[rdtsc]

> Right now US citizens are basically subsidizing other countries when it comes to drug revenue via price gouging.

I am ok with that. They can take even more taxes out every month if it means people get access to better healthcare.

[jessriedel]

Does it bother you that Europe and the rest of the developing world also free-ride subtantially?

[rdtsc]

Not particularly.

By the way pharmaceutical companies also free ride on public universities. Research is often done there. Even if it is from grants, it often means professors end up working and spending their time for pharma companies instead of doing other things like teaching students.

Moreover, if our goal is to win hearts and minds and I don't know, promote Democracy (at least that is what the propaganda tells us), isn't providing health saving medication or building hospitals or schools working towards that goal better than say overthrowing their government or threatening to invade.

Going back to Western Europe, I hear it is already possibly to go to Germany (or was it Norway) and attend a 4 year university there for free. Isn't that free riding So they can have our pills and we can go there and not pay $200k in student loans. Globalization and free markets, we learned that was a good thing, right ...

[tracker1]

But pharma companies aren't competing in a free market... I can't by (prescription X) from a canadian drug store. So it's not globalized, except for the protectionist patent laws and treaties surrounding them.

It's time to reign in patent protections, specifically regarding extension patents, and bring in compulsory license maximums for prescription medicines. Give drug companies 5 years exclusivity once they react market... after that they can only charge X per day for licensing... imho that should probably be $10/day/prescription, and drop every year.

[refurb]

Price controls work so well in general, why not try them in pharmaceuticals?

[tracker1]

I'd much rather eliminate patent protections, but they do serve limited value.. the licensing restrictions for medications after 5 years at market is mainly to limit patent protections, while still providing some profit. I didn't say the company couldn't make agreements for higher, or lower amounts via contract arrangement.

Patent protections, in this case, and many others actually exceed the value they provide to larger society, so I'm in favor of limiting them in this case as opposed to removing them entirely. I understand there are a great amount of expense, but that is usually recouped within 3-5 years, and often in medication less than that.

Earlier competition will lead to better pricing structures that are less restrictive over marginalized costs. In effect benefitting consumers.

The key point in the constitution behind copyright and patents are "limited" exclusivity... those limits don't always have to be larger... sometimes they need to be smaller, and some industries aren't the same as others.

[refurb]

By the way pharmaceutical companies also free ride on public universities.

Free ride? You think pharmaceutical companies just come along and pluck the best drugs for free? No, they out-license it from the university and pay royalties.

How else would Northwestern University build a brand new chemistry building from their Lyrica royalties?

[Daishiman]

Well, it's evidently cheaper for them to get it from a public resource than actually, you know, developing it from their own labs.

So nice for them to be able to pick and choose the successful research while not having to absorb all the other, less interesting research funded with public money.

[jessriedel]

I don't really get your complaint. The pipeline from basic research to sellable drug generally takes longer than the 20 year patent lifetime. So it's impossible for drug companies to get reimbursed for the entire drug development pipeline. Rather, at a crude level, the process is split in half: first do the basic research (funded by public money), then build on the basic research and demonstrate a viable drug (incentivized by patent-protected drug sales). The value-added by drug companies is substantial regardless of wether you think some other organization could do it better.

Complaining that drug companies are free-riding on public research is like complaining that the local 7-11 is free-riding on the public safety provided by police officers.

[lhopki01]

Where is your basis for this statement? Pharmaceutical industry profit margins are about 17% which about the highest of any industry. Pharmaceutical companies spend more on advertising than research and development. Looks less like Europe and the rest of the world are free riding and more like the US is being conned.

[Zigurd]

No because the free riding is not actually substantive.

[jessriedel]

How so? The primary development incentive for the large majority of new drugs is the patent-protected revenue in the US.

[laurencerowe]

Sadly most of that money is spent on marketing [1] and most new drugs are just minor tweaks to existing compounds [2], much safer bets than brand new approaches.

[1] https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...

[2] http://healthaffairs.org/blog/2015/07/06/serious-risks-and-f...

[refurb]

Hyperbole seems to be getting worse on HN.

First off, no, marketing is not where most of the money is spent. Second, marketing spend has a positive ROI, so they get more money back than they spent.

Lastly, this entire discussion is about a wonder drug that cures a terrible disease and you claim most new drugs are minor tweaks.

[jessriedel]

Although those two points are interesting and relevant, my statement doesn't conflict with them.

Or are you claiming that Europe isn't meaningfully free-riding simply because new drug development just isn't valuable, and we'd be better off with much less drug research? I think that's a defensible claim, but it's very contentious and should be stated clearly if you believe it.