[rayiner]

Typical R&D spend in pharma as percentage of revenues is 10-20%. That’s in the same range as Google, Intel, or Microsoft, which are widely considered to be very efficient structures for turning money into innovation. By your reasoning, we could cut out a lot of the fat and get better R&D for less by nationalizing Google.

[eecc]

Of the main customer of Google was the government itself then why not? (The point is: it’s not. So so what’s your point?)

[rayiner]

Who the customer is has no bearing on whether a company spending 15% of revenues on R&D is a sign of efficiency or inefficiency. If your premise was true—that you can achieve increased efficiency by nationalizing research because it lets you cut out the other costs of running a company, then that principle would be applicable to Google as well as Novartis.

[sykhotic]

But if twice as much is spent on marketing then in the case of pharmaceuticals it appears this is inefficient. These drugs tend to be necessary for people in ways that Google is not. There are cases where people live in penury due to high drug costs. From the perspective of beneficial to society it seems from my perspective that this is inefficient. Whether or not Google is efficient isn’t relevant in this matter as far as I can tell.

The typical argument for justifying high drug costs is that it costs lots of money to do R&D. This argument loses weight when the marketing costs are twice the R&D costs. Further to this point is the fact that the actual discovers aren’t the ones getting the big rewards of their discoveries. So it all appears inefficient in ways that don’t matter when applied to Google due to the fact that ultimately we are talking about peoples’ financial and physical health.

[dodobirdlord]

> But if twice as much is spent on marketing then in the case of pharmaceuticals it appears this is inefficient.

Marketing includes the cost of bringing the new compound to the attention of medical professionals who might benefit from knowing about it. This means hosting conferences, having representation at conferences/trade shows/exhibitions, seminars and other educational material, etc. Medical professionals are busy people who don't have time to independently research every new compound being brought to market, so someone has to make it very easy for them to learn about new compounds and easy for them to determine if it's something they need to care about. Hospitals and pharmacies have to be convinced that it's something that should be stocked, insurance companies have to be convinced that the treatment is cost effective enough to justify covering.

> These drugs tend to be necessary for people in ways that Google is not. There are cases where people live in penury due to high drug costs. From the perspective of beneficial to society it seems from my perspective that this is inefficient.

The resources that are expended to create new drugs could in the short term be spent far more efficiently on saving lives were it all donated to the Bill and Melinda Gates Foundation. The benefit to society of drug research is not the well being of those people that a drug can treat when it is created, but rather that the drug now exists and will be available for all time. On the balance of the moral calculus, what happens during the 10-15 year window in which the drug is available and still protected by patent is totally negligible.

[Entalpi]

Lets not say that Google and Pharma companies operate under the same conditions. There are enough of brainjuice in the world to study both in isolation.