I'd be fine with either, and I think it'd also help with price-gouging like Turing Pharmaceuticals engaged in with Daraprim.
A public drugmaker could be obligated to have implemented processes to manufacture every approved drug. If a maker engaged in price-gouging, or had its facilities disrupted, the public drugmaker could supply an alternative supply at fair prices.
I would like nationalization if it were split up into a research co-op with manufacturing contracted out to US companies. I would like to maintain some level of competitiveness but also have knowledge sharing across research teams.
> During last year’s election campaign the Labour leader, Jeremy Corbyn, highlighted patients being “held to ransom” by one manufacturer, Vertex, which was locked in a battle with the National Institute for Health and Care Excellence (NICE) over Vertex’s £100 000-plus price tag for the cystic fibrosis drug Orkambi.15 It wasn’t pretty, but it was resolved by negotiation, and the drug is now available on the NHS.
The interesting thing about this is the Cystic Fibrosis Foundation had to fund the research themselves in the small hopes they found anything. And then the drug was sold to a company for a good amount which will be used for ongoing research on Cystic Fibrosis. Now the CFF has a pile of money to persue better treatment. Perhaps what Corbyn should have said is these treatments are important so lets fund even more into CF research.
You could nationalize ownership of successful necessary drugs. Not dissimilar from eminent domain. Figure out fair market value for it, and then divide the cost over decades, instead of price gouging the first 7 years of customers. You dont need to nationalize the entire industry to control the intellectual property (and lets be real, that and regulation are most of the "cost.")
Turning something with only short term incentives into a long term payout is something government excels at. Government can afford to pay things back slowly without quarterly returns.
Private industry can still handle invention (possibly with NSF grants involved in initial production cost and testing, maybe leading to partial government ownership or a rebate during the eminent domain part) and production and distribution.
This proposal seems ill-founded. The idea that the public sector takes on the risk of early development is a misuse of the word ‘risk’. No funding agency ever thinks of investment in terms of financial risk. The money allocated to an individual project is extremely small in the scheme of things, and research budgets remain a small proportion of government spending overall. Pharma in contrast spends 8-20% of total expend on research. The long term trends don’t support this narrative either, with government spending becoming less important and privately funded research increasing [1].
How do you feel about the federal response to the corona virus? Do you feel like they've done a good job, or does it more seem like incompetent fumbling? And if it's the latter, why do you think they'd do better at running the pharmaceutical industry?
Unfortunately the pharmaceutical industry has become corrupt.
I don't know about nationalizing it, but something has to be done to bring the industry to heel. Please read Bottle of Lies, Katherine Eban's incredible new book about deadly corruption that has ravaged the generic drug industry. https://www.amazon.com/dp/B07JG49BQW/ref=cm_sw_em_r_mt_dp_U_...
Why not just creating a a national pharmaceutic company? Private companies would continue to exist and probably protest about unfair competition, but still it would be a good method to prevent them forming a cartel and at the same time invest in much needed but not lucrative meds.
The pharmaceutical
Industry is not the problem. Nationalize the middlemen who are taking 2/3 of the profits and you’ll normalize the American market overnight.
Nationalization will only destroy the system that produces life-saving medicines. We have seen it over and over again with other industries in other countries. Priorities change for capitalized companies and eventually, the golden eggs that are the medicines will stop.
The problem is that these companies have the wrong incentives and are producing products where they think they can get the best profits.
This is where government policies will help.
Governments need to give tax credits for drugs that are needed and support the development of low-cost alternatives to expensive life-saving drugs.
The Orphan Drug Act of 1983 has been responsible for the development of many drugs that would never have been developed without a few government incentives. We should learn from that and apply it to other drugs.
We bitch about farmers getting lots of help from the government but the result is that we get basic foods at a very affordable price. We can learn from those policies and apply them to pharma.
The capitalist system works. But governments need to change policies to tweak the system so that companies develop what we need at an affordable price.
Now this would be actual capital S Socialism. I'm surprised to see this advocated here
Tangentially related: Bernie Sanders should stop calling himself a socialist, partly because he's never actually advocated for nationalizing industries (redistributing the means of production to the "peoples state"), and partly because it's so damn unpopular with the electorate to call yourself one.
> Now this would be actual capital S Socialism. I'm surprised to see this advocated here
I'm just surprised to see it related to anything other than social media. It seems like every week we get a new article calling for the government to take over Google, Facebook and Twitter and force them to be "public carriers."
AFAIK, Bernie advocates for Nordic style "social democracy," which isn't "capital S Socialism" per se, but I agree that Americans who tend to see anything to the left of laissez-faire free markets as just different shades of communism might not grasp the nuance.
Still, for someone who should be so damn unpopular, Bernie and his socialism seems to be pretty popular. Just not with his own party, unfortunately.
I have some background studying Russian (including Soviet) history (a semester class on Stalin, other reading, etc); we can observe what is happening to Venezuela, and many other cases where it sounded good, to someone, to make things better by more government control. I have experience dealing with Medicare (USA) (details at http://lukecall.net/e-9223372036854586100.html ). And (I hope) some grasp of the underlying principles involved of freedom vs. control, allowing mistakes vs. severely stifling everyone.
All of which most strongly persuade me that nationalizing more health-related things is a really bad idea. It prevents us from doing more good otherwise, in the private sector.
My opinion is no. Share buybacks should be taxed as dividends. Tax credits implemented for capital expenditures. Pharma patents should be subject to export control. Nationalizing anything exposes it to the risk of flippant regulation and pressure from the executive branch. Imagine if Trump had the power to dictate which drugs were produced and researched.
I have never met a government employee or contractor that believes that nationalizing ANY industry will result in increased efficiency. Anyone that has ever spent any time in the industry usually spends the first few months of their career trying to figure out of the organization can really be as inefficient as it seems.
Letting government run something _may_ result in a more egalitarian distribution of fairly shitty service (see USPS, VA Health Care, etc.) but it absolutely will not result in a more efficient system.
> Letting government run something _may_ result in a more egalitarian distribution of fairly shitty service (see USPS, VA Health Care, etc.) but it absolutely will not result in a more efficient system.
The US pays at least 2x more per capita for health care than pretty much any other country on the planet. And I have never seen it even close to top-ranked in any health care quality statistics.
No. First, it is unethical, and the antithesis of this countries founding principal concerning freedom and free market forces. Remove the barriers to entry and competition that government created, they have enabled the monopolies that drive up drug cost. Holding the politicians and special interest that lobbied for them responsible would be great as well.
The power of the pharmaceutical industry comes from artificial monopolies in the form of patents, approvals and import restrictions. Since the public funds the initial research anyway, those limitations can be reduced until competition exists and medicine is once again affordable.