I suggest that we should give merek the for profit monopoly, but allow for non profit manufacturing. If another organization wants to make the vaccine but not derive profit from the process, let them.
Manufacturing takes time and money to develop. Revenue should pay for those costs. The non-profit gains experience, but no profit. The for-profit gains profit. If the for-profit decides to raise prices too high, there will be a willing and capable competitor waiting in the wings.
The book author’s expected profits would plummet as it would be the wild west in production.
What you’re really saying is “we should pay massively less for vaccine development”. Which again, sounds nice, but....why would anyone have developed a vaccine? It’s a complex project which costs billions and has taken 12+ months while taking resources away from competing projects.
The public money is an incentive to get people to put those considerations aside and devote all their resources to vaccine development. This is a sensible public investment in a return to normalcy.
Certainly some of those are new uses for existing drugs, but drug trials ain't cheap either.
Often repeated, but the data doesn't bear it out, especially in aggregate.
https://www.raps.org/getattachment/5578195e-ed51-4f03-8adc-c...
https://www.raps.org/news-and-articles/news-articles/2019/7/...
Rant. Prime time TV is now pharma pushing their drugs with the occasional programming jammed between the ads. All those ads are coming from their extreme markups. Placebo and manufacturing artifacts aside, a molecule is a molecule, buying generics should be the default. It is bad enough, but the real disgrace is pharma salespeople masquerading as GPs prescribing meds according to who is sponsoring them. Instead of telling people about the active ingredient they send them to buy BRAND. At least this is my experience in the 2nd world.
Not-for-profit manufacturing would have to be done by the government itself, wouldn't it? Otherwise, what other entity would and could actually pay to set that up?
Now we can disagree on term length, but, a temporary monopoly to a company is what a patent is defined as and lasts 20 years.
My proposal is to have a company parallel develop processes so we can have competitor after expiry immediately. The competitor can't profit from it, but it can do work at 0 cost.
Why is the corporate "right to make profit" sacrosanct when nothing else is?
This is a clear case of Eminent Domain. All mandated, mandatory, Covid-19 related products must be offered at cost, or even better, we should just nationalize drug companies. We're all in this together and companies need to adjust to "new normal" as well.
Then there is the logistical effort of manufacturing the vaccine at the scale and speed required. There are huge capital investments and risks associated with doing that. If a company wants to do that and seek the profits from that, great. Literally everyone comes out ahead. You, me, the government, the manufacturer, distributor, and every other business or person in the economy.
What is the alternative? We create a government agency that specializes in manufacturing and distributing pharma products?
Many governments have proven that they will put the public's need over these companies need. They've broken patents and pressured companies before and they will obviously do it again.
There are more governments in the world than the American one.
For now speed is of the essence and this it's wonderful news they've set another step.
Yes. Why don't you think that would work?
We can't educate our kids at an acceptable level without billions of dollars being donated on top of all the tax collected, we can't figure out how to make medicare work responsibly despite literally being able to control costs, what do you think makes drug manufacturing any different?
If we as a people collectively agreed that we are as smart as other countries, there’s no reason we can’t have a functional government that can handle public education and vaccine efforts and keep us safe and maintain our infrastructure and everything else we expect our government to do for us.
School funding happens at the state level too, not just the federal grants.
Chicago is in Illinois, which has had a lot of flip-flopping between red and blue governors and has an infamous history of governors going to jail for corruption.
Also I'm not claiming that Democrats haven't done shitty things. Daley bankrupted Chicago and privatized a lot of our public services while running as a Democrat and some of those jailed governors were democrats, but I do think the GOP is more homogeneous in its efforts to break down the government. I mean privatizing everything is a platform they openly campaign on!
If your claim that prosperity has nothing to do with who is in charge were true, we wouldn't see a pattern of blue states outperforming red states economically or a national pattern of economic growth after a democrat president and decline after a republican president.
Coincidentally, I live in Chicago and used to live in California. People love to use both places as punching bags when talking about national problems, despite one being a state and the other a city! It's different types/scales of problems.
And why hasn’t California added free public education or expanded housing in the last 20-30 years then?
Plus, democrats are conservatives, so, it's not like they're automatically leftists just because they're blue.
No, there is not free public education anymore so in California than Texas.
> It's worth pointing out that there are literally millions of Trump supporters here
Don’t try to blame them. They have no power at the state and even the extremely Trump-devoid Bay Area (iirc <10% support) has failed to offer anything approximating a solution to housing or good education. The answer to shitty schools in the bay was a lottery to make sure everyone got to suffer the shit, rather than you know... fixing the shitty schools.
worked just fine for penicillin during world war 2
Edit: german Wikipedia suggest that the contraction is only expected to be 3% but because of the numbers involved even that doesn't really matter for the argument.
Hopefully there is some other significant differentiating characteristic or attribute to justify this state of affairs between society and big pharma, that would distinguish it from the same analysis you would use to pay a ransom or protection fee.
We are talking about a company providing a service. They might not have invented the vaccine but they are providing the means to bring it from proof of concept into mass production. The commenter seemed to think that this isn't worth money.
I argue that you get quite a bang for the buck.
My larger point is that for-profit pharma/healthcare is not a healthy marketplace (... or at best, it's an immature one). In the not-so-distant past (in America, up until the Civil War or thereabouts), firefighting was mostly privatized (meaning not government-run) [0], and brigades would compete (literally sometimes fighting in the streets, covering the hydrant to impede rival brigades, etc.) to claim the prize of the insurance payout for saving a building [1], which doesn't really serve the interests of the victims of fires.
I think the incentives of for-profit firefighters are not all that dissimilar from the incentives of modern pharma companies today (i.e. pay us to save your building from this fire, vs pay us to research this vaccine), and I would hope to evolve this pharma industry and this marketplace (of "demand" for life/health, vs "supply" of pharma research and resources) into something more mature and with fewer perverse incentives in the long-run.
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[0] https://en.wikipedia.org/wiki/History_of_firefighting#United...
[1] https://en.wikipedia.org/wiki/History_of_firefighting#Modern...
In the case of farm subsidies it’s grown to the point of being actively unhealthy both in economic terms and the actual root cause of the obesity epidemic. Without sufficient calories you can’t have an obese population due to physics. Medical subsidies have resulted in a host of related problems not just in economic costs, but also in what research gets done and how efficient that is.
The cost of Medical studies in the US has grown wildly out of proportion because their a profit center. This perversely slows down the rate of medical research, even in the case of emergencies like covid 19.
Sure you can, you just have starving poor people too.
It’s very possible for some percentage of the population to starve even during a food surplus, but starving people will bid up the cost of food to the point where you can’t get a 40% of the population to have a surplus in a famine in any society that we know about.
Here is the official definition for the minimum to qualify as a famine:
“At least 20% of households in an area face extreme food shortages with a limited ability to cope The prevalence of acute malnutrition in children exceeds 30% The death rate exceeds two people per 10,000 people per day“
That’s killing off over 7% of the population per year.
On average your looking at ~90B in net profits from farming, the subsidies however are much harder to track down. Ethanol subsides for example are often excluded as are insurance, tariffs etc.
There are a lot of ways to slice this up. “Overall agricultural subsidies in 2010 were estimated at $172 billion by a European agricultural industry association; however, the majority of this estimate consists of food stamps and other consumer subsidies, so it is not comparable to the 2005 estimate.” https://en.wikipedia.org/wiki/Agricultural_subsidy#United_St...
One example of this is Americans for example pay 3 billion dollars more for sugar than international market rates. But, only a fraction of that directly ends up in farmers pockets. You can either take the full 3 billion as a government subsidy or exclude most of it. Similarly, propaganda and what’s allowed in food lunch programs gets tricky.
So, I am not endorsing any specific estimate, just saying the total industry profits are approximately the same as the total subsidy. Add up just direct federal subsidies gets you lower numbers especially if you try an exclude state, ethanol, R&D, loans, Education, tax breaks, and other less obvious handouts.
PS: Silly me, I forgot about all the little exceptions in environmental, immigration, labor laws, use of federal lands, etc.
Edit: people don't seem to understand that there are several stages in pharma development... (1) research, (2) trials, (3) scaling production. It sounds to me that even if (1) and (2) are "paid for" (with public money), (3) is still non-trivial and therefore expensive.
No one is claiming otherwise. And back to normal is still a long ways off.
If you’re admitting we’re giving them money for a thing, it’s paid for. I don’t know why you quote it like that, transfer payments of public money to private institutions is a thing, is it up for debate it happens?
Also cost is emotional. Does it have to be 20 billion or is the government handing out cheddar for consulting jobs later?
There’s more too it than high school capitalist theory. Just because you can’t for $20 billion doesn’t mean someone else couldn’t for $5.
But we hide the work in private accounts. Humanities work, built towards by countless hands and minds.
Yeah ok we get it, Murray Rothbard; You’re only 1 in 7 billion. Why does your theory matter? Roll up them sleeves. What? He’s dead? In the bin with it, no need to carry water for a dead man.
And "we" are already paying for it. Let's not let them double-dip.
These things cost money, and you assume your taxes are covering them in full. They don't.
Developing vaccines is a long, treacherous journey on a narrow ledge with cliffs on either side from start to finish. Infectious diseases research has seen a sharp decline in funding and commercial interest in general. Because of how little we know about the body, most research doesn't generate results that can be turned into money. The only way to continue to support research is via public funds and grants. The public funding of science has been a major contributing factor for our advancements in this kind of research.
This kind of thinking is worrisome to me. It sets a horrible precedent. Previously in times of war private business would be forced into helping the people fight a common enemy. These days a war on a virus has zero help from business and they essentially have a position of power to sit on their hands taking billions of public subsidy and then take the people's money and effort for their own.
Why do we take this with such apathy? Why is it that a country run by the people for the people has no power in the populace hands? We are doing everything we can to help, committing billions of dollars which represents millions of hours of public production to solve a problem that CEOs only want to assist in if they can up their share price.
Since we care so much about our health and the health of loved ones why have we not used these unprecedented times to reform the healthcare industry?
We are paying twice for this. Once to fund the research, which we then give away, and then again for the manufacture and distribution which is priced as if the pharma did all the research. These vaccines are going to cost anywhere between $15 and $37 a shot. You cannot tell me that's how much these vaccines cost to make in quantity. Why is there any profit at all? Let's get ourselves out of this shit without encumbering any more debt on top of an economy that is already falling into a black hole.
This stuff is morally corrupt, and to say 'who cares' makes me sad. We should care, maybe we accept the shit we have, but we should care about it. This stuff should be criticized, we should use our agency to change what is wrong, not to support it.
Every day I fear we are all fucked. This sort of thinking is why we deserve the likes of Trump and Boris. We bring this crap on ourselves and then moan about it.
You talk about getting back to 'normal', well we slowly sold normal. These decisions do not have zero impact on the future, they affirm a shitty attitude and set the path for future generations who won't know any better.
/rant
Let them make a profit when we are thriving not while everyone else is suffering and making sacrifices.
I know a lot of people, Americans in particular, are weary of 'big pharma' and for-profit healthcare. And Americans have good reason for that mistrust. But this isn't just an American issue.
Other governments such as the EU and India will force their hand if needed for the public good. As they've done countless times in the past. We just need to get this developed and manufactured as fast as possible.
And the linked article said the clash was between this pharmaceutical behemoth or a startup from the university. I'll take the behemoth now.
"The scientists’ small biotech company—a spinout partially funded by Oxford—was refusing to hand over intellectual-property rights. To outflank their bosses, the scientists asked a London investment banker to help explore other potential deals."
If the government paid for all of that (including opportunity costs + a decent margin), then the government should have asked for the patent rights (or at least a commitment on pricing).
Has any serious journalist looked into exactly what the world governments paid for and exactly what the deals with the drug companies look like?
All I can find are biased opinion pieces devoid of actual information.
Incidentally, if you want serious journalism, the FT is worth paying for.
The laws need to change.
(i) e.g. privatization of telephone networks
(ii) e.g. toll roads and bridges
The 'public' wanted that by voting in the lawmakers making that possible.
That's how democracy works.
Also we're not talking about physical things, but something 'intellectual' like software, so the comparison is inaccurate.
More accurate would be IT research done in a publicly funded university.
Depending on where you live, you could very well be under the impression that the roads belong to delivery companies, taxis, etc. (private companies that make money off them) as they are effectively useless to everyone else (= the public) while they are constantly blocking them.
In this case the building is publicly funded for a profit AND the final result donated in “perpetuity” to make it a private TOLL road.
Double dip?
(I’m ok with subsidizing the research, and even negotiating a bulk manufacturing contract with an agreed margin... but a patent? Isn’t that bending too far?)
Socialized risk and privatized profits. A capitalist's dream.
To go back to your highway analogy, its as if the government contracted for the entire interstate highway system to be built and then let various private companies charge a perpetual toll to use the roads in addition to the money they made for building it.
Its not an accounting trick, its a perpetual royalty on the taxpayer's expense if the drug works (and a profit even if their drug never passes Phase 3 clinical trials).
Noam Chomsky has quite a bone to pick about toll roads
There's no(t necessarily a) question of any non-profit startup there. The problem is that the people who paid for the development of the product should also hold rights over the product. If the vaccine was developed with public money, it should be publicly available -- not necessarily (but yes, also to) non-profit startups, but also to any other manufacturer in the pharmaceutical industry, since they (allegedly, in any case...) pay taxes, too, and have therefore invested in this product.
If Merck wants to use their proven manufacturing base with an excellent delivery track record (which nobody is denying, after all), that's great. They can:
1. Put their money into the development of said vaccine, or
2. Acquire the license to manufacture it, at a reasonable price, like they do with any technology that wasn't developed using public money, or
3. If we don't want stuff that's already been paid for with public money to be sold to manufacturers, which I don't disagree with at all, then, sure, they should get it for free -- but in that case they shouldn't be the sole owner of the rights towards that product, either.
(Edit: FWIW, I'm all for 3. I've worked in the medical industry and I know full well that there's a great deal of work that goes between first-stage research and final production, and that it's incredibly hard and expensive to take the result of a publicly-funded research program and turn it into a product. That doesn't change the fact that said research programs are publicly-funded -- their results should be available to anyone who paid for them. If someone wants exclusive rights to the result of some research program, then they're welcome to pay for it themselves.)
As it stands now, they own the rights (including licensing rights!) to a bunch of products that they haven't paid for at all.
All the suits blabber on and on and on about how the government should keep its nose out of their business. How about they tell the government where to stick it when it's about paying for their research, too?
If you don't like that, vote someone in power who regulates that more.
The problem with these discussions is that nobody tells their opinions to their representative, they just blurt it out into the 'aether' on a rando internet forum.
True change starts with calling your representative. If they don't do what you ask them to, then have other people ask as well. Finally, have them vote them out of office if a sufficient ammount of people want the same thing that the representative won't do (eg. represent their constituents).
That's an awful lot of assumptions on your part. I have voted out someone who didn't represent these values in exchange for someone who does. I don't need to contact my representative on this specific issue because I already know where she stands, but if we were in disagreement I would (and have).
Posting about it on the internet is to garner additional support and discussion... you know the entire reason HN exists?
Just a notion I've been pondering. Sure, taxation could do the same job. Hypothetically. Hollywood accounting and such.
Maybe straight up royalties would be less prone to gamification.
Sounds like the media panic is working.
They also have 0 experience in developing a vaccine and it's transport.
But I guess they can transport some tanks and troops quickly, sure.
The government did this. They are the ones who put the restrictions in place. They are the ones who choose not to remove them.
The government pulled a fast one on most people: They broke our leg, they handed us a crutch, and we thank them.
Don't pretend the vaccine is our savior. The government has the power to end the restrictions at any time but they choose not to.
Oxford develops the vaccine with public money. We also, god willing, need to manufacture billions of them and transport them around the globe.
For that manufacturing, give me a solid existing multinational with a proven manufacturing record and base please, not some non-profit startup.