[dillondoyle]

I can confirm in the US it is truly that expensive (which is fucking crazy). I have pretty good insurance (or at least the best I can get self-buying) but I still have to pay 30% of meds costs. That is something like $400 /month. Luckily Gilled will reimburse up to 7500 /year.

Fucked up private insurance in US, they charge that much and then do the reimbursement so they can bill the huge monthly cost to plans / government that will cover it.

We should be giving this out for free.

My MD said Truvada might go generic next year, so perhaps there's hope.

[malandrew]

In the US, we’re paying obscene prices because no other country pays their fair share to recoup the cost of development plus bringing the drug to market plus a reasonable margin for the effort.

The US should establish an agreement whereby US patients pay a LOT less but that the foreign patients need to pay the same.

The amount the industry earns should be low enough to make it reasonably financially accessible to patients but high enough to prompt our best and our brightest to pursue new drug development as a career.

[tonyarkles]

> During the quarter [2019 Q2], Gilead generated $2.2 billion in operating cash flow, repaid $500 million of debt, made dividend payout of $800 million and spent $588 million on share buybacks.

> Adjusted product gross margin was 87.3% compared with 84.2% in the year-ago period. Research & development (R&D) expenses were relatively flat at $916 million. Selling, general and administrative (SG&A) expenses increased 20.8% to $1.01 billion.

https://finance.yahoo.com/news/gilead-gild-q2-earnings-sales...

They’re doing OK, I think.

[malandrew]

You're basing your argument on cherrypicking one single pharmaceutical company that is doing exceptionally well recently because it had the second best selling drug of 2018, Harvoni, a drug to treat Hep C.

What about when you take all the pharma companies and average how well they do over several years? The average net profit margin for the industry is 14.05% according to a January 2018 study by New York University’s Stern School of Business.

14.05%, not great, not terrible.

In addition, the overwhelming majority of those dividends and share buybacks from one company are subsequently plowed back into the industry in different companies depending on which of those companies are working on the most profitable drugs.

source: I have several friends that control a lot of AUM that specialize in pharma investments.

[tonyarkles]

> You're basing your argument on cherrypicking one single pharmaceutical company that is doing exceptionally well recently because it had the second best selling drug of 2018

Well, the discussion was about the atrocious cost of HIV medication, and Gilead is the company that holds the patent on Truvada. You didn't provide a link, but http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/... suggests it's actually lower in 2019 at 10.94%.

From the linked Excel sheet there, there are 28 industries with higher net margins, and 65 with lower net margins. They're still doing just fine :).

[malandrew]

28 with higher net margins and 65 with lower net margins.

As I said, not great, not terrible. They're doing just fine, but they are also far from abusing their position. An industry abusing its position would be one with higher net margins than almost all other industries. The fact that 30% of industries have better net margins suggests that this industry is far from being abusive in its pursuit of profit while improving people's quality of life.

[rowanG077]

14.05% Is FUCKING GREAT considering they make their money over the misery of people. It's actually a disgrace that the profit margin is anything over 2%.

[malandrew]

14.05% is perfectly reasonable considering they are giving people hope for a better quality of life.

Profiting off someone's misery would be when you cause the problem and provide the solution. If you merely recognize an existing problem and provide a solution where there previously was none or where the previous solution was inadequate/inferior.

Attitudes like yours makes me not want to continue using my talent to create on solutions to problems that qualitatively and quantitatively improve people's lives. If people are going to look at it as profiting off misery and deny me the opportunity to increase my wealth, I and others will just take our talents elsewhere. There is no lack of other industries and problems where those capable of contributing solutions can make money and not be subject to your shitty attitude towards how they make a living.

Lastly, I say all this as someone who takes an orphan drug myself that would not exist at all if the US didn't have a legal framework that gives pharmaceutical companies the incentive to bring drugs to market. The drug I take is available in only one other country and only because a US pharmaceutical company brought it to market.

[rowanG077]

I don't agree at all. No profit should be had for developing medicine. You deserve a nice salary for your work but no profit should be made by the company.

[stevesimmons]

I once presented to the monthly board meeting of one of the biggest global pharma companies. The audience was the top execs plus the top-10 country heads.

All they talked about during the dinner was price fixing, tricky deals to block generics, and schemes to maximise the amount they could get each country to pay. Nothing about the science, medicine behind the drugs, or benefits to patients.

That's the reality of pharma today.

[ekianjo]

Not just pharma. Most industries care about increasing profits and blocking competitors. Hardly surprising since Top execs are measured on such metrics.

[ben_w]

Pricing is always and inevitably what the market can bear, not anything about “fairness”. If prices are too high or communities are too poor (communities not countries), those communities go without. Right now, the US is so expensive that in cases like this it makes sense for patients to fly to another country to get the medicine. That’s unsustainable.

[Nasrudith]

It fundamentally is about fairness albeit in a peripheral sense - the market doesn't exist in a vaccuum - those high prices depend upon granted monopoly rights and regimes which are a bargin wrongly conflated with property and treated like an entitlement instead of the contracts they are. Nothing is owned - only the ability to stop others from doing things. An unfair contract is increasingly likely to be ripped up because there is nothing more to be lost by doing so.

That people are flying abroad is the start of ripping up their local monopoly along with uncertifified online pharmacy importation and grey market sales - taking risks to avoid costs is a sign that the market /isn't/ bearing it.

[LargeWu]

The reason markets don't really work well for healthcare is that 2 things efficient markets require are competition and symmetrical information. Drug companies have exclusive patents. Doctors require extensive licensing that limits the labor supply. Prices are not transparent from providers. And maybe most importantly, in many cases people don't really have a choice whether they want to participate in the market or not; it's sometimes a choice of "pay whatever they say for treatment" and "die".

[9HZZRfNlpR]

Since when the market knows the word fair? You charge as much as you can, in this case Americans are the suckers, but if it makes you feel any better for yourself and natural pride keep calling it as you pay for the whole worlds market.

[tripzilch]

Oh look you created an incredibly inefficient, expensive and corrupted system to research drugs and now you claim you spend more on drug research than anybody. Have a pat on the back.

[StreamBright]

You are paying this much because of many reasons non of them is why the rest of the world does not pay its fair share.

https://www.investopedia.com/articles/personal-finance/08061...

[Nasrudith]

Monosopy doesn't depend upon anything the US does. They have local control of IP even if they tied it to others.

There would be costs involved but they can always tell them to get stuffed and manufacture their own if they won't be reasonable. Notably there is a lack of pharmaceutical companies who decide to abandon world markets entirely because positive N is always greater than 0.

[StreamBright]

I mean US produces recently the 57% percent of new drugs.

https://media.xconomy.com/wordpress/wp-content/images/2014/0...

I am not sure this explains the discrepancy between the healthcare cost between US and Switzerland.

More in depth analysis:

"There were two causes of this massive increase: government policy and lifestyle changes.

First, the United States relies on company-sponsored private health insurance. The government created programs like Medicare and Medicaid to help those without insurance. These programs spurred demand for health care services. That gave providers the ability to raise prices. A Princeton University study found that Americans use the same amount of health care as residents of other nations. They just pay more for them. For example, U.S. hospital prices are 60 percent higher than those in Europe. Government efforts to reform health care and cut costs raised them instead. Second, chronic illnesses, such as diabetes and heart disease, have increased. They are responsible for 85 percent of health care costs. Almost half of all Americans have at least one of them. They are expensive and difficult to treat. As a result, the sickest 5 percent of the population consume 50 percent of total health care costs. The healthiest 50 percent only consume 3 percent of the nation's health care costs. Most of these patients are Medicare patients. The U.S. medical profession does a heroic job of saving lives. But it comes at a cost. Medicare spending for patients in the last year of life is six times greater than the average. Care for these patients costs one-fourth of the Medicare budget. In their last six months of life, these patients go to the doctor's office 29 times on average. In their last month of life, half go to the emergency room. One-third wind up in the intensive care unit. One fifth undergo surgery. "

https://www.thebalance.com/causes-of-rising-healthcare-costs...

You can read the rest it is very informative. I still don't think that healthcare cost in the US is caused by the rest of the world not paying their fair share in drug discovery.

[tripzilch]

> For example, U.S. hospital prices are 60 percent higher than those in Europe.

That's a rather weird statement.. I suppose it's true in some sense, but what I'm reading online from real people in the US is that they get bills that are easily 10-100x as much money for going to the hospital than I get.

There's a few others I wonder about:

> These programs spurred demand for health care services. That gave providers the ability to raise prices.

At least requires some numbers, because I'm constantly hearing about Americans not going to the doctor because for the real fear it might bankrupt them.

> The healthiest 50 percent only consume 3 percent of the nation's health care costs.

This is also questionable. Again maybe technically true, but not suitable for conclusions.

The ailments, pain and other bad stuff that Americans will walk around with instead of going to the doctor is incredible (again for the real fear it might bankrupt them). In the US I spoke to a real person who was trying DIY dentistry. There was an AskReddit thread about what general advice doctors say people shouldn't do, and the top advice was: don't perform operations on yourself.

I'm pretty sure it's the price driving down demand.

> The U.S. medical profession does a heroic job of saving lives.

Wait, why does it suddenly stop comparing to the EU?

> But it comes at a cost. Medicare spending for patients in the last year of life is six times greater than the average. Care for these patients costs one-fourth of the Medicare budget. In their last six months of life, these patients go to the doctor's office 29 times on average. In their last month of life, half go to the emergency room. One-third wind up in the intensive care unit. One fifth undergo surgery.

And this is different in the EU because ... ?

I don't like these statistics. I think they're using them to lie with.

[malandrew]

drug costs are only one piece of healthcare costs. You're comparing apples and oranges.

[StreamBright]

dillondoyle>> Fucked up private insurance in US, they charge that much and then do the reimbursement so they can bill the huge monthly cost to plans / government that will cover it.

I was reflecting to this. If drug cost is part of healthcare cost than by definition it cannot be apples to oranges comparison.