But if that's the case, it just seems like really good evidence that squeezing drug companies and making aggressive demands drives down drug costs and encourages them to move R&D costs out of the country. Why wouldn't the US be all over that?
I dunno, I just always feel like I'm missing something when I see this. Other countries have better health care than us, but we can't use their tactics, even though they seem to be working really well, because... we're nice, and we don't want their drugs to cost more?
If we accept that having R&D based out of the US is a bad thing, then why are we fighting to keep it here? Shouldn't we increase regulation until all the pharmaceuticals move to Canada?
Through reading up on the 'opioid epidemic' you realise that a lot of this 'innovation' is not that great. Slow release tablets? There is no big deal there. Furthermore a lot of this 'research' is backwards, i.e. create a molecule that can be patented, see how much of it kills rats and then try and find some medical benefit for this 'new molecule'. If it treats cancer then is that because it kind of prolonged someone's life by a week even if the others in the trial were essentially killed by the 'new molecule'?
This went on with AMGEN and Johnson + Johnson with the EPO drug that Lance Armstrong so enjoyed. They sold this drug into many, many 'off label' side markets - could the same molecule be good for stroke victims too? No trial data, but with profits to be made this sort of thing happens.
You can market a drug a dozen ways even if it is only paracetemol. Back pain? You can buy this tablet. Hangover? This one mixed with caffeine. Kids version? Brightly coloured with a lower dose per pill. Easy.
Then there are those drugs sold with the 'dating website' business model. The 'dating website' business model is to have a few success stories but have everyone else paying their subscription as long as possible. Statins are sold like this, the Big Pharma scam is to have people on these things for life.
The rest of the world - Canada included - care about healthcare more than money. In the UK healthcare is a service, not a business first and foremost. The NHS has to balance the books but not be putting profit before people. In the US it is backwards.
The rest of the world would do better without U.S. Big Pharma stifling innovation and sponging off their citizens.
[1] The effect of statins on average survival in randomised trials, an analysis of end point postponement
the last numbers I saw, 2015, showed marketing budgets for medicine to be often times twice what was being spent on R&D in the US. currently, only four countries allow this time of marketing: New Zealand, Brazil, Hong Kong, and United States.
it sounds like the US isn't necessarily subsidizing drug R&D, and instead is subsidizing marketing.
The marketing expense isn't necessarily avoidable.
Suppose it costs $50M to research a drug and patients will pay $1000 for a course of treatment. If you do no marketing then you get forty thousand customers and can't recover your R&D. If you spend $100M on marketing then you get two hundred thousand customers and more than recover both your R&D and your marketing expense.
Spending more on marketing can allow them to do R&D they otherwise couldn't by providing more customers to spread the R&D costs over.
I don't know if it's true or not, but looking at US movies/tv shows it seems like everyones taking medication which I doubt they actually need. Here I don't know very many people who actively take regular medication, I know that people who move here complain at how doctors are stingy with prescriptions, yet life expectancy is longer than the US.
That's true for very few physicians. The ones that are leaders in their field and do research know the ins and outs of new drugs, but your average doctor knows very little.
And in case anyone was wondering, doctors are very skeptical of drug reps and always verify anything they say before believing it. But it gives them a starting point.
It's not exactly the same as pharma, but in the medical device field salespeople are commonly in operating theatres. Clearly the surgeons doing this do not have time to "verify" what they are being told. https://www.washingtonpost.com/national/health-science/why-i...
Americans would do well to stop idolizing doctors and realize that huge numbers of them are lazy, incompetent shills who routinely do a lot of preventable damage.
Let's take this from the other side. Suppose we prohibit the marketing.
Now you have to amortize $50M in R&D over 40,000 patients instead of 200,000. So a course of treatment can't cost $1000, it has to be more than that.
Cutting out the marketing expense makes the price per patient go up.
One of the reasons why the US spends so much more than the rest of the world is because of the share amount of prescription drugs that people have. Here it's extremely hard to convince a Dr that anything other than paracetamol and rest is required for most ailments, yet life expectancy is higher than in the US.
Yes, if the advertising is total bullocks that is what happens. But getting rid of the advertising still doesn't make the price of the drug go down for the people who actually need it.
And it's at least theoretically possible for the advertising to help patients who otherwise wouldn't have known about the drug, e.g. because they asked a doctor about it years ago and there was no treatment then even though there is one now.
edited to add: especially when you look at the US R&D tax credit, available under section 41 of the tax code.
I'm sure Johnson & Johnson does spend an awful lot on marketing drugs, but boy do the details hidden in SGA sure get hand waved away.
Also, pharma increasingly buys new products through acquisitions rather than develop them in house these days. So you have to look at the balance sheet, not just the p&l. Note that JNJ spent $30B buying actelion last year among other smaller acquisitions
Second, marketing is costly since a lot of it is done in person. Hiring thousands of sales reps doesn't come cheap. It's not due to DTC commercials since only a small number of products actually have those.
Finally, you don't market something unless you bring in more money than you spend. So marketing pays for itself.
Don't blame other countries for your own governments inability to bargain.
Pharma companies still have patents and exclusivity deals. They will price the drug at a point where it's profitable, and countries will buy those drugs if they work.
Who do you think would get a better deal?
And they do negotiate hard! United healthcare has over 100 products on it's exclusion list which means they told the drug company "no, we won't pay for your drug."
Trump want's the rest of the world to pay more for US pharmacuticals by stopping the free market (which is how those countries get good deals, by going out to tender), but he doesn't want to do anything to make things better in the US because of the free market.
Also given a capitalistic marketplace you'd think US drug consumers would also band together to bulk purchase and drive down the rates. You'd be crazy to make a law to prevent that kind of thing.