These two companies have collectively received more than $1.5 billion from the US government [1]. As I understand it, Pfizer have not taken any federal funding. They do have government purchase agreements, but they are dependent on Pfizer delivering a viable vaccine. Their partner BioNTech received German government funding:
Berlin gave the German company $445 million in an agreement in September to help accelerate the vaccine by building out manufacturing and development capacity in its home market. [2]
[1] https://www.nytimes.com/2020/05/21/health/coronavirus-vaccin...
[2] https://www.bloomberg.com/news/articles/2020-11-09/pfizer-va...
I don’t think the data bears this out exactly. US healthcare tends to optimize for access and quality to the detriment to cost. As the saying goes: access, quality, or cost... you only get to choose two.
The US tends to measure better than any comparable country of its size on those two metrics (and quite poorly on cost...but some of that is because the US funds about 50% of worldwide medical R&D)
https://www.sciencedirect.com/science/article/pii/S014067361...
Edit: U.S. percentage of worldwide R&D has been waning and, while still the largest contributor, is now a little over 40%
And in fact this is one of the big differentiators between 1st world and 3rd world countries: if the population has access to quality services, in health care or other important areas like education and sanitation. The US seems to be designing its systems to become a big 3rd world country.
False: The third leading cause of death in the US is believed to be preventable medical errors. You can go to the best institutions in the US to get care, along with seeing the very best doctors, but you cannot evade a statistic like that, even if you are in the 1%. See: https://www.npr.org/sections/health-shots/2016/05/03/4766361...
Also, this article: U.S. life expectancy will soon be on par with Mexico’s and the Czech Republic’s: https://www.washingtonpost.com/news/to-your-health/wp/2017/0...
Also this: 42% of new cancer patients lose all of their life savings in two years because of treatment. The average amount a cancer patient lost was $92,098.: https://www.insider.com/half-cancer-patients-lose-their-enti...
The truth is that you can be in the top 1%, sitting on a mountain of cash, and still lose an unfathomable amount of money, even while insured, if you have cancer or a rare disease. Both of which are actually common.
It is not the doctors who are the problem here with respect to the medical errors: it’s the healthcare system. A good read on what’s wrong with the system is the short book Our Malady by Timothy Snyder.
If you want to stay alive long term, you may want to consult HealthData.org which analyzes each country’s healthcare systems in depth along with outcomes. The group is world renowned. Ironically, it is also the IMHE group that does the coronavirus statistics that everyone consults.
Personally, I am an American culturally, but I became an EU citizen (Croatia) over the US healthcare system. I never plan on working in the US. I do select the country I am working in now due to healthcare.
E.g., if you don't have insurance you can walk into an emergency room and get treated even if it's not an emergent situation. If you don't have insurance, there is a higher risk you won't pay. That cost then gets spread to others who do.
For example, if someone needs to treat cancer, it doesn't make any good to go to an emergency unit: they will discharge the patient as it is not an emergency situation.
That's because the ER is meant to stabilize a patient, not cure chronic disease. Which is to my point: people will forgo preventative medicine until their condition deteriorates and they need to be stabilized in an ER. People get their non-emergent conditions treated all the time in American emergency rooms.
E.g., if I have diabetes, an ER will not put me on a long-term treatment plan. But if I ignore my disease until I start having hypoglycemic symptoms an ER will treat me until I am stabilized enough to be released. Is this the best system? Absolutely not, but it's much different than saying "only the rich have access to healthcare".
FWIW, I used to work in healthcare, including redesigning ER processes
If this was not enough, hospitals are catching up to the "loopholes" in the law and abandoning poor neighborhoods, to make it even harder for people to use emergency rooms.
https://www.governing.com/news/headlines/health-care-facilit...
You may not understand the nuances of the article you referenced. Take Detroit, one of the cities used to support the claim in the article. The baseline decade used is the 1960s. Detroit has only about a third of the population it had in the 1960s so it's not rational to think they would maintain their previous healthcare infrastructure. Further, much of that population left for the suburbs of metro Detroit, meaning the healthcare facilities being built are just following the population demographics. Add onto that the point that healthcare has changed dramatically over the last 60 years with much more emphasis on outpatient care, and there are rational, non malevolent reasons to decrease the number of urban hospitals
E.g. for myself, I have good insurance, but I don't have a "primary care doctor." I don't go to the doctor unless I'm injured or sick. And I don't mean a sniffle or cough, I mean sick as in I have felt awful for several days.
With that said, it seems to be quite a bit and skewing higher for males than females.
The average American sees a doctor 3 times per year. In France it is 6-7 times per year. In Japan, it’s 13 times per year. This statistic is directly linked to the cost of care.
Canada's HAQ index in 2015 was 87.6 vs. 81.3 for the US. However, Canada spent about $27B US on R&D vs. $495B for the US. On a per capita basis, the US outspends most the world on medical R&D. That drives the US total healthcare costs up while helping to drive down the healthcare quality costs elsewhere. To a certain extent, the US subsidizes the healthcare costs through much of the world, effectively allowing them to optimize for a 2 parameter model while the U.S. must still deal with a 3 parameter model.
I'm not trying to be dismissive, I just don't know how it's germane to the discussion unless we view all the other data through the same lens. The data I linked is per country in absolute and per capita basis that tries to put it in unbiased terms.
Are you claiming the US is disproportionately funding non-useful research? If so, how do we measure "useful" research funding?
[1] https://wtfhappenedin1971home.files.wordpress.com/2020/05/ey...
However, the point between comparing countries still holds. If you use older data, you'll see that the U.S. had even more disproportionate R&D funding
I don't think there's a single perfect measure but if you put it in broader context of measures like Nobel prizes R&D spending, patents, etc. it does seem to paint the picture that the US disproportionately contributes to medical innovation.
It's very similar to the measure of health. There is no single great metric. Using a single metric like BMI or blood pressure is flawed. However, you can get a clearer picture if you bring together multiple metrics.
I completely agree that preventative healthcare is lacking, partly due to the system and partly due to culture. If the OP had originally said "preventative healthcare" I wouldn't have much to disagree on, but they used a blanket statement implying only the wealthy have access to healthcare in general.
The US also gives free preventative healthcare to many subsets of the population
I suppose all immigrants have similar problems.
[0]: I mean people living in Turkey
Maybe we're more similar than we like to pretend
No it doesn't. Both dosings use two shots, and the "90%" number from the smaller dosing is from an unreliably small sample set of 33 infections -- it could easily be 70-80% by next month when more data comes in.
Can you count infections as a metric of efficacy for a vaccine that's designed to stop infection?
Consider [1]:
"However, protection was 90% in an analysis of around 3,000 people on the trial who were given a half-sized first dose and a full-sized second dose."
AFAIK it's not known how many of those 3,000 in that trial were exposed to potential infection.
The bars are to be calculated using conditional probabilities.
So where did Pfizer's capital come from to shoulder these costs? It didn't come out of thin air, they've accumulated capital from somewhere. If not from taxpayers, someone is subsidizing Pfizer's expenses through Pfizer's revenue stream. Taxpayer subsidies really make sense here seeing how this issue effects everyone.
Companies taking a portion of what they earn from their existing products and investing this money to create new products is beneficial, and we should have more of it.
Additionally, while this is probably not the case for Pfizer, another possibility is that a company can take outside investment to fund development of a new product.
Without those trillions of dollars/euros most probably the capital markets would have been down by at least 50% (my guesstimate, or at least that's where we were headed mid-March), which means that the money available to companies like Pfizer would have been a lot less.
As such, Pfizer saying that they didn't receive federal money is technically correct, but without federal money most probably their market value would have been a lot less right now.
Pfizer's cash situation or ability to spend/pay a dividend has nothing to do with stock price. Pfizer does not have their cash balance invested in other stocks. Ability/willingness to pay a dividend has to do with excess cash.
To the extent there's any relation, it's a high stock price that discourages paying a dividend. If the dividend yield will be basically nothing, why bother spending down precious cash that could be reinvested (because obviously the market values future cash flows a lot more than current ones).
Deflation might encourage a little bit of holding of corporate cash rather than spending it on R&D, sure. But even then I think you're overstating the case.
I think the OP was reflecting on cash flow being used for R&D but your post seems to be more about market capitalization.
But let's look at this more holistically. Pfizer and pharma benefit a reasonable amount from public research. Pfizer has received their fair share of governmental funding in the form of products, services, and research: https://www.usaspending.gov/search/85a918fa6adf5152dbac723d2...
They've also been subsidized by people with illness over the years that isn't related to COVID (directly or through their insurance provider pools). It's in other cases the previously sick that have padded Pfizer's profit margins enough to enable them to accumulate enough capital they could take on this sort of risky R&D. Theres also the costs of enabling laws and defending their IP rights from external pressures the US pushes.
It may not be direct subsidy but there are plenty of indirect subsidies that enabled Pfizer to do this. Let's stop pretending these businesses pull themselves up by their bootstraps to success and take on all the risk: they don't. They very often take low risk returns and transfer to high risk and use subsidized activity (e.g. federally funded research) to their advantage. Anything high risk like pharma is prone to failure and needs assistance.
Should we continue assistance? Absolutely, I think so, it's good for everyone. As one parent mentioned, it is good to see these businesses reinvest in further R&D that lead to new discoveries in therapy and treatment as opposed to simply hoarding capital.
Apparently the thought of the narratives that Pfizer didn't pull themselves up by their bootstraps financially makes some people cranky. Everyone needs assistance (especially in high risk arenas), let's not pretend that assistance doesn't exist simply because its indirect, time delayed, and being shifted around.
A subsidy is, by definition, a governmental funding mechanism. "People with illness" who used Pfizer products in the past aren't subsidizing the COVID vaccine anymore than I subsidize an automobile manufacturer making pickups when I buy my tiny hatchback. It's built into the business model and not really a "subsidy".
I agree with you in terms that we shouldn't view these companies as operating in a vacuum, I just don't think the idea of the markets being propped up is the most congruent way of framing the discussion. Pfizer benefited along with most other publicly traded companies, irrespective of their COVID vaccine.
https://lifescivc.com/2019/12/venturing-a-perspective-on-the...