[sudopsuedo]

The 9.2% figure is pharma's direct share of NHE, but drugs are a net-positive externality. Cheap statins can stave off cardiac surgeries, GLP-1 can stave off bariatric surgeries, etc. It's ridiculous to conclude we would only save 9.2% on costs--this is not zero-sum.

No comment on drug pricing and its incentives, the existence of America's prescription drug markets drives the new innovative drugs that the rest of the world picks up for cheap.

[onraglanroad]

> the existence of America's prescription drug markets drives the new innovative drugs that the rest of the world picks up for cheap.

That's the ludicrous propaganda that you've been fed but you really should be intelligent enough to dismiss it.

The world would get along just fine without you overpaying for your drugs. You pay for marketing costs.

[nine_k]

Mostly not marketing (still large), but the R&D costs and clinical trial costs. The latter are in hundreds of millions to billions range for the entire journey from a promising discovery to an FDA-approved medicine.

[dv_dt]

Every time Ive looked into it marketing is more than half of the costs of US pharma companies - and I would suspect even more as don't know if there has much work to unmask even more of that spending via channels that can occur in ways not obviously marked as marketing or at least are really not core to research and manufacturing.

e.g. is all the "discount coupon" pharmacy rigamarole considered marketing or administration.

[mdorazio]

This is not correct. Here's Pfizer's 2025 annual report [1]. Total expenses for the year were $55.1 billion. Advertising expenses were $2.7 billion of that, or just under 5%. R&D expenses were $12.1 billion, or just under 22%. They do have a lot of SG&A, but the large majority of that is not going to marketing.

[1] https://d18rn0p25nwr6d.cloudfront.net/CIK-0000078003/908eb6a...

[dv_dt]

Advertising is only a subset of marketing. From that doc, look at operating costs: SGA was ~$11B and R&D ~$12B - basically 50/50. Pfizer is very international, so is pretty difficult to break out US operating costs and what marketing vs R&D is for just the US. But one can also assume US marketing is higher than any other nation as direct-to-consumer advertising is primarily only allowed in the US.

[LorenPechtel]

No. Marketing is an issue but it's not the main driver.

Everybody else uses price controls to keep prices "reasonable"--the drug companies tolerate this so long as selling to the country exceeds their marginal cost of production. They count on the US market to recoup the $1B R&D costs.

Simply mandate that a drug company can't charge more in the US than they do in any other first world country. Major earthquake in drug costs.

The "discount card" bit is basically a reduction in revenue, it's neither marketing nor administration.

[standardUser]

Right, but the idea that Americans specifically should pay higher prices is beyond propaganda. It's Stockholm Syndrome-level delusion. Big Pharm has thrived for generations on our research universities (for the time being anyway) and had a front row seat to expanding foreign markets under US-led globalization. In return, we get the world's most expensive healthcare system and the privilege of paying too much for meds because our leaders won't cut a deal. All they have to lose is the "hundreds of millions to billions range" in annual lobbying expenditures by Big Pharma.

In a sane world - or literally any other country - that $300-$500 million in annual lobbying would be the literal difference that makes medicine accessible for those who need it. Instead, it goes to expensive lunches.

[thrwaway55]

Why not just research it outside of the US if the problem is the FDA cost

[phyzix5761]

You still need the same FDA approval and process to sell it in the US

[thrwaway55]

Cost cut them. You think the administration won't take a bribe at that point?

[estearum]

Because the problem isn't the FDA cost

The problem is proving your drugs work

It's very hard and expensive to do

[mlmonkey]

Agreed. I mean, where did the COVID mRNA vaccine come from? Which company makes the GLP-1 inhibitors like Ozempic and Mounjaro? Are these American companies?

[phil21]

Mounjaro and the next generation of soon-to-be best in class GLP-1 (Retatrutide) are Ely Lilly based out of the US.

Novo makes Ozempic, and is out of Denmark.

The mRNA stuff is a bit more murky, depends on how you squint. Best assignment there would be a split between the US and Germany I suppose?

[tptacek]

That's an interesting argument --- that massively increased access to pharmaceuticals would have knock-on impacts on other cost areas in the NHE.

I think if we dig into the numbers we're likely to find those effects, even if we maximize them, are marginal, unless we do other structural things to untangle the provider pricing system and do price transparency. Like: you could posit a material impact on CVD costs by making statins more widespread, and that should make a dent somewhere, but I don't know that CVD costs in non-Medicare-insured patients are really that big a line item, and non-Medicare is important here because people already Medicare-qualified generally have all the statins they want already. Meanwhile, providers are still ripping patients (and insurers) faces off for shoulder impingements, stents, and spinal fusions.

It's a super interesting comment. Thanks!