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[Leafsnail]

...Wait.

Your insurance money gets spent on R&D?

Isn't that what, y'know, drug companies do?  The companies that then sell their drugs at a profit, and therefore don't need insurance money put into them?

[Jimmy]

No. Insurance companies pay for the drugs, not the R&D. The company sells them at a higher rate in the USA than in Britain.

Britain's public health care system subsidizes the cost of the drugs, and the amount they're willing to pay is determined by the government. The company selling the drug must either agree to accept that much or the government won't pay for it. This forces the company to negotiate lower returns on their product than in the USA, where multiple buyers and consumers accustomed to paying high rates for pharmaceuticals mean they can charge higher amounts for their product.

Capitalism at work!

[Phmcw]

yes, and in this case capitalism make it more expensive. That is logical given that the companies have a de facto monopole on their product.

[Jimmy]

Supply and demand. They have a unique product, you have a medical condition it treats. Price is determined by how much people are willing to pay for it. If they charge too much nobody buys it and it's a failure.

Some think it's unfair that the company that invents the product has sole powers over its price for a certain period. But how else do they guarantee they get a return for their work? Making a pill is easy. Inventing it is the expensive part. Patent laws ensure the system is fair. The alternative is to tax everyone and pay the research companies from that tax. Never gonna happen.

[Phmcw]

The law and supply and demand don't lead to an optimization when there is only on seller, or only one buyer. Everyone know that, and that's why enterprise try so much to be price maker.

Your stance on the subject is illogical and mathematically unsound.

[Jimmy]

You're treating the drug as if it's the only choice. Health care comes in all shapes and sizes, with multiple treatments for the same disease. Buying the newest, greatest drug isn't your only option. You could, for example, keep doing the same thing you were doing before it arrived. Supply and demand holds true.

[Phmcw]

no it doesn't and he proof is : we get our drugs cheaper.
Jimmy, do you know the condition required to get unbiased competition?
Do you know that optimization is only guaranteed when these condition are met.
And almost none of these conditions are met in this case.

[Jimmy]

So you would prefer a situation where drug companies are price regulated completely by government? Then they close up shop. They're not out to make the world a better place, they're inventing a product people want to have in order to make a profit. Cut the profit and there's no incentive. Having gone through the training needed to work in this field I can tell you I'm sure as hell not gonna do it unless there's a paycheck. Thankfully the USA allows drug companies more freedom, and guess what! That's where the new drugs are invented. There's your proof that over-regulation will kill drug development.

You get your drugs cheaper because other people don't.

[de5me7]

If you like it or not, that's the entire point of capitalism: Enhancing the difference between the haves and the have-nots so that the haves can create as big a flow of value trough the entire economic system as possible without being held down by the have-nots. According to some theories this should increase the flow of value for all people within the economic system ("experiments" conducted in South America in the '70 indicate that this might not be true though, so make of it what you will)

this i believe is called the trickle effect. The glorious Thatcher government experiemented with it in the 80s in the UK. The idea being that if the rich recieved tax relief and got richer they would spend more trickling cash down to the poor and boosting the economy. IN reality the rich just put more into their bank accounts and sat on it, and the poor got poorer.

Fairness asside my issue with captialism is: a ; free market economics and its assumptions about an infinte resource base, and B, the lack of morality in it.

I talk about B because A is probably another debate. A good example of this would be BP cutting corners on H&S to save cash and leaving east coast US covered in oil. THe us east coast is covered oil in part due to the capitalsist system. If BP hadnt been caught or held accountable for the dissaster they would have made an economic gain from being immoral, better examples might be the Phopal dissaster. You could make the case that capitalism literally kills people and the planet for profit. Im not saying creating amoral system of economics is easy, but i am making an observation.

Capitalism currently runs in most parts of the world on a very short term planning system. Most business have 12months/4months of planning. So any decisions that are made are not interested in the value of the enviornment, or social issues as these issues work on longer timescales and cannot be tied to a captial gain or losswithin 12 months in most cases.

So for example, an area of coral reef is opened for tourism. Tour operators start working. The coral is damaged. BUt since the tour operators work on a 12month plan and coral damage will take a decade to destroy it, they dont count the cost of the damage to their business until its too late.

[DJ]

AFAIK Soviet Union wasn't exactly far behind USA in the technological arms race of Cold War, and their R&D was done by government institutions and universities.

[Leafsnail]

No. Insurance companies pay for the drugs, not the R&D. The company sells them at a higher rate in the USA than in Britain.

Britain's public health care system subsidizes the cost of the drugs, and the amount they're willing to pay is determined by the government. The company selling the drug must either agree to accept that much or the government won't pay for it. This forces the company to negotiate lower returns on their product than in the USA, where multiple buyers and consumers accustomed to paying high rates for pharmaceuticals mean they can charge higher amounts for their product.

Capitalism at work!

So we get drugs cheaper due to our non-capitalist system?

Works for me.

They still have high enough prices to make a profit, clearly (or they wouldn't sell drugs here at all) so what's the problem?  In any case, Britain has a fine R&D section for drugs.

[de5me7]

should drug companies be allowed to advertise on TV? and who should have the power to decide what drugs you need, a train professional called a doctor, or the patient/customer/egit who watches too many TV adverts?

[Jimmy]

Hehe.

Look how well that turned out for the USSR.

On the subject of morals, you're absolutely right. Morality prevents us from killing the less productive in society to reduce their burden. It prevents us from allowing the rich to rule over the poor in a feudal system. But morality is subjective enough that what you consider unthinkable, another considers acceptable. It's fair to say that having fewer moral issues with sacrificing things like environmental health will equal greater profits for businesses which influence it. The same could also be said for the ethical treatment of animals. Or the running of sweatshops. Point is, you could refuse to buy these products or work for a business that employs them. Flipside is that most people don't care. They'd rather have money than morals.

Good luck paying the bills with morals.

So we get drugs cheaper due to our non-capitalist system?

Works for me.

They still have high enough prices to make a profit, clearly (or they wouldn't sell drugs here at all) so what's the problem?  In any case, Britain has a fine R&D section for drugs.

The companies market the drugs to the UK because it's still more profitable than not doing so. However what you might not realize is that your country actually doesn't subsidize the full range of drugs, only a portion that the government and industry agree upon. If the government refuses to meet the company's target, they simply don't bother. Others will be heavily restricted in who has authority to receive the drug, even though it might be helpful to patients who don't meet the criteria. This is to reduce the amount of money the government has to hand out. The process is called Pharmacoeconomics, and it's a fascinating area to work in.

As for having a fine pharmaceutical R&D section, I have one word for you: Pfizer.

In terms of TV advertising, that falls within freedom of speech. A company shouldn't be silenced from letting people know about their product, even if the choice to prescribe it must come from a doctor. Many countries disagree with this and regulate drug advertising to greater or lesser degrees.

[DJ]

Collapse of USSR had nothing to do with scientific progress.

[Jimmy]

Yes, but it did have everything to do with their economic and political system, of which the research and development of weapons was a part.