[rossdavidh]

The answer will always be, "more expensive than they are now". It's not like there will ever be a point at which more money, if available, could not in any way be used for some kind of drug research that might be useful. It's like saying "how much money do you need in order to keep from ever dying?" There will always be health problems, and there will always be some at least semi-plausible way in which we could spend money to try to research a way to at least ameliorate the condition.

So, this doesn't mean we shouldn't spend some money, or even a lot. But, it will never be enough, so at some point we will have to say, "we could spend more, and it might give us a little more life, but let's not."

I don't think we're remotely ready for that conversation.

[supertrope]

https://www.nytimes.com/2009/07/19/magazine/19healthcare-t.h...

"Why We Must Ration Health Care" by Peter Singer. New York Times Opinion Section.

Unfortunately this is a very difficult conversation to have between people and their physicians, between family members, and with ourselves. It ties into another very difficult discussion of facing death. In a democracy the lowest common denominator argument wins out with catchy slogans, in-group signaling, burying uncomfortable facts, avoiding short term sacrifice, and/or wielding anecdotes instead of rational analysis. Thus the rationing happens when it is least effective - during a crisis when significant human, monetary, and time resources are drained. And not much earlier when some planning and hard work could greatly ease the burden.

[refurb]

When people always ask "how come healthcare is so much more affordable in countries outside the US?", the correct answer is rationing.

If you need joint replacement surgery in Canada, you can expect a wait of many months to years. Canada has made the call that they will put a certain dollar amount into joint replacement and if the demand is higher, then people will just have to wait.

Same thing with the latest and greatest drugs. Some countries just say "no".

If you want an affordable healthcare system in the US, then rationing has to be a part of the equation. As others have pointed out, we already ration in the US, but trustfully, if you have good insurance, you'll get very good care in the US. The question is whether all that extra care is actually producing better outcomes.

[tdeck]

It's not only rationing care. In these other countries doctors earn a lot less than they do in the US, particularly specialists. They still make a good living though (excepting perhaps Cuba). Also administrative costs are lower and when insurance companies exist they're generally not allowed to make a profit on basic coverage, or they're not allowed to deny claims and must pay on a price schedule fixed by the government. Some of these policies can lead to shortages (i.e. if you pay doctors too little, you'll get fewer doctors), but there seems to be a middle ground that other countries have gotten closer to than the U.S.

[nine_k]

Rationing also makes some outcomes summarily worse.

If you have a relatively minor problem, you're put in a line. For months (or years) of waiting, your problem becomes worse, and when you finally get to be treated, the treatment is much costlier and less effective.

This is to say nothing about your actual suffering from the problem, and from knowing that it's deliberately not being treated.

[thatoneuser]

Joint replacement waiting a few months likely won't cause that much harm. I mean it can but it's statistical probably justified. And in fact it's guaranteed that these systems are trying to balance that.

[shkkmo]

I don't think that is true at all, it is very clear that identical procedures and materials cost less in other countries.

[refurb]

Price caps play a role, but rationing plays an even bigger role. Google search for the McKinsey paper on US healthcare costs. The volume of outpatient procedures in the US is quite shocking compared to other countries.

Yes, things cost more in the US, but the volume is also quite a lot higher.

[DanBC]

In your parent post you mention outcomes, and that's a really important thing you're missing when you talk about "rationing".

If a scan is more likely to cause harm than to treat illness is it really being rationed, or do single payer systems have an easier time not providing harmful over-testing and over-treatment options?

[thatoneuser]

Interesting about the volume being higher. In most logistical systems that would drive avg price down.

[ljcn]

Perhaps the total volume is higher, but this doesn't lead to downwards price pressure since there are many small(ish) buyers.

The opposite is often said for the NHS in the UK - certainly a smaller buyer than the US aggregate, but maybe a larger player than any one of them?

[drewrv]

The dystopian angle to healthcare rationing is the realization that we already do ration care. We do it with dollars rather than by need or outcome.

[ineedasername]

I think you're using an ungenerous interpretation of the question here. The subtext is clearly "how much do they need to cost to support the current level of research"

[DennisP]

They could spend more on research today, but don't. From the article:

> after accounting for the costs of all research—about $80 billion a year—drug companies had $40 billion more from the top 20 drugs alone, all of which went straight to profits, not research. More excess profit comes from the next 100 or 200 brand-name drugs.

[maxerickson]

That doesn't really address the interesting question though, which is more about what level of spending is reasonable given the underlying basic science and currently available treatments.

Spending enormous sums on vague, incremental improvements is likely not an important use of funds.

[djrobstep]

The hypothetical situation you're describing has no connection to the reality of how drug research money gets allocated.

We're not even ready to talk about how:

- drug companies spend more money on marketing drugs than researching them

- drug companies waste much of their research on copycat drugs rather than new treatments

- IP law needlessly denies millions access to existing treatments by artificially inflating prices.

[barry-cotter]

> drug companies spend more money on marketing drugs than researching them

Free samples to doctors are counted as a marketing expense at retail prices, not at marginal prices

> drug companies waste much of their research on copycat drugs rather than new treatments

Marginal improvements are actually a huge deal and make for a lot of improvement. Because of our astonishing ignorance doctors will often go through multiple drugs looking for one with good efficacy and side effects profile with different patients.

> IP law needlessly denies millions access to existing treatments by artificially inflating prices.

It’s not needless. Someone needs to pay for pharmaceutical R&D for the global market. Right now that someone is US consumers (mostly in the form of high insurance premia). If they don’t pay then either the pace of drug R&D will fall or some other mechanism will need to be found to pay for it.

As to pharmaceutical company profits, their return on capital is nothing special, not like academic publishing rent seekers like Elsevier.

[ikeboy]

>Free samples to doctors are counted as a marketing expense at retail prices, not at marginal prices

That doesn't sound like GAAP - is this proper accounting?

[barry-cotter]

I don’t know if it’s proper accounting but there’s no way the marginal cost of producing drugs is high enough to cost as much in marketing costs as they do.

> Between 1996 and 2000, they accounted for slightly more than half of the total promotional dollars spent by industry [22]. Although there is controversy about how best to tally the amount of money the pharmaceutical industry spends on free samples, a recent analysis of 2004 figures sets the retail value of samples at approximately 16 billion US dollars [23]. The retail value of free samples has risen steadily, doubling between 1999 and 2003 [24] (Figure 1).

Chimonas S, Kassirer JP (2009) No More Free Drug Samples? PLoS Med 6(5): e1000074. doi:10.1371/journal.pmed.1000074

https://journals.plos.org/plosmedicine/article?id=10.1371/jo...

[ikeboy]

https://www.pewtrusts.org/en/research-and-analysis/fact-shee... puts recent spending around $5 billion on samples. Seems reasonable for actual cost, not retail.

[ineedasername]

Yeah, I'm not a pharmaceutical, but I have a side hustle of sorts. When I give something away, I'm only allowed to deduct the marginal cost.

[cosmie]

But marginal cost for whom? The entity manufacturing the drug, the entity that holds the inventory, the entity that owns the IP, or the entity that the pharmaceutical rep works for?

Any sufficiently large corporation is more likely than not to be an amalgamation of interconnected subsidiaries, for a wide variety of purposes. Once you're at that stage, there's a lot of room to get creative with how you structure intra-company charges to form whatever optics you want. It's entirely plausible that one internal entity may charge the marketing entity full retail price for samples, if they feel it's beneficial and have enough justification to satisfy accounting and auditors that it's a fair market value for the product (which list price would generally satisfy that requirement).

[ineedasername]

Good points, they can just shuffle the money from one balance sheet to another, but then get to deduct the whole thing anyway.

[refurb]

The other major cost with pharmaceutical marketing is just personnel. When you have 200,000 prescribers (for example) in the US, you're going to need thousands of sale reps. Otherwise how else do you communicate with your customers?

[djrobstep]

> Marginal improvements are actually a huge deal and make for a lot of improvement.

The problem is that these decisions are made on a marketability basis (hence, a plethora of impotence treatments for rich old men) rather than a public health basis.

> If they don’t pay then either the pace of drug R&D will fall or some other mechanism will need to be found to pay for it.

When you hear about it, the concept of public funding is gonna blow your mind.

[barry-cotter]

Racism and ageism aside I agree with you, but I have serious concerns about any but incremental changes to the system we have, since it works. There’s lots and lots of drug development and we get new and better treatments every year.

My preferred system of public funding would be one where the government buys out a patent and places it in the public domain or a prize system. The government would estimate the value to it (or to its citizens) of curing or alleviating some disease, with some objectively verifiable success criteria and then offer a prize of, say 0.7 that amount.

You get the good parts of private enterprise, like experimentation, knowledge elicitation and market coordination. You also avoid the bad parts of government provision, like endless bureaucracy, form filling and the legendary efficiency of Lockheed Martin. If government pharmaceutical research worked well we'd know. The Soviets developed a different psychiatric pharmacopeia and phages and the Chinese found artemisin but it’s not a great record compared to the West.

Fundamentally someone has to pay for this. Right now its the US consumer. If you want to put that cost onto the budget good luck in politics, whether you’re talking about the US budget, the German one or the Chinese.

[djrobstep]

> Racism

?????

> bad parts of government... Lockheed Martin

????

What you say is absolute FUD. The US already has publicly funded biomedical research, which works fine (the NIH). Just needs to do it all that way and put all the research into the public domain.

> If you want to put that cost onto the budget good luck in politics, whether you’re talking about the US budget, the German one or the Chinese.

Weak argument. The US consumer is already being ripped off by drug and insurance companies, and would save money from a public system.

[refurb]

drug companies waste much of their research on copycat drugs rather than new treatments

Innovations in pharmaceuticals is often incremental, not huge leaps forward. You have 4 different cancer drugs, each one adds 6 months of life for each launch and you end up with 2 extra years of life.

As well, copycats are needed, because not every drug reacts the same in everyone. If you need to lower your cholesterol, you have dozens of different statins to choose from. Some you won't be able to tolerate, others you can. Options are good, not bad.