Let me start by saying that half of my family works in the healthcare sector: my dad is trauma surgeon, my sister is a chemical engineer at a (very) large European pharma company, and my mum works extensively with pharma sales/marketing teams around Europe. I'm no expert, but I tangentially know the industry.
i. 6 out of the top 10 pharma companies by revenues are European (Novartis, Roche, GSK, Sanofi, Bayer, Astra Zeneca).
ii. Europe accounts for 1/3 of all pharma R&D in the world.
So with the above two points in context, let me pull apart your unsubstantiated comment:
First, lets talk about pharma and drugs for a second.
>make little to no margnial profit in non-US markets
European pharma co. Novartis made in 2012 revenues of $19.7bn in Europe vs $18.6bn in the US (and a total of $56.7bn). Novartis invested 21% of sales into R&D.
U.S. pharma company Pfeizer, total revenues of $59bn in 2012, U.S. was $27bn and international $36bn. Pfeizer invested $7.9bn in R&D (c. 13% of revenues).
Look at any other large US or European company and you will see that Europe is as profitable, if not more, than the U.S. Europe, by itself, on a total revenue minus total R&D expenditure, is (in the $ billions) profitable.
>pressures of a single-payer system driving down prices as low as they can possibly go.
No European country has a single-payer, that is false. Purchasing is not made by a country, and it is not even done at the regional level. Purchasing decisions are made at a hospital per hospital level. Each hospital manages its own budget and pretty much pay market rates (to check this simply go to the pharma companies annual reports and do the math).
>This means that pharmaceutical companies have to recoup their fixed costs (R&D) and generate their real profits from the US market.
So given the math above, and given that R&D is a fixed investment (even if the final compound is produced ad infinitum), the U.S. tends to contribute to 25% to 35% of any pharma companies' revenues, while the rest of the world makes up the rest. This simply means that the U.S. by itself would cover R&D, but in no way it could cover for R&D + operational costs.
>Without the US market, there would be no incentive to actually create the drugs.
European pharma, by itself, makes over 1/3 of all world R&D in pharma, while U.S. contributes 1/3 of all revenues. Without the rest of the world, U.S. companies would not invest at all.
Second, lets talk ER and other primary patient care with no drugs involved.
How is it that any transplant, operation, etc. in any part of the world is cheaper, face value wise, in RoW than in the US?
Well, let me say that while in Europe healthcare is considered important, it is not seen as a business, but a basic right. Not the right to FREE healthcare, but the right to healthcare. Healthcare in EU countries is seen as the recurring cost of keeping the citizens healthy, and hence healthcare is managed as a cost centre and not a profit centre. E.g. Doctors and nurses, across the same EU country get paid very consistent salaries, unlike the US, where a surgeon in Orlando makes a completely different salary than one in Idaho, or even in the same city! Salaries of public employees in the EU are transparent and consistent. The overall U.S. healthcare system lacks price transparency at every level. How can it be that the same surgical procedure in the same U.S. city varies in price by 2x or 3x? In the U.S., hospitals, large healthcare companies and other parties are there to make a profit, not to run a business at a loss. They have shareholders, it's understandable. In Europe, the shareholder is the citizen, and healthcare is not a for-profit business. Nevertheless, if you want more "customer service" in your European healthcare you can have it, pay for private insurance, but pay for it, it's not illegal.
My final comment would be this insightful chart: https://www.e-education.psu.edu/drupal6/files/geog438w/image...
> U.S. pharma company Pfeizer, total revenues of $59bn in 2012, U.S. was $27bn and international $36bn. Pfeizer invested $7.9bn in R&D (c. 13% of revenues).
Do you know what fraction of those revenue figures are profit? It is entirely possible that the companies could have different profit margins in different areas.
ii. Do you understand that revenue and profits are different concepts?
ii. Lets for a second do a fermi equation on those us and European revenue figures.
We have roughly the same revenue figures We have roughly the same population (give or take 20-30 million) between Europe and the is
Now if there is no profit to be made in Europe either the Europeans consume vastly more pharmaceuticals (possible but unlikely) OR there is profit to be made in the European market
[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2174966/ [2] Ben Goldacre. Bad Pharma. 2012. Fourth Estate
And if you want to boost the sales of your second line drug convincing people it is the best you are actively hurting the patients.
Doctors find out through journal articles etc- there is no need to market to us
You're right that a drug company will always charge as much as it can, so the US price of a drug will not be affected by the price it can charge elsewhere. However, the chance a drug is developed in the first place is dependant on the total size of the market for that drug. If the potential profit for, say, a breast cancer cure is $300 billion rather than $100 billion then there is more chance that a cure will be found.
No, I didn't mean anything like that. I have no idea how you got that out of what I said.
> By the way, aren't there many people here that say it's the legal duty of the directors of a company to do everything they can to maximize shareholders' value?
Yes, and it is.
> Wouldn't THAT (make less money than legally possible in the US) be a violation of that supposed duty?
Yes, but it's not happening, so I don't see your point.
You wrote: "This means that pharmaceutical companies have to recoup their fixed costs (R&D) and generate their real profits from the US market" (emphasis mine). What did you mean with that phrase, if not that if they could make their real profits outside the US pharmaceutical companies wouldn't have to recoup their costs in the US?
... no wait.
At most one of those can be true (and possibly neither). Which do you pick to be true?
Kind of like typical religious apologetics. "When people question your Bible beliefs here are points you use to refute their arguments..." stuff like that.
Public Citizen and many others have done research debunking such claims in detail. (http://www.nybooks.com/articles/archives/2004/jul/15/the-tru...)
In essence, Americans are subsidizing the socialized healthcare systems of other countries.