Thought about putting this in Major's excellent thread, but decided this was worth it's own. Please stay on topic ... thx. Rationing health care is the 800 pound gorilla of the health care debate that nobody wants to talk about .... Great article in today's NYT - link: http://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html?pagewanted=1&ref=magazine Excerpts from long article:
One must realize that there is a rationing of heath care already done by the insurance companies. It somehow feels different to most people when the rationing is done by government. Government deciding who gets treated and who does not just feels wrong to most people. Let's assume that government health care does not allow for the kidney cancer medication. The patient dies on January 1. The drug would have given him until July 1. Assume that on May 15, stem cell research unlocked a cure for the cancer. All of a sudden, that 6 months is pretty important.
assume, that we would know if we're that close to a cure, assume that the FDA would have to approve. i think we can safely assume six months would never be that important
Assume further that the cure would have to be tested clinically. Who better to test it on? Of course, I have always found it to be crazy that the FDA would turn to somebody that had a 100% chance of death and deny them access to a cure because they aren't sure it is safe. Certain death vs. possible untoward effects....hmmmmm...
My 1st thought was . . . why the hell does this drug cost 54,000$? Is it made out of some rare rare thing that cannot be found easily? Is the process to make it so incredibly hard that 1 in 50000 batches is good? Is it an attempt to recoup 'research' dollars <-- this one I think is the one that is happening. The problem is simple - You die or you support my profit margin. Health Care is not 'tenable' unless someone is making a profit Pure and simple. In this health care equation the BRASS TAX of it is this. The Priorities are these. BUSINESSES ABILITY TO MAKE PROFIT 1. Insurance Companies 2. Big Pharma 3. Hospitals . . . . Patient care. Make no mistake. They don't give a d*mn about individuals. not the Patients not the doctors not the nurses. simply put. OUR Government on give a ***** about corporations and corporate entities. They are the simple most important entities. If they are not making money and growing . . .. then the Government is really interested in find a way to make that happen. Rocket River ok . . I'm in a bit of a cynical mood today
Drugs cost a lot because they take years to develop. By the time a drug hits the market a company has spent millions over the course of sometimes a decade. then you have the drugs that don't pan out after the research or that aren't approved by the FDA. So the drugs that do make the cut are also making up the costs of the drugs that didn't
Not to mention these companies are only allowed so long before a company will be allowed to sell a generic form of the same drug.
Sounds good. Until you learn about the profit margins... The mighty have fallen a bit...but still, many billions are being reaped for a venture that is supposedly "high-risk"...but curiously proves itself to be consistently profitable. Industry Rank as % of 2007 Revenues 1 Network and Other Communications Equipment 28.8 2 Mining, Crude-Oil Production 23.8 3 Pharmaceuticals 15.8 Couple that with the ridiculous way these companies engorge themselves with their monopoly using TRIPS law. The ridiculous disparity between the production value of essential drugs and their actual price would be ski-high if it were not for the effort of generic drug producers in setting a realistic market price. People are dying to enforce the proprietary rights of certain groups to make themselves immense fortunes...ironically, this is one of the greatest applications of capitalism, free market forces striving to drive down prices for a very direct and tangible benefit. The system is so warped now that it refuses to use one of it's greatest strengths because certain people wish to preserve their ability to make excessive fortunes.
That was a really relevant, salient article there, thanks to the OP This needs to be reiterated. The talking point "Obama will ration your healthcare" is silly. We ALREADY have rationing now. The difference is, right now decisions on life-saving care are made by corporate suits, who will always increase shareholder value by denying the care. Government rationing of healthcare may be bad, but rationing by for-profit corporations is worse.
Northside Storm, even though I know there is more to the story, your bottom graph makes me want to vomit. Health care will be radically reformed wthin the next decade whether it goes down this year or not. If something doesn't happen soon, the American public is going to explode in rage at big pharma and the insurance companies as more and more people are skewered by a dysfunctional system that enriches a few at the expense of the millions. At the moment, there may be too many people who feel good about their current care and don't want any changes, regardless of how others suffer.
As an old person, I want the Pharmaceutical companies to be highly incentivised to keep me from dying.
The Cipla drug cocktail is not a great example because they don't have the rd costs. the patent laws are different in India. they do sell the drug for cheap purposely maybe below cost, and that's great. it is a high risk industry, risk/reward. I'm for universal healthcare but the prescription drug business is a different animal with the invesment costs.
Dammit, don't you realize that the drug companies figure this stuff out for free? The answer appears to them in a dream.
Every major drug company spends significantly more on marketing than they do on research. As an example (the first one I could locate), in 2007 Merck spent $4.9 billion on research and $7.9 billion on marketing (on $24.2 billion total revenue). For the same year, Pfizer spent roughly $6.8 billion on R&D and $14.4 billion on marketing. And did anybody catch the fact that congress is extending patent protection for "biologic" drugs from 7 years to 12 years? I noticed it sort of slipped under the radar last week while people were still obsessed with Michael Jackson.
The patent protection should decrease the per unit cost to consumers because of the extended period of exclusivity. They can recoup the R&D costs over a long time window.
Nice bold on the should. Now, nobody is saying that companies should not profit from their hard work. My own personal stance is that either they stop charging such exorbitant prices (what, 20 times what a generic charges?) or governments should stop providing the industry with such cushy protection like TRIPS, it's that damn simple. If you're going to abuse some of the best patent protection laws in the world by charging unreasonable prices and then spending it on marketing to make entry-level barriers for potential competitors then you don't deserve it, plain and simple.
The only issue I have with this is that the marketing costs likely include the cost of providing test data and promotional materials to doctors. Sadly, without this, most doctors would be unaware of the effectiveness of newer medications and would not know to prescribe them.
Does anyone have this info for a non recession year? Drug company's profitability is usually not that volatile, so I'd be curious how this data looks for say 2006?
