> If my choice is to pay for cancer treatment or die, you can (and do) charge me literally whatever you want in a capitalist system.
Erm, no. Because if people can't pay for it, then your drug get no sales, and you lose your investment. The problem right now is that there are several payers involved and nobody sees the real cost of things. Were you to pay directly for drugs from your own pocket without intermediaries I'd wage all drugs would be way cheaper.
Tell that to your $600 epipen. Seriously. Canada doesn't even have socialized drug insurance for prescriptions and it costs $100 and in the UK $38. Drugs would be, in a perfect system with no socialist intervention, priced at whatever value they provide you. If that's your life, it's very expensive. There's no room for mercy in capitalism.
There's a reason Sovaldi is $84,000 and it's not because it costs a lot to make. It's the same reason as soon as they realized that you could treat cancer with Thalidomide the price rose two orders of magnitude.
this is not how prices work. consumers only pay the maximum they would be willing to pay for a good when there is only one provider. when there are multiple providers prices are pushed down to the cost of production. or so the theory goes.
* caveat: Assuming no power disparty between buyers and sellers.
If you need something more than the seller needs your money they're free to adjust the price up no matter how many of them there are. For instance, a hurricane comes in to town. All of a sudden, every gas station is charging $50/bottle for water and $10/gal for gas, even though the market is no more or less competitive than the day before when they charged $2.50. Externalities matter. Gouging like this is illegal in the event of bad weather but it's the status quo in the event of bad health, and much of the time, you exert equal control over both. The only real difference is one tends to skew acute and the other tends to skew chronic, I guess.
Sure I get the theory and I actually buy into it. However I’ve been on this earth long enough to know that theory doesn’t match reality a lot of the time and that’s when then the government should step in and right the scales.
> Canada doesn't even have socialized drug insurance for prescriptions and it costs $100 and in the UK $38
It's kind of easy for a country to dictate drug prices when they had no hand in developing them. Now show me a country like the US that develops just as many drugs. Ah, you can't, there is none.
You really aren't making the point you think you are. We are talking about a drug discovered (Poland) more than 100 years ago, isolated (Japan) more than 100 years ago, synthesized (England, Germany) more than 100 years ago. Then wrapped in a device basically developed by the US army in the 1970s. So how does letting an mostly uninvolved private US company set prices arbitrarily lead to more of this sort of development? For completeness, I'll note Merck did real work in improving the delivery mechanism (after a couple of recalls), but the heavy lifting was as above. Merck is of course German, not US, but it went through one or two US companies before landing there, if I recall correctly, and then Mylan acquired marketing rights in the US. Without new development, Mylan ran the price up about 6x over the 2009-2016 years (to a margin of about 95%) , which is what caused all the pricing fuss.
More generally, while I know what you are getting at you have to be careful with this sort of statement "this is the only way to do the drug development" is a pharma industry talking point but it is largely bullshit (although not entirely, the model run in the US does make it quite expensive and that can't be fully supported the way it is on, say, generics pricing).
It is true that the US is more productive in this space per capita than most places (but not as much as many think) , but it is really difficult to determine if this is primarily due to fundamental capacity, or due to financial incentives...
And check where these R&D spenders make the most money in the world. In the US. There would be no such level of investment if the US market did not exist.
Note, per capita it looks like most of the countries studied are discovering new drugs (in the study's terminology "new molecular entity") at much faster rate than the United States when adjusted for population.
The money quote:
" Our data suggest that the United States is important but not disproportionate in its contribution to pharmaceutical innovation. Interestingly, some countries with direct price control, profit control, or reference drug pricing appeared to innovate proportionally more than their contribution to the global GDP or prescription drug spending"
Denmark is so tiny compared to the US, it hardly makes sense to compare drug discovery per cápita. If Denmark happens to release just a single extra drug one year, it totally shifts their ratio.
Drug prices have absolutely nothing to do with where the drug is developed. AstraZeneca being Swedish never prevented Swedes from having a yearly out of pocket maximum at $120.
Roche, Novartis, AZN, Novo Nordisk, Sanofi,GSK and on and on. You could hardly pick a worse sector than healthcare to make this kind of nonsense America first point.
why does the healthcare discussion always regress to capitalism vs socialism? everyone cites canada as the ideal model of social healthcare but forget to mention the long wait times and the fact that their population is only a fraction of the US. i think our system could use some tweaks but throwing it out altogether for a socialist program is not it.
No we cite the entire OECD except America each of which rank higher in healthcare quality by WHO standards and cost at most half as much. It’s like a poor student saying “just because I’m the bottom of my class doesn’t make me dumb” — in a way, no but in a much more relevant and important way, definitely. It shows relative to your peers you suck at the task at hand.
It comes down to this debate because the pro market people offer zero solutions other than staying the course and the course is straight down. Offer something better.
> the fact that their population is only a fraction of the US
I don't understand why that matters. But if it does, couldn't the US implement social healthcare at the state level? Canada and California have roughly equal populations, for instance.
They totally could but for some reason no state does... Instead, I only see senators, representatives, and potential presidential candidates trying to force it upon the entire country. We are the united states, let individual states start the process and let it bubble up to the federal level once enough states enable it just like we are doing with marijuana laws.
IMO, the federal government has been getting too large just like how they dangle interstate highway funds from states for enforcing the stupid 21 year old drinking age.
> They totally could but for some reason no state does
No state alone can, because it would have (or at least would fear) a large influx of people coming for the free healthcare. If enough states set up their own systems and make them interoperable, it might have some legs. I hear rumblings of this from time to time,
What I meant was a federally-mandated, state-implemented system. Federal law can define a minimum level of healthcare that every state is obligated to provide. States set up and administer their own systems, any way they want - single-payer, mandatory private insurance etc. Isn't that how Canada actually does it?
It handles the "US is too big" objection to universal healthcare that everyone loves to bring up, by moving the systems to a lower level.
Erm, no. Because if people can't pay for it, then your drug get no sales, and you lose your investment. The problem right now is that there are several payers involved and nobody sees the real cost of things. Were you to pay directly for drugs from your own pocket without intermediaries I'd wage all drugs would be way cheaper.