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Cost of Drugs(Rx)

JaxsonRaine
Posts: 3,606
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7/8/2012 12:58:06 AM
Posted: 4 years ago
American healtcare is like, uber expensive.

Multinational pharmaceutical companies are forced to sell their drugs in countries other than Amerca for ~50% as they do in America.

Why does America have to foot the bill for pharmaceutical research worldwide?
twocupcakes: 15 = 13
mongeese
Posts: 5,387
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7/8/2012 1:14:08 AM
Posted: 4 years ago
At 7/8/2012 12:58:06 AM, JaxsonRaine wrote:

Why does America have to foot the bill for pharmaceutical research worldwide?

Well, somebody has to. If we negotiate American prices down, the entire industry will suffer drastically. The solution is to try to convince other countries to stop paying so little.
JaxsonRaine
Posts: 3,606
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7/8/2012 1:23:49 AM
Posted: 4 years ago
At 7/8/2012 1:14:08 AM, mongeese wrote:
At 7/8/2012 12:58:06 AM, JaxsonRaine wrote:

Why does America have to foot the bill for pharmaceutical research worldwide?

Well, somebody has to. If we negotiate American prices down, the entire industry will suffer drastically. The solution is to try to convince other countries to stop paying so little.

No, spending money is bad! Everyone should get the best healthcare without spending money on it!

Sorry, I'm just upset after arguing about healthcare systems elsewhere. I can't believe people think the WHO ranking is a good ranking of healthcare systems. I've argued with 5 people today who think that the high rate of obesity in America is caused by poor healthcare.(Another subject, meh).

I was actually looking at one pharma. company based out of switzerland. I found that they essetially lose 7% on every pill they sell in Europe, but America brings them up to 15% profit margin.

But Europe doesn't want to pay for the R&D, just the pill.
twocupcakes: 15 = 13
Cody_Franklin
Posts: 9,483
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7/8/2012 1:28:49 AM
Posted: 4 years ago
Well, that probably has to do with American companies also getting a majority of the pharmaceutical patents. Also, if you look at OECD data on pharmaceutical consumption, Americans outpace other countries' purchase/consumption by leaps and bounds. That's partly due to drug/health subsidies, but probably also due to a culture of fear surrounding medicine. Doctors want to avoid lawsuits, and Americans equate more doctor visits with being healthier. But you know the relation between price and consumption--if people are progressively buying more of a specific kind of stuff, while the supply of stuff stays relatively constant (or expands, but at a rate overshadowed by accelerating consumption), then prices go up. Since we're number one at consuming that stuff vis-a-vis other countries, our prices tend to be higher.
JaxsonRaine
Posts: 3,606
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7/8/2012 1:34:39 AM
Posted: 4 years ago
At 7/8/2012 1:28:49 AM, Cody_Franklin wrote:
Well, that probably has to do with American companies also getting a majority of the pharmaceutical patents. Also, if you look at OECD data on pharmaceutical consumption, Americans outpace other countries' purchase/consumption by leaps and bounds. That's partly due to drug/health subsidies, but probably also due to a culture of fear surrounding medicine. Doctors want to avoid lawsuits, and Americans equate more doctor visits with being healthier. But you know the relation between price and consumption--if people are progressively buying more of a specific kind of stuff, while the supply of stuff stays relatively constant (or expands, but at a rate overshadowed by accelerating consumption), then prices go up. Since we're number one at consuming that stuff vis-a-vis other countries, our prices tend to be higher.

No, other countries have price controls. Pharm companies, no matter if they are US based or not, can't charge profitable amounts in Europe.

PharmCoA has a 15% profit margin. Half of their revenue comes from the US selling each pill for $1. Half of their revenue comes from Europe selling each pill for $0.50.

That would mean they sold twice as many pills in Europe than the US.

50 pills in US for $50
100 pills in Europe for $50

Total sales = $100
15% profit margin means expenses were $87.
$87 to make 150 pills means each pill costs $0.58

Every pill sold in Europe loses them $0.08.

That's the current situation.
twocupcakes: 15 = 13
Cody_Franklin
Posts: 9,483
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7/8/2012 1:35:31 AM
Posted: 4 years ago
Also, other countries' health care is just as expensive. The difference is that their subsidy nets are bigger per capita, which means that the out-of-pocket expenses are smaller. It's like what Egypt did with consumer products (e.g. gas, vegetable oil) in the 1970s: they subsidized those things to make them cheaper. So, price-wise, they were less expensive--in reality, though, someone had to foot the bill, so the Egyptian government was losing a lot of money as real prices went up.
Cody_Franklin
Posts: 9,483
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7/8/2012 1:37:32 AM
Posted: 4 years ago
At 7/8/2012 1:34:39 AM, JaxsonRaine wrote:
At 7/8/2012 1:28:49 AM, Cody_Franklin wrote:
Well, that probably has to do with American companies also getting a majority of the pharmaceutical patents. Also, if you look at OECD data on pharmaceutical consumption, Americans outpace other countries' purchase/consumption by leaps and bounds. That's partly due to drug/health subsidies, but probably also due to a culture of fear surrounding medicine. Doctors want to avoid lawsuits, and Americans equate more doctor visits with being healthier. But you know the relation between price and consumption--if people are progressively buying more of a specific kind of stuff, while the supply of stuff stays relatively constant (or expands, but at a rate overshadowed by accelerating consumption), then prices go up. Since we're number one at consuming that stuff vis-a-vis other countries, our prices tend to be higher.

No, other countries have price controls. Pharm companies, no matter if they are US based or not, can't charge profitable amounts in Europe.

Then why are you asking "Why is it so expensive in America?" You obviously know the answer.
JaxsonRaine
Posts: 3,606
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7/8/2012 1:39:30 AM
Posted: 4 years ago
At 7/8/2012 1:35:31 AM, Cody_Franklin wrote:
Also, other countries' health care is just as expensive. The difference is that their subsidy nets are bigger per capita, which means that the out-of-pocket expenses are smaller. It's like what Egypt did with consumer products (e.g. gas, vegetable oil) in the 1970s: they subsidized those things to make them cheaper. So, price-wise, they were less expensive--in reality, though, someone had to foot the bill, so the Egyptian government was losing a lot of money as real prices went up.

No, our healthcare is the most expensive. Partly because we do foot the bill, and partly because we generally have more new equipment/treatments before other countries. There's a report by some government agency that shows that the actual cost of our healthcare is quite a bit more than other countries.

We have to pay more for drugs, but physician salaries are ~ double the OECD average. I can't remember the other reasons off the top of my head.
twocupcakes: 15 = 13
JaxsonRaine
Posts: 3,606
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7/8/2012 1:40:47 AM
Posted: 4 years ago
At 7/8/2012 1:37:32 AM, Cody_Franklin wrote:
At 7/8/2012 1:34:39 AM, JaxsonRaine wrote:
At 7/8/2012 1:28:49 AM, Cody_Franklin wrote:
Well, that probably has to do with American companies also getting a majority of the pharmaceutical patents. Also, if you look at OECD data on pharmaceutical consumption, Americans outpace other countries' purchase/consumption by leaps and bounds. That's partly due to drug/health subsidies, but probably also due to a culture of fear surrounding medicine. Doctors want to avoid lawsuits, and Americans equate more doctor visits with being healthier. But you know the relation between price and consumption--if people are progressively buying more of a specific kind of stuff, while the supply of stuff stays relatively constant (or expands, but at a rate overshadowed by accelerating consumption), then prices go up. Since we're number one at consuming that stuff vis-a-vis other countries, our prices tend to be higher.

No, other countries have price controls. Pharm companies, no matter if they are US based or not, can't charge profitable amounts in Europe.

Then why are you asking "Why is it so expensive in America?" You obviously know the answer.

I'm mad. I'm asking why we have to foot the bill, not why it's so expensive

Why does the rest of the world get to leech off of us for R&D, and then turn around and say our system sucks because it's expensive.
twocupcakes: 15 = 13
MrBrooks
Posts: 831
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7/8/2012 6:00:21 AM
Posted: 4 years ago
Why does the rest of the world get to leech off of us for R&D, and then turn around and say our system sucks because it's expensive.

Because nobody wants to admit they are getting a free ride.