Trump dips his toes in Prescription Drug Price Wars

Posted by  $  blarman 6 months, 1 week ago to Economics
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Trump is correct in pointing out that other nations are getting many drugs below cost. The question is what - if anything - should be done about it.
SOURCE URL: https://www.bloomberg.com/news/articles/2018-05-11/why-higher-drug-payments-in-other-countries-won-t-help-the-u-s?cmpid=BBD051118_BIZ


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  • Posted by Andy 6 months, 1 week ago
    He said he would come up with something way better than Obamacare and he's following through. It's not one single massive government program like Obamacare. "Using our trade agreements to get other countries to pay more of their fair shareā€¯ is just one part of it.
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  • Posted by AlfredENewman 3 months, 2 weeks ago
    How about free market capitalism instead of monopoly. Then these products would flow from a competitive environment.

    The base argument from the drug companies on the price of drugs follow the line of recovery of costs. But this is a fallacy, those costs have already been recovered in the form of tax write downs.

    "Most taxpayers want to deduct as much as they can in a single year, so they elect to treat R&D costs as a current business expense. This enables you deduct the entire amount in the year the costs were incurred. You may take this deduction whether or not you make any money from your research efforts during the tax year. This deduction can be particularly beneficial for start-up businesses because it allows them to deduct R&D expenditures before their business actually begins and before the R&D efforts result in revenue." https://www.lawyers.com/legal-info/ta...

    What really drives up the costs of drugs is the government backed monopoly. As a part of marketing, the pricing of a product is based on what the market will bear. If the price is too low, then money was left on the table. If the price is too high, then competitors will extract market share.

    When government becomes involved, markets are always skewed toward the protected class. While I would lean toward no patents at all, the least equitable would be a limited window, like 12 months, to recover costs before capitalism takes over and the market is open to competition. We have all seen the results when patents expire and drug prices crash to reasonable based on competition.

    So long as government instills this socialist concept of crony capitalism we will keep getting what we got and nothing will ever change.

    In reality the other countries are paying their fair share. All they have done is refuse to patent unless the price is fair as it is government that is footing the bill anyway.

    Personally, I could care less as drugs are for sick people or those wishing to be sick and I am neither. Drugs do not heal but mask. For those too far down as to need a crutch, then like a real crutch that support until we are healed then cast away. The body is an amazing machine that can repair most anything so long as we provide the nutrients needed for it to do so.
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    • Posted by  $  3 months, 2 weeks ago
      Your two statements "How about free market capitalism instead of monopoly." and "In reality the other countries are paying their fair share. All they have done is refuse to patent unless the price is fair as it is government that is footing the bill anyway." are antithetical.

      The whole problem here is that you have socialized medicine - the opposite of free-market capitalism - in these countries in the first place. Until they abandon that, there is no hope for free market capitalism. And just like socialism is wont, it shifts the costs over to taxpayers and producers - in this case other nations - to foot the bill. And yes, the US does pay for it - not only in higher drug costs for our people but we also pay for it in our defense budget.
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      • Posted by AlfredENewman 3 months, 2 weeks ago
        I agree that they are antithetical but you are ignoring context. The first instance was as a solution to the issue within this country, a free market rather than monopoly.

        The second was in response to other countries solution that to maintain a monopoly required a more reasonable pricing format for their citizens.

        These follow the logic that A can equal B but not at the same time nor the same instance.

        But we don't have socialized medicine. If socialized medicine were a factor, the monopoly would be the state and there wouldn't really be medicine. Actually this would be a benefit as medicine kills.

        But this problem is not just in medicine it is across the board. Patents create monopolies and stifle advancement. In one of my lives in the electronics industry we had almost as many patent lawyers as engineers. Every little thing ws patented so those following would have costs four to five times ours and took much more time to get to market.

        I disagree totally with your argument. How can you have anything close to free market capitalism when government blocks free access to a market. And the socialist aspects of those other countries are actually less than ours because they at least allow their citizens to buy poison at a lower costs.

        And the drug companies just keep marching to the bank.

        And while we debate this matter as a simplistic matter, it isn't it's very complex and made more so by the monopolies and the whole system.

        The only solution is free market where you offer at a fair price or there are 10 competitors bumping you out of the marketplace.
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