I hear this a lot, and I think that there is a fundamental misunderstanding of what's going on.

People aren't upset by for-profit grocery stores taking tax dollars in the form of food stamps. They aren't upset by taxpayers giving money to for-profit hospitals to treat poor patients.

The government is paying a For profit company to do something that the government wants.

If the company would do it anyways, then of course I agree that the government shouldn't pay for it.

I think the difference is the extend of the profit. Big Pharma is incredibly profitable, while grocery stores are operating on very thin margins. Few people have a problem with a company doing business based on government expenditure, but specializing in maximizing profit from this reeks of profiteering.

Just as a point of reference, if you bought 100K in Pfizer stock 25 years ago, it would now be worth about 100K. Adjusted for inflation, you would have lost about 50% of it’s value.

Not what I would call ‘incredibly profitable’. And they are one of the biggest.

Does that include the value of dividends paid over the period?

with dividends, you might just about broke even on your 25 year investment.

If the goal is to go after 'extremely profitable' companies, maybe we should be looking at tech companies, that are in fact, 'extremely profitable', unlike most pharma companies.

and for the record, I have zero love for pharma companies, or how they operate - but they are not - in general - 'extremely profitable' companies. Far from it.

I agree with your position. There is a trend on HN and other platforms that anything with a profit motive is bad. Capitalism is bad, profits are bad... Yet it is all complaining on the problems without a actual real solution.

I thought HN was better, focus on the actual problems and not let every discussion turn into a profit/capitalism = bad debate.

The "actual real solution" with the regard to the topic in this thread is demonstrated well by a number of countries around the globe: force everyone in a country to be part of a public health insurance system, financed mostly by deductions on income and tightly regulate price setting for drugs and medical services administered under that system.

If that sounds too much like socialism for your taste, give rich people the option to buy additional services or restrict the public system to basic medical services and drugs and require private insurance on top for cutting-edge stuff.

Profit is a great thing, but it is not an end to itself. The point of liberal democratic societies is to guarantee basic rights for everyone, while constantly improving the welfare (which is not the same as wealth) of as many people as possible. Capitalism has made great contributions towards that goal, but it also contradicts it in several critical places and thus needs to be regulated where necessary.

>tightly regulate price setting for drugs and medical services administered under that system.

One think I think worth mentioning is that there is a significant difference between price controls and purchasing controls. purchasing controls is simply refusing to buy if the price is too high, while price controls is mandating a miniumum or maximum price for X. nearly every successful medical system uses purchasing controls, not price controls.

IMO, one of the main reasons costs are out of control is a lack of purchasing controls.

Stock price and profits are not the same thing. The stock price are a bet on future developments, mostly on revenue/profit growth. Profits are actual money in the bank.

Pfizer's annual net income has been around $10 Billion continually since 2009: https://www.macrotrends.net/stocks/charts/PFE/pfizer/gross-p...

Annual revenues for that period were mostly between $45 and $60 Billion.

Not sure about you, but that is what I'd call "incredible profitable" on any day of the week.

Pfizer is one of the largest drug makers in the world, and an annual net income of $10B puts them well behind many tech companies (Apple, Microsoft, Amazon, Nvidia, Meta, Google, TCMC), carmakers (Toyota, BMW, Volkswagen, and Mercedes-Benz), retailers (Walmart and Home Depot), fashion brands (Dior), telco companies (Verizon), banks (Bank of America, JPMorgan Chase, UBS), financial services companies (Visa), insurers (United Health), shipping companies (Maersk), and basically every gas and oil company on the planet. I think you would be hard pressed to identify a single one of these companies who hasn’t benefited from tax payer funded government research and initiatives.

So what exactly makes it so perniciously awful for pharmaceutical companies to do so?

Because my life doesn't depend on if I can buy the next iPhone, but it very well might depend on if I can afford a certain drug.

Apart from that I personally think that excessive profit is reprehensible for any type of business, as someone, somewhere is the sucker on the other end of that equation. Tremendous profits usually come with someone being exploited somewhere along the value chain. For many of the businesses that you have listed this is painfully obvious for anyone who is willing to think about this for even a minute.

> People aren't upset by for-profit grocery stores taking tax dollars in the form of food stamps.

They might feel different if foodstamp-bought food was 10x as expensive as regular food, and those with foodstamps were forbidden from buying food for non-foodstamp prices.

I don’t like the percentage profit they take in the US, they can sell a drug outside the US for $50, but charge $300 here. Either we are subsidizing other countries, or they are fleecing us for what they can get, often on the back of research funded by tax dollars.

The latter, as these companies were perfectly profitable even if they wouldn't charge inflated prices in the US. Not quite as profitable as currently, but still not going bankrupt.

They would absolutely stop doing clinical trials if they couldnt charge US prices. Sure theyd still be profitable, but we'd never get any new drugs since they cost a billion dollars to prove efficacy and safety.

Let's do some basic back-of-the-napkin math:

Say the development of a drug costs $1 Billion on average and that only every tenth drug gets approval. So you are looking at a $10 Billion cost for every successful drug development. But you can then sell this drug exclusively under current patent laws for about 20 years, worldwide. By that calculation, you'd need to sell 1.000.000 doses of the drug for a price of $500 each every year to break even.

That sounds trivial to achieve given that there are 7 billion people alive and innovative drugs will go for vastly more than that even in strictly regulated markets like many European countries (my son gets a pretty advanced drug that costs about $12.000 (EDIT: yearly) to procure but which is covered by our (national) insurance scheme).

Additionally, a lot of the cost of basic drug research is actually covered by government-financed research, not private investment.

If you are still worried, you could use a prize model, similar to what was done during covid: Identify certain qualities that a new drug should have (i.e. be an effective vaccine against malaria) and guarantee a big enough market (i.e. promise to buy at least 1 Billion doses at $10 each) and you can bet that there'll be plenty of companies trying to get at that money.

I think a prize model is a great idea and have been happy to see the US gov doing some work to move toward an implementation.