Don't they do a better job in lots of other countries? I'm not an expert, but my understanding is that a lot of the countries with socialized medicine such that their government is the one negotiating with drug manufacturers pay substantially less for drugs than customers in the US.
In other countries, government “negotiation” is just a euphemism for price controls. An example of this is Canada’s Patented Medicine Prices Review Board, which regulates drug prices. This isn’t “negotiation”, this is just centralized policy-driven price control.
The US could very well institute their own price controls on drugs, but it wouldn’t invalidate the value in services like Amazon’s, especially if the price controls in question do not create a lower bound on prices, but instead focus on setting upper bounds.
I support price controls in the US, and the government manufacturing generics if necessary (stepping in if the private sector won't due to it not being profitable enough).
EDIT: I removed an unrelated paragraph about Planned Parenthood and drug supply chain I thought was out of scope.
> stepping in if the private sector won’t due to it not being profitable enough
That’s effectively what government-enforced drug patents are for. I think it’s debatable whether that’s the best implementation of what you’re describing. Government sponsored “Prizes” are another approach that sounds promising -> https://marginalrevolution.com/marginalrevolution/2020/03/pr...
I donate to Planned Parenthood as well, and decoupling drug purchasing from insurance is a reliable way to make sure that everyone can get access to birth control or contraceptive, even if their employer feels strongly opposed to it (eg Hobby Lobby).
The US Pharma market is full of "found $20 bills" that just shouldn't exist if markets were as efficient as people wishcast they would be. I'd love for someone to rationalize PBMs in the same manner they rationalize every other horrible inefficiency in US health care.
> The US Pharma market is full of "found $20 bills" that just shouldn't exist if markets were as efficient as people wishcast they would be
This presupposes that the US pharma market (and healthcare writ large) constitute an actual market. It's really not, by just about any measure. The only thing remotely resembling a "market" is the fact that insurance is predominately provided by the private sector for profit. Outside of that, the industry is ridden with the worst combination of distortionary incentives and regulations. The fact that healthcare is tied to employment didn't happen by accident, it's the net result of WW2-era wage ceilings, followed by 1970's tax deductibility for employer group plans, followed by the ACA employer mandate. I'd describe the US as combining the worst of public healthcare systems with the worst of privatized systems. PBMs and every other horrible inefficiency of US healthcare aren't some accident of a functioning market.
No offense to you in particular - but every time something changes in US Healthcare to make it more "free", costs continue to rise apace and people exclaim, "If it were just a bit freer market, everything would be cheaper and things would be better."
It really strikes me as a no-true-scotsman's analysis of our health system. Why not just adopt one of the competing alternatives wholesale and admit defeat?
The way you describe it makes it sound like there’s some theoretical ideal that has never been attained, and there’s a group of people arguing for that...except that’s not true.
It’s important to have that discussion because it has implications on what approach we take. I think there’s generally broad agreement that the status quo is bad...there’s just violent disagreement as to why it’s bad. There are a number of ways to fix it (and not just the one proposal you keep hearing about).
Simply decoupling healthcare from employment while keeping it private is one approach. We know that this is efficient, because it’s what Medicare Advantage is, and that’s actually cheaper and better than Original Medicare.
Providing universal catastrophic care with savings accounts is another approach that has shown empirical success. It’s how Singapore’s health care system works, and it is widely regarded to be the most efficient healthcare system among the advanced economies.
> Why not just adopt one of the competing alternatives wholesale and admit defeat?
I agree! If it were up to me, we would adopt Singapore’s system wholesale. Either that, or, Switzerland’s. Or we would just have everyone in the US be on Medicare Advantage.
These companies are international so they can choose to not do business with a country. It is a negotiation, just one that governments tend to do better at. If Blue Cross North Dakota sits down at the negotiating table and then Aetna New York sits down at the negotiating table and then Canada sits down and then the European Union sits down, who is going to win a good deal and who is going to get screwed?
You can say it's cheating when governments win lower prices for their citizens like this but I'm not much inclined to care. I don't want to subsidize the continuation of our more-market-based-than-usual health care experiment when the results have been clear for decades. Compared to our peers, we're in a hole. Let's stop digging.
I've been reading some books on the medical industry and one of the things pointed out is that the price controls will often not provide enough profit to R&D new drugs. That the US ends up subsidizing a lot of R&D cost that everyone benefits from.
If this is the case, I wonder what would happen to drug development if that goes away.
Note, I'm not saying there's not too much profit from drugs. These statements don't have anything to do with that.
Initial discovery research is pretty much entirely tax payer funded. There's then a second phase, moving from that discovery to POC, that is extremely underfunded, and which a lot of charity and such funding goes toward. It's only the last phase, taking POCs -> product, that companies really invest in. https://www.ncbi.nlm.nih.gov/books/NBK50972/
Note, too, that private companies tend to fund research toward common first world diseases, since they're profit driven, and far less to niche and/or common third world diseases. So not only do they not fund early discovery (government does that), nor generally moving those discoveries to POCs ('valley of death', and charitable foundations and the like do that), they also leave plenty of potential meds untouched, since the likely profitability is low.
I've heard that argument, not sure how much I buy it. Seems the drugs that get developed tend towards niche applications, while common diseases that affect mostly uninsured people are addressed by places like the Gates foundation.
The rich ones can benefit from it, and then it gets added to the claims that the US has the world's best healthcare system that helps convince the rest that the system should be kept.
That’s why we should tie our drug prices to the prices other countries pay. I believe Trump did that (or talked about doing it?) for Medicare, but it’s absolutely insane we haven’t done it across the board.
Republicans would be hesitant due to “regulations bad,” and Democrats don’t want to improve our current system because they’d rather throw it out. And of course both sides get donations from pharma.
