Author Topic: Biden: Drug Companies Will Have to ‘Come to Us’ and ‘We Will Set the Price’  (Read 1005 times)

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Online Maj. Bill Martin

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Alright folks.  Take a deep breath, and consider:  when a good or service is sold in a "natural monopoly" due to the absurdity of introducing redundant infrastructure to produce competition, we call the provision of the good or service a utility and regulate prices in the public interest, at least when demand for the good or service is inelastic because it's a necessity (e.g. clean drinking water provided to the tap, which we have usually socialized at the local level, or electricity or piped-in natural gas which we haven't).

You are pointing to products/services that are mature -- where the infrastructure is already present, and all that is required are relatively predictable/stable operating and maintenance costs.  So, a fixed rate of return -- even one paired to the cost of raw materials -- can work decently.  Also, the products you are talking about are fungible -- a KwH is a KwH, a gallon of water is a gallon of water, and an MCF is an MCF, regardless of how or by whom it is provided.  So, you have a clear, objective, stable measurement of the product being produced/delivered so pricing is predictable and quantifiable in advance.  You also are talking about products/services that are inherently monopolistic such as water, and local distributors (thought not suppliers) of gas/electricity.  That latter point is important -- why do you think suppliers of gas or electricity are free to charge what they wish, but the local distributors who actually deliver it to homes via pipes/conduits are not?

Quote
Explain, then, why so many on this board regard the regulation of price of goods with inelastic demand because they are necessities (e.g. the only effective drug for a potentially fatal illness) which are sold under an artificial monopoly called a "patent" created only by government intervention in the market is obnoxious to free market economics.  Development costs?  Nope, utilities also have sunk costs in infrastructure, but they are regulated in the public interest.

1)  They're not monopoly providers.  There are multiple drug companies who compete against each other for the development of new drugs. 

2) They are not providing necessities in the normal sense of the word.  Necessities are things that a particular society cannot survive without.  But by definition, newly developed drugs are things society has survived without even last week. Even if a company decided it was no longer going to sell new drugs - a withholding of a good/service equivalent to turning off your water -- the tens of thousands of drugs already developed and outside patent, as well as all the drugs developed overseas, would still be available for purchase.  We'd be chugging along just as well as we were a week ago.  The developers of new drugs don't have the power to bring a society to its knees in a matter of day by withholding their product.  The utilities you mentioned do.

3)  Drugs are not fungible like KwH of electricity, or gallons of water, so the predictability of pricing is impossible.  That problem is magnified by the reality that most drugs that begin development never make it to market, so you don't know if the thing you're developing for sale can even be sold at all.  So how to you account for the cost of that?

4)  Most importantly, if you treat drug companies like a utility -- with guaranteed rates of return, build-in profit margins, etc., that's exactly how they're going to act.  You will significantly reduce their incentive to take the financial risks inherent in developing new drugs, because the chance to make a big profit for the limited period under the drug is no longer under patent won't exist.

Offline Fishrrman

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With the egregious overcharging for their products by some drug companies, threats like that made by Biden are to be expected.

And they will engender considerable public support, "facism" or no.

See:
Epi-pens...

Online edpc

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With the egregious overcharging for their products by some drug companies, threats like that made by Biden are to be expected.

And they will engender considerable public support, "facism" or no.

See:
Epi-pens...


Epipens became expensive BECAUSE of the government.

https://www.dailywire.com/news/8764/two-real-reasons-epipen-prices-skyrocketed-ben-shapiro
I disagree.  Circle gets the square.

Offline 240B

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What happens when Biden says the same thing about electric/gas/water or college tuition prices?
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Offline Victoria33

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@Cyber Liberty

Went to family doctor.  Had a breaking out of dryness/roughness on my hand, a type of eczema he said.  He sent in a prescription of a cream for me to get at Walgreen's where I get all my meds.  I went in pharmacy, Bob stayed in car.  The price of the cream was over $1,000 even with my insurance.  I refused the cream, went back to car.  Bob said I needed the cream so he would pay for it.  We both went in drugstore to pharmacy.  The manager must have already talked to the clerk because they both immediately came to the counter and manager told us they had the same cream from another company and it would be $20 with my insurance.

Does the above make any sense at all?  One company over $1,000 for me to pay and one $20.  If I had paid the over $1,000, I would never have known there was one for $20.  This should never happen to anyone.  What if that had been a life saving medicine that cost over $1,000 and there was the same thing for $20 and they didn't tell me?  Both the clerk and manager seemed "sheepish" when manager said $20. 

I think we should always ask the clerk at drug store, before we buy a med, if there is a cheaper one of the same medicine.   The cream did do away with the eczema.
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Online Cyber Liberty

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Went to family doctor.  Had a breaking out of dryness/roughness on my hand, a type of eczema he said.  He sent in a prescription of a cream for me to get at Walgreen's where I get all my meds.  I went in pharmacy, Bob stayed in car.  The price of the cream was over $1,000 even with my insurance.  I refused the cream, went back to car.  Bob said I needed the cream so he would pay for it.  We both went in drugstore to pharmacy.  The manager must have already talked to the clerk because they both immediately came to the counter and manager told us they had the same cream from another company and it would be $20 with my insurance.

Does the above make any sense at all?  One company over $1,000 for me to pay and one $20.  If I had paid the over $1,000, I would never have known there was one for $20.  This should never happen to anyone.  What if that had been a life saving medicine that cost over $1,000 and there was the same thing for $20 and they didn't tell me?  Both the clerk and manager seemed "sheepish" when manager said $20. 

I think we should always ask the clerk at drug store, before we buy a med, if there is a cheaper one of the same medicine.   The cream did do away with the eczema.

Must have been the first time the Doc wrote that scrip.  They wise up quickly when patients give them the riot act for doing it.  I know I would.
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Online The_Reader_David

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1)  They're not monopoly providers. 

The company that has been granted a patent -- a monopoly -- on the only treatment for [fill in a disease here] is, not suprisingly, a monopoly provider.


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Online InHeavenThereIsNoBeer

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The company that has been granted a patent -- a monopoly -- on the only treatment for [fill in a disease here] is, not suprisingly, a monopoly provider.

Nope, doesn't meet the criteria for monopoly, as other companies could come up with alternative treatments.  It's simply IP protection for a (supposedly) limited time to promote innovation.
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Online The_Reader_David

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Nope, doesn't meet the criteria for monopoly, as other companies could come up with alternative treatments.  It's simply IP protection for a (supposedly) limited time to promote innovation.

Reifying the government grant of a monopoly as "intellectual property" (incidentally a notion the Founders would have objected to, since the whole point of the Patent and Copyright clause was to limit the granting of monopolies to authors and inventors, not to create monopolies which could be transferred in toto to a publisher or manufacturer) and noting that the grant of a monopoly is time limited does not change the fact it's a monopoly. 
And when they behead your own people in the wars which are to come, then you will know what this was all about.

Online Cyber Liberty

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In the real world of IP, other companies will manufacture the item, and pay licensing fees to the holder of the Patent if it's worth the cost.  Samsung and Apple had a battle royal over displays a few years back, IIRC, and the losing company wasn't prohibited from manufacturing the displays, they had to pay a licensing fee to the winner. 

Sure, it adds expense, but is it being a Monopoly?
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Online InHeavenThereIsNoBeer

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Reifying the government grant of a monopoly as "intellectual property" (incidentally a notion the Founders would have objected to, since the whole point of the Patent and Copyright clause was to limit the granting of monopolies to authors and inventors, not to create monopolies which could be transferred in toto to a publisher or manufacturer) and noting that the grant of a monopoly is time limited does not change the fact it's a monopoly.

It's not a "fact" that it's a monopoly just because you think so.  It has to meet the criteria, which it clearly does not.
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Offline Victoria33

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already posted this.
« Last Edit: August 14, 2019, 11:50:25 PM by Victoria33 »
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Offline Smokin Joe

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Well, yes and no.  The drug companies can always choose not to sell the drug in those other countries below the (higher) price they want to charge in the U.S..  It would all depend upon whether the increased volume that comes from selling the drug overseas makes up for the lower price at which they'd have to sell it in the U.S..

But either way -- 1) keeping the price high here and not selling it overseas, or 2) lowering the price here to match what it is sold for overseas, the net result is going to be lower revenues from the development of that drug.  And if they expect revenues to be lower, then they're not going to invest in as many new drugs.

And that's why I'd agree with you that requiring drug makes to sell it at the same price here as they sell it overseas ultimately is a bad idea that will hurt Americans.  It's just not as bad as the U.S. government setting the actual price at which the drug must be sold.
Right. Sell it for the same price as it costs in the US, when Americans make more an hour than many there make a week.

Whatever happened to charging what the market will bear?

Watch Big Pharma move offshore. Then they can charge what they please or you can do without.
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Online verga

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That is a sure formula to kill the incentive to do more medical research. We already have a shortage of Doctors and nurses, due to the government control of Medicare/ medicaid.
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Offline Smokin Joe

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That is a sure formula to kill the incentive to do more medical research. We already have a shortage of Doctors and nurses, due to the government control of Medicare/ medicaid.
It's all in keeping with the desire to control people .
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Online libertybele

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I didn't read the article; just commenting on the title; 'Will have to "Come to Us" and "We will set the Price"...sounds like a scenario for "The Godfather". 
"I believe in the United States of America as a Government of the people, by the people, for the people; whose just powers are derived from the consent of the governed; a democracy in a republic; a sovereign nation of many sovereign states; a perfect union one and inseparable; established upon those principles of freedom, equality, justice and humanity for which American patriots sacrificed their lives and fortunes. I therefore believe it is my duty to my country to love it; to support its Constitution; to obey it laws; to respect its flag; and to defend it against all enemies." -William Page

Offline Chosen Daughter

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It’s not unbelievable. It’s exactly what happens in European countries that control healthcare. Plus, this admin has proposed using that index for price matching.


Trump Proposes Setting Some Drug Prices Using Global Index

https://www.bloomberg.com/news/articles/2018-10-25/trump-to-attack-global-freeloading-in-drug-price-address


Trump aims to make US drug prices like Europe's

https://www.msn.com/en-us/news/politics/trump-aims-to-make-us-drug-prices-like-europes/ar-AAEQaLq


Trumps not much different than creepy Joe.
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4:34 AM · Aug 21, 2019

Offline Chosen Daughter

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I didn't read the article; just commenting on the title; 'Will have to "Come to Us" and "We will set the Price"...sounds like a scenario for "The Godfather".

True.
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4:34 AM · Aug 21, 2019

Offline Gefn

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@Victoria33

I paid $300 last week for a script.  The second one was 1.83.

@Chosen Daughter like your new avatar.


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Offline Victoria33

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I didn't read the article; just commenting on the title; 'Will have to "Come to Us" and "We will set the Price"...sounds like a scenario for "The Godfather".
@libertybele

Yes, it does, that is what I thought, too.  One man should not have the power to regulate anything the pubic uses.
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Offline jafo2010

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The problem is, the drug companies MUST deal with governments, in other nations, because they run the healthcare systems. We end up paying more, because they make it up on the back end, after giving other nations the discount. What's likely to happen, if we get into this game where the pharma companies have to honor the lowest price, is they'll do the bare minimum to develop new treatments, if they bother at all. It's similar to the development of the polio vaccine. The saying at the time was 'put government in charge of treating polio and we'll develop the world's best iron lung.'

Our healthcare, which includes pharma is out of control and not operating in the best interest of our population.  I have mentioned this on other threads, but the way pharma operates in the USA is abusive.  To claim that the effort to create a more fair market for USA citizens would curtail efforts in the pharma industry is just plain wrong.

If the USA establishes a policy of pharma must sell any and all pharma for the same price as the lowest in the market, what that will do is increase rates in the rest of the market while lowering them here.  How bad is the present day abuse?  Extreme!!

Well, Cipro is $120-$200 per script here.  In 2001 when I was in Russia, I bought Cipro for $2 and I did not need a script from a doctor, I could go down to any drug store there and buy one or buy 100 scripts.  This is wrong.  Citizens in the USA have been bent over by pharma and corrupt politicians for decades, and this abuse has to end.

Folks here have mentioned high cost pharma.  I went to a doctor for a rash, she wrote a script that cost $650, my Blues coverage denied the script.  So, I called and said, can't you write a script that is more reasonably priced, she sent over a script to the pharmacy that had a total cost of $10.  The difference is the doctor I am certain was getting a huge kickback for the high cost pharma.  And I would bet that same drug is $10 in other countries.

It is time the politicians in the USA begin representing the citizenry of the USA.  PERIOD!!!  Again, this is why Trump resonates, for at least he is trying to do something for the American people, which is more than the Democrats and Republicans have done for anyone in decades.

Offline Hoodat

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Biddn proves he lacks the economic intelligence to operate a neighborhood lemonade stand.
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Offline Smokin Joe

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Offline Hoodat

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Joe needs to read a couple of chapters of that Russian-American writer's book.

Directive 10-289
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