"So "better care for people who can pay more" is a better system?"

Don't phrase this as an alternative - those able to pay more can still buy themselves better care, they're being denied nothing except to watch the poor die of illness: https://en.wikipedia.org/wiki/Private_medicine_in_the_UK

You're right. A better way to phrase it is this:

"Health-care quality in proportion to wealth" -- the poor get worse care because they can't afford to pay for gold-standard care.

This is OK as long as there is a sufficiently high floor on the quality of service that the poor receive. Someone has to pay for the advanced treatments, drugs, machinery, and training.

> This is OK as long as there is a sufficiently high floor on the quality of service that the poor receive. Someone has to pay for the advanced treatments, drugs, machinery, and training.

Yes, and that "somebody" is the US. Drug prices are high in the US because the US is responsible for funding the the majority of medical and pharmaceutical research for the entire world. Countries like the UK benefit from the research that is being paid by the US, while not actually having to find the R&D that goes into it.

"Drug prices are high in the US because the US is responsible for funding the the majority of medical and pharmaceutical research for the entire world."

A statement entirely unsupported by data. If pharmaceutical companies spent on R&D only the money earned due the inflation of US prices, they'd still have plenty left over: http://healthaffairs.org/blog/2017/03/07/rd-costs-for-pharma...

You could just as well say the US funds the majority of drug advertising for the entire world - they spend more on ads than R&D: http://www.bbc.com/news/business-28212223

Not to mention everything from vital new medicine, to reproducing generics of other companies, and drug reformulations to prolong patents, gets thrown under R&D. If you only count the R&D spending that's not done solely to steal market share from other companies, the ads vs. R&D ratio is even more dire.

So given they post more profits and more ad spending each than R&D spending, at what point would it be okay to stop raising drug prices? When profits are >10x their R&D?

You seem to be interested in arguing the statement "Pharmaceutical companies in the US spend too much on R&D".

But that's not equivalent to the statement "The US provides the funding for the majority of R&D that the rest of the world benefits from".

If you think that pharmaceutical companies should spend less of their money on R&D, or more on it, that's not really relevant. Whatever research pharmaceutical companies are doing, that's being disproportionately funded by the US market. That's a plainly evident statement; it's right there in their financial sheets.

> You could just as well say the US funds the majority of drug advertising for the entire world

No, because research is a wholly non-excusable good in the global market. Advertising is not.

> they spend more on ads than R&D

Again, not really the point.

Sounds like as long as they spend some portion of their revenue on R&D, you'll argue inflated drug prices are good and necessary.

> Sounds like as long as they spend some portion of their revenue on R&D, you'll argue inflated drug prices are good and necessary.

Again you're looking at the wrong denominator (fraction of spending spent on R&D, rather than fraction of R&D spending that's funded by the US).

Furthermore, I never made any claims about "good and necessary". It looks like you're interested in having a discussion about a different topic altogether, rather than the original statement.

> US is responsible for funding the the majority of medical and pharmaceutical research for the entire world

I believed this until very recently. I had a long discussion on Facebook with some friends in medical research and public policy. I learned that only a fraction of drug costs are due to this issue.

Furthermore, slightly less than 10% of all health-care spending in the US is on drugs.

It's an issue, but it's a relatively smaller one than I'd thought, and it's not as clear as "the US subsidizes other countries."

> I believed this until very recently. I had a long discussion on Facebook with some friends in medical research and public policy. I learned that only a fraction of drug costs are due to this issue.

Literally 50% of medical research in the world happens in the US, and even more is funded (indirectly) by the US market. In the last two years, that number has dropped slightly below 50%, but only because of rapid growth in China and India.

This is all medical research, not just pharmaceutical research. But yes, it is actually responsible for the bulk of drug prices in the US, through a combination of both direct and indirect effects. Even pharmaceutical companies based in Europe still use the US as the primary source of funding their research.

Pharmaceutical companies reap their profits from the US because that's where it's easiest to do so, and because the US is the largest non-developing country. If, overnight, the US capped drug costs[0], a combination of two things would happen: pharmaceutical research would drop dramatically (some would move to China and India, but some would just exit the industry) and drug costs in other developing countries would skyrocket.

Or in other words, for the US to pay less in drug costs, other developed countries have to be ready to pay more, and the world has to be ready to accept a decrease in medical research.

> Furthermore, slightly less than 10% of all health-care spending in the US is on drugs.

That doesn't contradict the original point; that's just looking at a different denominator. And again, this is all medical research, not just pharmaceuticals.

[0] ignoring for the moment the mechanism of doing so

In a time when it is seriously proposed by high-ranking elected officials that e.g. South Korea pay for its own military defense, I think we can consider UK paying for its own drug research.

> consider UK paying for its own drug research

Because the UK is single-payer, they have enormous negotiating power -- and they use it[1]. They force drug companies to give them low prices, which means the US indirectly pays some of the costs of the research.

However, drugs can be very profitable, so you could just as easily say that all the countries share the cost of the research, and the US subsidizes the profits of the private companies.

1. https://qz.com/509344/the-way-to-fix-outrageous-drug-pricing...

> However, drugs can be very profitable, so you could just as easily say that all the countries share the cost of the research, and the US subsidizes the profits of the private companies.

Sure, though only if you assume that the companies would pursue the same research and achieve the same results without a profit incentive.

Except, we have pretty clear empirical evidence that that isn't the case. The overwhelming majority of both medical research spending and clinical medical discoveries come out of organizations that pursue a profit motive. That's true globally - it's true in the US, in Europe, and in China and India.

And even then, you can't say that companies "share the cost of research equally", because there is literally no objective metric under which European countries pay an amount of research proportional to how much they consume. Even European pharmaceutical companies obtain the bulk of their research funds from the US market.

>>> Even European pharmaceutical companies obtain the bulk of their research funds from the US market.

Stop spreading nonsense. This is easily verifiable information and very easy to disprove.

Take Norvatis for example:

https://www.statista.com/statistics/294631/novartis-revenue-...

The US is definitely not the "bulk" of revenue for these companies. A big market? Sure. But nothing special when compared to other rich countries if you take into account population and wealth.

> if you take into account population and wealth.

Yes, if we normalize by the things we're measuring, we reduce the observed effect... but that's a statistical tautology.

For example, take Western European country prices as a reference point, and assume that the difference in price to the US is entirely an excess premium. That's already a dramatic overestimate, because it assumes that the prices in Europe would still be as low even without the US market, which we already know is not the case.

In that case, Norvartis earned $8.6 billion from inflated prices in the US in 2015. And in 2015, their entire R&D budget was $9.9 billion, on a net income of $6.7 billion.

In other words, if US prices were magically brought down to European levels, Novartis would somehow have to find another way to make up a sum of money that accounts for almost their entire R&D budget.

And even if you assume that the second largest pharmaceutical company in the world would operate the exact same way without an explicit profit motive, without the inflated prices in the US, they would literally be losing money.

> Stop spreading nonsense.

From the Hacker New Guidelines:

> Be civil. Don't say things you wouldn't say in a face-to-face conversation. Avoid gratuitous negativity.

Come on dude. "Stop spreading nonsense" reads pretty tame to me. Certainly nothing worth subjecting us to a scripture quotation.

A country can't really pay for it's 'own' drug research unless that research is never shared or the drugs never made available outside that country. Unlike defense, which requires physical presence in a place, once drugs are created and researched, the cost of production is often very low. With defense, the cost of organizing, training, and equipping troops will never go away.

That is true for literally anything, from food, education, jobs, lifestyle, etc. Why would just health-care be so different to all those other necessities?

Education, jobs, and lifestyle aren't necessities. That's how health care is different.

And I do believe people need to have food. Every developed country agrees, which is why there are welfare and food programs. They're inadequate and often leave people behind, but the goal is that no one dies just from being poor.

> Education, jobs, and lifestyle aren't necessities. That's how health care is different.

I disagree. Lifespan, quality of life and health all depend on all those.

> And I do believe people need to have food. Every developed country agrees, which is why there are welfare and food programs. They're inadequate and often leave people behind, but the goal is that no one dies just from being poor.

Sure, but not any kind of food at any price. The equivalent would be basic medical care, not advanced cancer treatment solutions.

I personally resist the idea that any human life is of infinite value, since it conflicts with the basic reality that economically, we trade some lives for others. Reducing cost is fruitful for everyone but the traders and professionals: supporting any cost as a right is fruitful for the traders and professionals and the recipients at the cost of the givers.

And in reality, the givers tend to be the poor more frequently than the rich.

> If anything should be socialized, it's health care. No one should die because they weren't born with the opportunity to work a high-paying job or accumulate wealth.

I understand the sentiment but that is simply not true. If someone gets cancer and requires the lifetime work of 10 people to survive, then guaranteeing that treatment for everyone would be have very negative results.

Life does have a value and a cost, and its not worth spending great amounts of achieve little results. 1000,000U$S might save the lives of a lot of people, but 1000,000U$S cancer treatment might just prolong the life of a single one.

> If someone gets cancer and requires the lifetime work of 10 people to survive, then guaranteeing that treatment for everyone would be have very negative results

1) Living people are taxpayers and consumers. Dead people are not.

2) This is the whole point of insurance. Very few people will be very expensive and most people will be relatively inexpensive. With preventative care and the advancement of research, fewer people should be expensive over time.

Regardless, the US, as a society, has more than enough money. There's no reason for someone to buy his second $50M yacht while someone else dies of the flu because they couldn't afford the $25 vaccine.

3) You can make these hyper-rationalist arguments, but the vast majority of people are willing to pay a lot of money to live in a society that doesn't just let them die of something curable.

I genuinely believe that people who are uninterested in the social contract of the US or other developed nations should be allowed to "opt out" of society: the citizens of the nation will pay for transport to any border of the country, and then citizenship is permanently lost.

> 1) Living people are taxpayers and consumers. Dead people are not.

In the example above, you get maybe 5 years + taxpayer+consumer - 10 lifetimes, which is a deficit both for taxpayers and consumers.

> This is the whole point of insurance. Very few people will be very expensive and most people will be relatively inexpensive. With preventative care and the advancement of research, fewer people should be expensive over time.

Basically everyone needs some sort of medical care. True, the most expensive cases are rare and they befit insurance, but medical costs are normally not about insurance. Checkups, dentists, basic clinical appointments, etc are not great cases for insurance.

That is, hard diseases can be convered by life insurance, without the need for socialized healthcare for the rest.

> Regardless, the US, as a society, has more than enough money. There's no reason for someone to buy his second $50M yacht while someone else dies of the flu because they couldn't afford the $25 vaccine.

This is a typical rabbit hole argument where it turns out nobody wants to donate their salary until they reach the lowest percentile of income to make it fair. Because who are you to spend your money on a vegan deluxe burger when people are dying of malnutrition!

Blaming rich people for hardships is akin to blaming immigrants for it, on the other side of the political spectrum. They guy with the 50 million dollars did not make the rest poor, in fact its possibly the exact opposite.

There is a lot of ideology in the mere presentation of that argument, i fear this can take a bad turn :).

> You can make these hyper-rationalist arguments, but the vast majority of people are willing to pay a lot of money to live in a society that doesn't just let them die of something curable

I somehow doubt thats really true, otherwise it wouldnt be a debate at all...

> I somehow doubt thats really true

See: Europe. High taxes, strong social safety net. The "debate" is a minority of highly vocal people.

What do you mean wait times are lower? Waiting once you get to the clinic or the multiple months you need to get the appointment for the specialist?

I provided a source that answers your question.