I think legal monopolies, for fixed periods, provide ample opportunity to profit from development costs.
We can do the things you mention without killing the pharma industry. “Negotiating” can mean the US says that it won’t pay more than 110% of the average price paid by other countries.
I think the “pay for results” mentioned above is certainly interesting for very high priced drugs.
Also, Twig’s comment on direct-to-consumer advertising.
At some point, we have to ask if there is an upper limit on the amount the gov’t or society should pay to extend human lives. I think there is.
The dynamics in the insulin market are extremely competitive for the drug market. It’s these orphan drugs where the price goes haywire. Insulin is like $4000 a year for a diabetic all in. There are drugs hitting right now that cost millions.
Outside of vaccines, what happened in 2020 and 2021? I will give them credit for vaccines, how much money did they make on those? The unit price was low but volume was high.
It’s fun to crap on pharma. But they did cure Hep C and have made some really good advances elsewhere.
I don’t want to burn it all down and not get new drugs. But there is a lot of egregious behavior that should be stopped by the legislature.
the example i gave was just that - a single hypothetical. of course there are many people with wildly different annual costs. not sure what the extra annual cost is on average. but I wouldn’t build on the numbers I used to point out where the new treatment was def more expensive to rebut someone who said it could save money. it could save money for some and cost money for others. i predict…over just 5 years it costs on average. no clue how much
Ok, but even if $380,000 isn’t to the penny the correct average additional cost for this particular hemophilia treatment, the point is that it is not so unrealistic to think that in the next few decades we might be dealing with some other treatment for some other condition where the average annual cost significantly exceeds per capita GDP and it would treat something that affects a large number of people. And the hypothetical question is what do we do when that happens?
Let’s say a cure for diabetes was invented. Like no one had to take insulin ever again and they priced it at $3 million. Is that worth $111 trillion ($3 million * 37.3 million diabetics in US).
This question isn’t out of the realm of possibility.
Just looking at steady state, we have 1.5M new diabetics every year, and about 200M people age 18+… did I do the math correctly, $22,500 per adult, per year, to treat the new diabetics at steady state? Plus you have to deal with the bolus of pts day one, the 37M current diabetics.
Offset that with the average cost of treating diabetes, which is maybe $10k per year, spread across the whole population you’d save a few thousand bucks, but doesn’t it net out to something like $20k per year, per adult?
I didn’t check your math, but it seems like you’re making some assumptions.
Is the $3,000,000 for a one-time thing or will they need more than one treatment?
Will there still be ongoing costs after the treatment(s)?
If it’s a cure could a person come down with diabetes a second time?
Will there be a moral hazard? Now that I don’t have to worry about diabetes, go ahead & Supersize my McMeal! So the 1.5M new diabetics a year might mushroom.
Yeah, I’m waving my hands furiously here. I’m just thinking about how many zeroes are on the end of the cost and what that would do to health insurance premiums.
If it pushes up premiums by, I don’t know, 25% of median household income, that’s a problem. Maybe it’s more profitable to set the price really high, at least at first, and rake it in. And then lower the price or work with payers on rebates or whatever, basically using price discrimination to maximize revenue.
Because that the only time you are personally involved. You know, that whole voting thing.
And I’m being purposely catty here. Isolating the cost is silly. That’s only relevant obliquely. The harder questions involve the trade offs. What doesn’t get done if you do that? Without the options on the table, it’s a silly exercise.