[jordanb]

Yep. Probably people who are on drugs that cost very little to make but are being sold for enormous amounts of money.

The medical industry seems to operate a lot like gambling where outsize profits are available from a small percentage of "whales". These whales have the combination of some condition, the treatment of which can be made very expensive, combined with access to the financial resources to pay for the treatment.

[gruez]

>Yep. Probably people who are on drugs that cost very little to make but are being sold for enormous amounts of money.

This entirely ignores the cost of R&D, clinical trials, and most importantly, all the other drugs that didn't make it to market.

[magicalhippo]

Here in Norway we have this deal where oil companies can get refunded a significant fraction of their expenses searching for oil if they didn't make a profit[1].

On the flip side, once they start making a profit, they have to pay a similarly high fraction in taxes.

This is to incentivize searching while also letting the profits benefit the majority.

Had a shower thought if such a model might have worked on the pharmaceutical market as well.

[1]: https://www.nrk.no/klima/xl/leterefusjonen_-disse-selskapene...

[ceejayoz]

The industry spends more on marketing - bombarding daytime TV with “ask your doctor about dksieiddjievan” for example - than R&D.

[gruez]

Source? Apparently such claims are questionable:

https://skeptics.stackexchange.com/questions/16472/do-typica...

[ceejayoz]

That’s largely a quibble over where the line between “sales” and “marketing” is drawn.

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

[gruez]

How does that article add to the discussion in any way? It's just repeating the same infographic that's in the stackexchange post, and is seemingly making the same mistake of rounding off "Selling, marketing, and administrative" in financial reports to "sales and marketing".

[s1artibartfast]

This is true, but marketing is revenue positive and R&D is revenue negative.

[bluefirebrand]

Sure, but are they marked up to "return on investment" prices, or "make all of the executives so enormously wealthy that it's actually disgusting" prices?

My bet is the latter

[gruez]

>Sure, but are they marked up to "return on investment" prices, or "make all of the executives so enormously wealthy that it's actually disgusting" prices?

The healthcare sector's 5 year profit margins is 10.0%. That puts it in the middle of the pack when it comes to the other sectors.

https://insight.factset.com/hs-fs/hubfs/1)Insight/2024/04.20...

[apwell23]

If this was true we could all just invest all our money in healthcare stocks and get very rich ourselves.