The health care thread

[GONNAFISTYA]

I've always been under the assumption that drug care and even ambulance rides are part of a "health plan". I was unpleasantly surprised when I found out that - in Canada - it isn't part of the health plan and "customers" get a bill.

In Germany and Denmark, prescription drugs are part of the plan and the customer pays a nominal fee (it isn't free...but damned near free). However I don't know of any country that places ambulance use under their health plan (including Germany and Denmark).

It's weird that anything that is mandatory (non-elective) to saving your life - ambulance, life saving drugs - aren't fully covered. I mean...you don't get a bill when you call 911. While ambulance and 911 operators deal with alot of non life-threatening situations - and perhaps they should get billed in that situation - the guy churned into hamburger in a car accident shouldn't have to pay.

[Dark Metal]

Well life saving drugs administered here are covered, if they're administered in the Hospital... My understanding about the charges for the ambulance is that too many people were using it as a way to get to the hospital to get care when it wasn't necessary, thus they began to charge for it. I've had the paramedics come to my place when I lived with my ex, give her a glucose shot and be gone without charge, but if she had to have gone to the hospital it would have been a different story.

[seremtan]

whatever the investment in R&D pharma companies make, the very least one can say is that their research would be impossible without research done by universities, whose work is freely available in journals etc. i don't know if US universities receive any public funding but UK ones do, which means our taxes are - to some extent - subsidising the work of private pharma orgs

as for stiglitz's idea - i would need more details as well - but the problem with developing nations not being able to afford the branded drugs (which are a matter of *need*) is one that needs to be dealt with somehow. the markups from generic to branded are phenomenal: in drug stores in the UK generic aspirin costs (literally) pennies, but right next to the generics on the shelf some pharma company will be trying to get you to buy their own 5x as expensive branded aspirin. you'd think the free market would see them off, but apparently not

[GONNAFISTYA]

Jesus fucking christ this site is slow.

"waiting for ign.com"

[mjrpes]

U - Under
S - Socialist
A - Attack

[R00k]

whatever the investment in R&D pharma companies make, the very least one can say is that their research would be impossible without research done by universities, whose work is freely available in journals etc. i don't know if US universities receive any public funding but UK ones do, which means our taxes are - to some extent - subsidising the work of private pharma orgs

as for stiglitz's idea - i would need more details as well - but the problem with developing nations not being able to afford the branded drugs (which are a matter of *need*) is one that needs to be dealt with somehow. the markups from generic to branded are phenomenal: in drug stores in the UK generic aspirin costs (literally) pennies, but right next to the generics on the shelf some pharma company will be trying to get you to buy their own 5x as expensive branded aspirin. you'd think the free market would see them off, but apparently not

Agreed all around.

When a new drug is invented and is recognized as a possible cure or treatment for a widespread or dangerous disease, maybe a representative coalition of governments could get together and pool money to buy the drug's patent from the company that invented it (at government-negotiated prices), and then proceed to make it more affordable and freely available where it's needed.

The price would have to be fairly high I guess, to make it worth it to the private company who created it (and not to dissuade others from coming up with wonderdrugs also)... just thinking out loud I suppose.

[Massive Quasars]

whatever the investment in R&D pharma companies make, the very least one can say is that their research would be impossible without research done by universities, whose work is freely available in journals etc. i don't know if US universities receive any public funding but UK ones do, which means our taxes are - to some extent - subsidising the work of private pharma orgs

It's much the same in the US, Canada, and elsewhere in the OECD. Firms typically under-invest in foundational research despite the significant aggregate social returns. Public research is often justified on these grounds.

as for stiglitz's idea - i would need more details as well - but the problem with developing nations not being able to afford the branded drugs (which are a matter of *need*) is one that needs to be dealt with somehow. the markups from generic to branded are phenomenal: in drug stores in the UK generic aspirin costs (literally) pennies, but right next to the generics on the shelf some pharma company will be trying to get you to buy their own 5x as expensive branded aspirin. you'd think the free market would see them off, but apparently not

Can be brand loyalty, marginal differences in tablet formulation, coatings, drug release, etc. Typical customers with meager knowledge might fall back on trusted names or use price as a proxy for quality (strange as that sounds).

Still, it's peanuts to the health care and pharma elephants of posts prior. For Puff's sake, we might want to steer this topic back to single payer and US health care.

[Fender]

14% of pharma budget goes to R&D

http://www.independent.co.uk/opinion/co ... 67257.html

[MKJ]

However I don't know of any country that places ambulance use under their health plan

welcome to dutcheeland

[seremtan]

14% of pharma budget goes to R&D

http://www.independent.co.uk/opinion/co ... 67257.html

that was the article i linked to earlier

[Fender]

oh...
i guess i never made it to #5
and you need a non-standard avatar so your posts are easier to find

[seremtan]

it is non-standard - it rotates the other way

[bitWISE]

[seremtan]

obama - hitler's kind of guy

no, really

[Massive Quasars]

14% of pharma budget goes to R&D

http://www.independent.co.uk/opinion/co ... 67257.html

Pharma R&D can be both expensive and a small share of total operating expenses. The same firm might plausibly consume most remaining funds for other operations (legal, marketing, manufacturing, distribution, etc.) to maintain itself as going-concern.

On sizable profits... a few large established firms with some price setting power and the scale to compete will give you that. Here though, the maligned me-too drugs can help siphon away potential monopoly profits for certain treatments or drug classes, lowering consumer cost while increasing available alternatives.

Paragraph 2 speaks to a not uncommon market structure; the situation can be difficult to improve upon.

[R00k]

R&D costs have always been given as the reason why we pay so much more for drugs here than other countries do. The fact that those costs are such a small part of pharma's budget belies that justification. Which is probably the point behind Fender's posting that.

Also, I know you don't live over here, but if you saw first-hand exactly how much marketing goes on for drugs in the States, your view that the situation is "difficult to improve upon" would most likely be a bit different. Granted, a big part of that budget exists because they are allowed to market directly to consumers, which they shouldn't be IMO. But they also spend a lot of money giving perks to doctors who will agree to push a certain number of their pills to patients, and similar tactics.

[Massive Quasars]

R&D costs have always been given as the reason why we pay so much more for drugs here than other countries do. The fact that those costs are such a small part of pharma's budget belies that justification. Which is probably the point behind Fender's posting that.

You pay a premium because the US is one of the few markets in which they can price without take-it-or-leave-it government negotiated discounts. Firms will accept most any pricing regime above their production costs, controlling for arbitrage across markets. However, the diminished current and expected return on investment will shape their future R&D funding commitments.

Drug R&D exposes the firm to a somewhat indeterminate risk which is not easily priced. Meanwhile years can pass from initial lab work to drug approval, with a punishing discount on investment return. Promising start-up buyouts and later-stage drug purchases may only shift this cost burden around rather than ameliorate it. Might explain why large corporations with capital cushions are the few to pursue such boom/bust ventures to fruition.

Also, I know you don't live over here, but if you saw first-hand exactly how much marketing goes on for drugs in the States, your view that the situation is "difficult to improve upon" would most likely be a bit different. Granted, a big part of that budget exists because they are allowed to market directly to consumers, which they shouldn't be IMO. But they also spend a lot of money giving perks to doctors who will agree to push a certain number of their pills to patients, and similar tactics.

Paragraph 3 speaks generally of natural monopolies and oligopolies as the difficult to improve upon outcomes.

Drug advertising, doctor perks and the like are concerning IMO. Consumers are woefully under-informed counter-parties in this transaction, and doctors are typically their intermediaries with principal discretion as to medication. Less difficult to improve upon, perhaps. Let's remember though that in-kind gifts already work-around previous restrictions on cash transfers.

[menkent]

Palin accuses Pres. Obama of plotting to kill her retarded baby

looks like i was right about her reason for resigning - no political fallout for public lies and fear-mongering. she can ride around like a knight in moronic armor for all the "birthers," tea-baggers, and wannabe objectivists for the next three years without ever being forced to issue a retraction or apology for making up vicious bullshit.

[GONNAFISTYA]

You mean she's a news reporter?

[R00k]

You pay a premium because the US is one of the few markets in which they can price without take-it-or-leave-it government negotiated discounts.

That's a bit of stating the obvious, isn't it? After all, that's what this entire debate is about.

Firms will accept most any pricing regime above their production costs, controlling for arbitrage across markets. However, the diminished current and expected return on investment will shape their future R&D funding commitments.

Drug R&D exposes the firm to a somewhat indeterminate risk which is not easily priced. Meanwhile years can pass from initial lab work to drug approval, with a punishing discount on investment return. Promising start-up buyouts and later-stage drug purchases may only shift this cost burden around rather than ameliorate it. Might explain why large corporations with capital cushions are the few to pursue such boom/bust ventures to fruition.

Again, no revelations here. I'm not trying to be dismissive -- I just feel like either I am missing your point, or you are teaching an Economics 101 course. Even though we all know the way things work currently, it is obvious that a lot of people here are unhappy with it, so what's in order is creative input on solutions to the problems. I will go one step further though and make the point that drug manufacturers have more incentive than it seems a healthy/balanced economy would normally bear, since they are quickly creating new drugs for imagined/manufactured conditions and then using massive amounts of spending to attempt to artificially create markets for their products.

Paragraph 3 speaks generally of natural monopolies and oligopolies as the difficult to improve upon outcomes.

I wouldn't classify natural monopolies as "difficult to improve upon" unless you have an ideological opposition to government regulation. In fact, I'd say that we have mitigated other monopolies that were much more natural than drug R&D - and done it well. So I still don't accept your characterization.

Drug advertising, doctor perks and the like are concerning IMO. Consumers are woefully under-informed counter-parties in this transaction, and doctors are typically their intermediaries with principal discretion as to medication. Less difficult to improve upon, perhaps. Let's remember though that in-kind gifts already work-around previous restrictions on cash transfers.

We agree there, although I'm not sure the point behind your mentioning that gifts are just a way to work around regulations against cash bribes. It's a given that people/companies will attempt to skirt around laws and regulations. That only means they need to be created with a lot of forethought. Just because a perfect world is impossible to attain doesn't mean you shouldn't strive for it.

[GONNAFISTYA]

If anyone's interested, last night's Real Time with Bill Mahar had focused the entire show on the healthcare debate.

[Massive Quasars]

You pay a premium because the US is one of the few markets in which they can price without take-it-or-leave-it government negotiated discounts.

That's a bit of stating the obvious, isn't it? After all, that's what this entire debate is about.

The un-parsed paragraph makes the point that there's a likely innovation trade-off to this practice. One that seems under-stated by commentators, and so my emphasis.

I will go one step further though and make the point that drug manufacturers have more incentive than it seems a healthy/balanced economy would normally bear, since they are quickly creating new drugs for imagined/manufactured conditions and then using massive amounts of spending to attempt to artificially create markets for their products.

The conditions aren't imagined, their worthiness of scarce attention and resources is however open to question (and potential targeted regulation).

I wouldn't classify natural monopolies as "difficult to improve upon" unless you have an ideological opposition to government regulation. In fact, I'd say that we have mitigated other monopolies that were much more natural than drug R&D - and done it well. So I still don't accept your characterization.

It's my observation from decades of industrial organization research/literature. Difficult does not imply infeasible; the metric is social welfare for clarification.

We've put distributional impositions on these firms in practice, but conceded/ignored the welfare loss to society.

We agree there, although I'm not sure the point behind your mentioning that gifts are just a way to work around regulations against cash bribes. It's a given that people/companies will attempt to skirt around laws and regulations. That only means they need to be created with a lot of forethought. Just because a perfect world is impossible to attain doesn't mean you shouldn't strive for it.

'Only' is the wrong qualifier here. Otherwise, by all means.

[R00k]

Unintentional irony:

Tea Party protester against health-care reform starts a fight in a town hall, and gets injured. Now he is in a wheelchair with a bandage on his knee, asking for donations to help him pay for his medical bills, because he was recently laid off and does not have health insurance.

http://www.kansascity.com/news/politics ... 73035.html

You can't make this shit up.

[HM-PuFFNSTuFF]

I was speaking with my dad yesterday and he was explaining how he couldn't understand anyone fighting to keep an insurance plan that let's the insurance company decide whether you get a certain procedure or not (as opposed to your doctor deciding). Crazy.

[GONNAFISTYA]

Unintentional irony:

Tea Party protester against health-care reform starts a fight in a town hall, and gets injured. Now he is in a wheelchair with a bandage on his knee, asking for donations to help him pay for his medical bills, because he was recently laid off and does not have health insurance.

http://www.kansascity.com/news/politics ... 73035.html

You can't make this shit up.

Jesus titty fucking Christ that's so funny.

"Socialism is evil but we need your money to help people."