| > The point is that pretty much every other developed country and a lot of developing countries have managed to figure this out, the first over 130 years ago, and they've all had to figure out how to get agreement, overcome the objections to having it at all, overcome lobbyists, overcome medical associations wanting to keep tight control, and so on. Not one thing of this is new. The difference is the structure of the US government. The original constitutional framework envisioned a weak federal government with limited powers, with this sort of thing instead being handled by the states. The populist movement in the 20th century didn't like this, so they removed some of the most important safeguards ensuring that that remained the case -- but those safeguards were the only thing preventing the federal government from being captured by industry. So now that's what's happened. It's a structural problem because we broke the constitutional safeguards originally present to prevent it. The problem is the change is sticky because to undo it you need the votes of the people whose undeserved power you're trying to take away. This has been a problem for much more than just healthcare, but nobody has managed to solve it yet. > However, unlike the US, they have chosen to deal with it by negotiating best possible prices, usually by putting together portfolios of different drugs to negotiate over, and then deal with any perceived need to subsidise R&D into drugs that pharma companies aren't doing enough to address. You have a patent monopolist selling to a bureaucracy which is the sole provider of coverage for a large number of patients. That isn't a negotiation. If the buyer isn't allowed to refuse to buy the drug then they have no leverage. If they are then the government is just setting the price and saying take it or leave it. > It is, however, amazing how quickly the American belief in the free market collapses when someone suggests that Medicare should just act as one more actor in a market where the are already hundreds of other buyers negotiating the best possible prices. A patented product isn't a free market, it's a government-granted monopoly. The entire point of the patent is to allow the seller to charge a monopoly rent for the duration of the patent term. If you don't want to pay the monopoly rent then there shouldn't be drug patents to begin with -- but that doesn't get you out of funding the R&D in some other way instead. TANSTAAFL. > The outcome is that you're misrepresenting the cost of providing care per patient by making the per-patient cost appear ridiculous when a huge bulk of it is an R&D subsidy that the entire world benefits from, that you're choosing to carry even for the half of the top 10 pharma companies that aren't even American Yes, this is exactly the problem -- other countries "negotiate" (i.e. the government dictates prices) and thereby pay less than their share of the drug development costs. The US could do the same thing but then nobody would be paying for it and the world would have less drug R&D. It doesn't matter where the drug companies are headquartered. They all use the money to develop drugs that patients everywhere then benefit from. The ideal solution would be for other countries to pay their fair share of the R&D instead of the US having to pay disproportionately, but in the absence of any way to force them to do that, what should we do? The thing that causes more people to die because there is less funding for drug development? > and that does not need to increase if the number of patients increase. The more patients receive the drug the more valuable its development is and the more incentive you want to provide for that. > If you want to pay that subsidy that's awesome, but when you're lumping it into Medicare it becomes an argument for not extending cover to more people because it artificially inflates the per-patient marginal cost of providing care. The cost isn't artificial, it's amortizing the cost of the system being used to fund drug development over the patients who use those drugs. Maybe that system could be more efficient, but just reducing its funding without changing its overall efficiency is only going to result in less drug development. > Or you can do what pretty much the rest of the developed world does: Publicly subsidise R&D That would be the first option that I listed? But there are disadvantages to that. The patent system is imperfect but it has a different set of incentives than a grant system and consequently results in different kinds of research. It's plausible that we're better off with both than one to the exclusion of the other. In which case we shouldn't be so offended at not slashing the funding source for the one of them. > This willingness to actively defend a system that demonstrably is providing you substandard outcomes at the highest cost in the world is also fairly unique to American conditions. America subsidizes the rest of the world and then the rest of the world criticizes us for it. Are we really being lectured for not being selfish enough? |