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Opening Salvo on the War making Americans Subsidize Big Pharma

By TwoScoopsOfSpaceForce following x   2018 May 11, 2:15pm 1,020 views   35 comments   watch   sfw   quote     share    


Trump said his administration would take aim at the “middlemen” in the drug industry who became “very very rich,” an apparent reference to health insurers and pharmacy benefit managers. He also said the pharmaceutical industry is making an “absolute fortune” at the expense of American taxpayers.

“Everyone involved in the broken system - the drugmakers, insurance companies, distributors, pharmacy benefit managers, and many others — contribute to the problem,” Trump said.

Shares of the major U.S. companies in each of those sectors rose after the speech, with the S&P 500 healthcare sector .SPXHC, a broad gauge of large healthcare stocks, up 1.4 percent.

Trump also placed blame on foreign governments, which negotiate lower drug prices than in the U.S., saying they “extort” unreasonably low prices from U.S. drugmakers.

Trump was speaking as his health deputies released a series of proposals to address high drug costs.

The Department of Health and Human Services released what it called a blueprint titled “American Patients First” with details of its plan. It said the administration’s immediate actions would include allowing commercial plans that administer Medicare Part D prescription drug benefits for seniors more power to negotiate prices with drugmakers.

The U.S. Food and Drug Administration would evaluate requiring drugmakers to include the list prices they set on medicines in their advertising. Drugmakers argue that list prices do not reflect actual cost with discounts and rebates.

Some of the administration’s longer-term priorities include restricting use of rebates, creating incentives for drugmakers to lower list prices in Medicare, and investigating tools to address foreign government practices that it said could be harming innovation and driving up U.S. prices.

https://www.reuters.com/article/us-usa-trump-drugpricing/trump-blasts-drugmakers-middlemen-for-high-us-drug-prices-idUSKBN1IC2C0

Naturally the Media is full of pooh-poohing it all. But a small step in the right direction. I guarantee you President Booker wouldn't even go this far.
1   HEYYOU   ignore (16)   2018 May 11, 2:32pm   ↑ like (0)   ↓ dislike (1)   quote        

So Trump/Republicans have let Americans be ripped off since Jan,2017.
Who's been in charge for that period?
Did they do anything on day one?

Did the Dumbass Democrats force Drug companies to bid for Medicare drug business?
Fuck Democrats & Republican & their voters! Hope their voters can't afford drugs causing them to DIE.
Now that's MAGA!
3   Heraclitusstudent   ignore (1)   2018 May 11, 2:50pm   ↑ like (1)   ↓ dislike (0)   quote        

TwoScoopsOfDragonEnergy says
Trump also placed blame on foreign governments, which negotiate lower drug prices than in the U.S., saying they “extort” unreasonably low prices from U.S. drugmakers.


How do they extort? Drug companies apparently still make a worthy profit overseas, otherwise presumably they wouldn't sell there.

If you remember EpiPen prices, who is extorting who, really?
4   TrumpingTits   ignore (0)   2018 May 11, 4:42pm   ↑ like (0)   ↓ dislike (0)   quote        

Heraclitusstudent says
Drug companies apparently still make a worthy profit overseas, otherwise presumably they wouldn't sell there.


I suggest you bone up on the topic.

WE pay MORE to make up for the government-imposed low prices Canada and the rest of the world force the drug companies to sell at. If we didn't, then those firms could not recoup R & D costs let alone make a profit.

I say it is high time we forbid American drug companies from paying this extortion and let the rest of the world live life w/o American pharmaceuticals. Then we can lower prices for Americans.
5   Strategist   ignore (1)   2018 May 11, 5:25pm   ↑ like (1)   ↓ dislike (0)   quote        

HEYYOU says
So Trump/Republicans have let Americans be ripped off since Jan,2017.
Who's been in charge for that period?
Did they do anything on day one?


It's an 8 year trend. Just ask Marcus.
6   Strategist   ignore (1)   2018 May 11, 5:28pm   ↑ like (3)   ↓ dislike (0)   quote        

Trump is keeping every damn promise he made.
Dear Trump, can you fix the cable/phone companies? They are crooks too.
7   Patrick   ignore (0)   2018 May 11, 5:35pm   ↑ like (3)   ↓ dislike (0)   quote        

No, pharmaceutical companies simply lie about the cost of R&D because it's an important rationalization for screwing the public.

Actual drug development costs are quite low.

http://www.slate.com/articles/business/the_customer/2011/03/the_makebelieve_billion.html
8   rdm   ignore (0)   2018 May 11, 6:20pm   ↑ like (0)   ↓ dislike (0)   quote        

TwoScoopsOfDragonEnergy says
Shares of the major U.S. companies in each of those sectors rose after the speech, with the S&P 500 healthcare sector .SPXHC, a broad gauge of large healthcare stocks, up 1.4 percent.


That kind of tells one who is going to benefit from T's plan,no? I was again disappointed (not surprised) with the man of who was going to help the neglected worker the long suffering American little guy. After promising the He was the only candidate that wasn't in big pharma's pocket and that by negotiating directly with the drug companies he could save 300 billion a year he now goes in a totally different direction. He now thinks he can save money by getting other countries (which is basically the rest of the world) to stop negotiating with the drug companies, good frigin luck with that Mr. Isolationist. Is that a joke, to get the rest of the world to pay these rapists more so we can pay less? Moron/Idiot.

The economic populism has been very disappointing: no infrastructure program (it now cant happen due to the deficits caused by the tax cuts IMO), no removal of carried interest deduction in the tax plan they passed (he promised this), huge tax cuts for corporations, estate tax deduction increased, and now no negotiations with Pharma to lower drug prices. There are some good ideas in his drug plan but they are peanuts, pharma wins. The only thing he has done, that is the least bit populist on the economic front is the tariff thing and we dont know where that is going.
9   rdm   ignore (0)   2018 May 11, 6:37pm   ↑ like (1)   ↓ dislike (0)   quote        

Strategist says
Trump is keeping every damn promise he made.



Really?
https://www.c-span.org/video/?c4579839/trump-drug-prices
10   rando   ignore (0)   2018 May 11, 7:09pm   ↑ like (2)   ↓ dislike (0)   quote        

rdm says
https://www.c-span.org/video/?c4579839/trump-drug-prices


That's actually a great video of Trump.
11   rdm   ignore (0)   2018 May 11, 7:25pm   ↑ like (0)   ↓ dislike (0)   quote        

rando says

That's actually a great video of Trump.


It is a good video, Its partially how he got elected, unfortunately it doesn't reflect the plan announced today. This current plan is a pretty big F.U.to those who supported his economic populist promises, but I doubt they care and I think he knows that.
12   mell   ignore (2)   2018 May 11, 7:50pm   ↑ like (2)   ↓ dislike (0)   quote        

Patrick says
No, pharmaceutical companies simply lie about the cost of R&D because it's an important rationalization for screwing the public.

Actual drug development costs are quite low.

http://www.slate.com/articles/business/the_customer/2011/03/the_makebelieve_billion.html


While I have no problem assuming that they are over-reporting expenses and maximizing profits by any means the number reported in this article is naive, assuming successful trials phase 1-3 with no hiccups and no phase 4 (post-marketing studies). Sure there may be conditions that only need short trials but those drugs cannot be sold for much usually as there is greater competition and most likely already sufficient care out there. Sufficient n for statistical significance in phase 3 is usually around 500, many trials last years. In the toughest fields the care per patient in the trial is easily 100K-200K per year, prob more. That's 50-100MM per year. So phase 3 is likely a couple hundred million, add in phase 1+2 you have half a billion. If there is a post-marketing study, another couple hundred millions. Then 1 out of 4 drugs maybe is eventually successful, probably less. So to bring a successful drug to market and weeding out failures, I totally believe the billion dollar plus mark.

Another fact is that the majority of medical breakthroughs comes from the US because companies stand to make the most profit there. This is really a difficult issue and I definitely think much much more money can be saved fighting low-hanging fruits of medical waste first before trying more than risky price-controls.

Of course one can argue that the development phase is usually financed by stockholders, but development stage small cap pharmas is one of the riskiest (and also most rewarding) fields to invest in, littered with failures. Lastly prescription medication spending is far less than hospital/other care and physician services. Even growth has been stable until the Hep C blockbuster let it go over 10% again, but they do CURE Hep c with one year of treatment. I'd call that a breakthrough - so maybe deserved in this case.

rdm says
That kind of tells one who is going to benefit from T's plan,no? I was again disappointed (not surprised) with the man of who was going to help the neglected worker the long suffering American little guy. After promising the He was the only candidate that wasn't in big pharma's pocket and that by negotiating directly with the drug companies he could save 300 billion a year he now goes in a totally different direction. He now thinks he can save money by getting other countries (which is basically the rest of the world) to stop negotiating with the drug companies, good frigin luck with that Mr. Isolationist. Is that a joke, to get the rest of the world to pay these rapists more so we can pay less? Moron/Idiot.

The economic populism has been very disappointing: no infrastructure program (it now cant happen due to the deficits caused by the tax cuts IMO), no removal of carried interest deduction in the tax plan they passed (he promised this), huge tax cuts for corporations...


Some valid criticism in here, but I assert that Trump is doing better than any of the other presidential options would have.
13   Booger   ignore (1)   2018 May 11, 7:57pm   ↑ like (0)   ↓ dislike (0)   quote        

Which drug companies should I short?

Mylan comes to mind first.
14   mell   ignore (2)   2018 May 11, 8:02pm   ↑ like (0)   ↓ dislike (0)   quote        

Booger says
Which drug companies should I short?

Mylan comes to mind first.


Those who do not embrace generics, but even then it's risky. But Mylan could be a good short.
15   Strategist   ignore (1)   2018 May 11, 8:05pm   ↑ like (0)   ↓ dislike (0)   quote        

rdm says
It is a good video, Its partially how he got elected, unfortunately it doesn't reflect the plan announced today. This current plan is a pretty big F.U.to those who supported his economic populist promises, but I doubt they care and I think he knows that.


Why would anyone have a problem with Trump implementing policies that that lower drug prices? American drug companies screw Americans, while selling the same drug to others at a fraction of the price.
All those corrupt politicians who are in the pockets of drug companies need to be in prison.
16   just_passing_through   ignore (0)   2018 May 11, 8:58pm   ↑ like (1)   ↓ dislike (0)   quote        

Based on my career in biotech I have to say mell is dead right. You really have to be careful what you do to those US companies if you want them here, strong and to continue to innovate. Huge huge overhead.

I almost jumped to high tech just to get out of the industry in the 90s when I figured out the overhead of a SW company was, 'burning a disk', basically. Even less now.

There are a hellava lot of ways to save money in our health care system.

That said, yeah, our drug prices are way friggin high and we DO subsidize the rest of the world. They know it too, there's plenty of people from countries like Sweden that admit it on youtube. Apparently people were flipping out there when Obama got elected and the US media was talking about single payer.

If the US negotiated prices to a level the rest of the world is at and the rest of the world didn't come up a bit VC funding would disappear immediately and most research would stop.
17   rdm   ignore (0)   2018 May 11, 9:25pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says

Why would anyone have a problem with Trump implementing policies that that lower drug prices?


Other than pharma and related companies in the health care industry no one, but judging by the stock market reaction and the overall general weakness of the Trump plan, significantly lower prices are not going to happen. I do hope I am wrong.

No doubt we subsidize the rest of the world because the rest of the world, through their government(s) negotiates with the drug companies for lower prices. But Trump's plan refuses to negotiate, though he promised to do so during the election, so why is that? It works for every other country. His idea is to get other countries to pay more so we get charged less but even if he by some miracle of arm twisting he succeeded in getting other countries to pay more why does that translate into lower prices in the USA (other than window dressing) and not just higher profits for pharma? It is a truly idiotic idea that relies on two nearly impossible scenarios: the first that other countries will charge their people more, directly or through taxes and second that pharma companies will voluntarily reduce the cost of a product on which they base their profitability.
18   just_passing_through   ignore (0)   2018 May 11, 9:29pm   ↑ like (0)   ↓ dislike (0)   quote        

Yeah, hard to say how this works. Maybe we should hit pharma hard and just decide to not continue advancing and all get cheap 'current' stuff.

I'd rather only go after those that clearly price gouge .. and reduce costs in other ways. Like forcing upfront pricing at hospitals / clinics etc., allowing insurance across state lines, yadda yadda first.

But hell, if that's what's in the pipe and my industry shuts down I can find other work. I don't even work on drugs, genetics instead but we when pharma catches a cold we get sick too.
19   Strategist   ignore (1)   2018 May 11, 9:36pm   ↑ like (2)   ↓ dislike (0)   quote        

rdm says
No doubt we subsidize the rest of the world because the rest of the world, through their government(s) negotiates with the drug companies for lower prices. But Trump's plan refuses to negotiate, though he promised to do so during the election, so why is that? It works for every other country. His idea is to get other countries to pay more so we get charged less but even if he by some miracle of arm twisting he succeeded in getting other countries to pay more why does that translate into lower prices in the USA (other than window dressing) and not just higher profits for pharma? It is a truly idiotic idea that relies on two nearly impossible scenarios: the first that other counties will charge their people more, directly or through taxes and second that pharma companies will voluntarily reduce the cost of a product on which they base their profitability.


If we eliminate the useless middlemen as Trump said, increase competition, and allow Americans to buy drugs from anywhere in the world, prices would rapidly equate to what other countries pay.
20   Aphroman   ignore (7)   2018 May 12, 6:14am   ↑ like (1)   ↓ dislike (1)   quote        

WarrenTheApe says
Heraclitusstudent says
Drug companies apparently still make a worthy profit overseas, otherwise presumably they wouldn't sell there.


I suggest you bone up on the topic.

WE pay MORE to make up for the government-imposed low prices Canada and the rest of the world force the drug companies to sell at. If we didn't, then those firms could not recoup R & D costs let alone make a profit.

I say it is high time we forbid American drug companies from paying this extortion and let the rest of the world live life w/o American pharmaceuticals. Then we can lower prices for Americans.


Only in Right Wing la la land could such nonsense be repeated, because with a tiny bit of thinking, anyone would realize this is nonsensical
21   bob2356   ignore (1)   2018 May 12, 6:35am   ↑ like (1)   ↓ dislike (1)   quote        

WarrenTheApe says
I suggest you bone up on the topic.

WE pay MORE to make up for the government-imposed low prices Canada and the rest of the world force the drug companies to sell at. If we didn't, then those firms could not recoup R & D costs let alone make a profit.


It's true because I believe it should be true? I am always impressed with the amount of supporting documentation you provide.
22   bob2356   ignore (1)   2018 May 12, 6:42am   ↑ like (3)   ↓ dislike (0)   quote        

rdm says

Other than pharma and related companies in the health care industry no one, but judging by the stock market reaction and the overall general weakness of the Trump plan, significantly lower prices are not going to happen. I


Trump nibbles around the edges but skips the two big ticket items. Letting medicare directly negotiate and eliminating pharma advertising to consumers. Consumer advertising serves no purpose other than convincing a large number of people to demand the newest and most profitable drugs no matter what the benefit to cost is.
23   bob2356   ignore (1)   2018 May 12, 6:51am   ↑ like (4)   ↓ dislike (0)   quote        

rdm says


No doubt we subsidize the rest of the world because the rest of the world, through their government(s) negotiates with the drug companies for lower prices.


Do you honestly believe drug companies are selling billions of dollars worth of drugs at a loss around the world. They are selling at a reduced profit. The American taxpayer is subsidizing research for the rest of the world since most basic research is taxpayer funded, but drug companies are certainly not sending that money back to the government from their high US profits so it's meaningless. A big chunk of pharma research is spent on tweaking existing drugs to extend patents, not new drugs.
24   Aphroman   ignore (7)   2018 May 12, 7:05am   ↑ like (2)   ↓ dislike (0)   quote        

bob2356 says
rdm says


No doubt we subsidize the rest of the world because the rest of the world, through their government(s) negotiates with the drug companies for lower prices.


Do you honestly believe drug companies are selling billions of dollars worth of drugs at a loss around the world. They are selling at a reduced profit. The American taxpayer is subsidizing research for the rest of the world since most basic research is taxpayer funded, but drug companies are certainly not sending that money back to the government from their high US profits so it's meaningless. A big chunk of pharma research is spent on tweaking existing drugs to extend patents, not new drugs.


How refreshing to see something accurate around here for once. Are you sure you’re in the right place?
25   francis_   ignore (0)   2018 May 12, 7:21am   ↑ like (2)   ↓ dislike (0)   quote        

Either bio/chem is over or this industry has figured out that people are willing to pay just as much for smoke blown up their ass as actual treatments.


“ Eroom’s law indicates the number of new drugs approved per billion US dollars spent on R&D has halved roughly every nine years since 1950 “

https://www.pharmacelera.com/publications/what-is-erooms-law/
26   dr6B   ignore (1)   2018 May 12, 7:42am   ↑ like (1)   ↓ dislike (0)   quote        

TwoScoopsOfDragonEnergy says
Shares of the major U.S. companies in each of those sectors rose after the speech, with the S&P 500 healthcare sector .SPXHC, a broad gauge of large healthcare stocks, up 1.4 percent.

This tells me who will be screwed - hint: not drug companies, but customers/taxpayers. Similar to Obamacare, where insurance companies had free reign to hose taxpayers. No matter who is in power, everything moves in the same direction.
27   Strategist   ignore (1)   2018 May 12, 10:44am   ↑ like (0)   ↓ dislike (0)   quote        

bob2356 says
rdm says


No doubt we subsidize the rest of the world because the rest of the world, through their government(s) negotiates with the drug companies for lower prices.


Do you honestly believe drug companies are selling billions of dollars worth of drugs at a loss around the world. They are selling at a reduced profit. The American taxpayer is subsidizing research for the rest of the world since most basic research is taxpayer funded, but drug companies are certainly not sending that money back to the government from their high US profits so it's meaningless. A big chunk of pharma research is spent on tweaking existing drugs to extend patents, not new drugs.


Yes, we discover and subsidize drugs for the whole planet. I don't mind poor countries not paying as they don't have much money anyway, but the richer countries need to start paying their fair share.
28   just_passing_through   ignore (0)   2018 May 12, 11:04am   ↑ like (0)   ↓ dislike (0)   quote        

bob2356 says
Do you honestly believe drug companies are selling billions of dollars worth of drugs at a loss around the world.


I'm sure nobody thinks that. But as far as investors are concerned in a risk / reward scenario without that pop from Americans the risk is too high. Clear enough?
29   Aphroman   ignore (7)   2018 May 12, 11:16am   ↑ like (0)   ↓ dislike (0)   quote        

It’s important to remember that PPACA aka ORomneyCare, was written and pushed into law by the bigtime Right Wing Heritage Foundation.

Is it any wonder why Republicans made all that noise about repeal and replace for so long, yet when they have absolute power they settle for leaving it all in place, except for removing ‘the mandate’ which anyone who ever wanted to was able to circumvent anyways?

If Trump cared about solving the Opioid crisis or wanted to see Capitalism come to the rescue from this Lemon Socialist Republican hell, the first thing he would have done upon taking office was to install an AG who would restore Law and Order wrt Cannabis Prohibition, and allow Americans to inform themselves and the marketplace to get some competition from that pesky cheap little flowering plant. It took fifteen months in office, and a Liberal Senator from Colorado out Art of the Dealing Trumps bitch ass by blocking all his DoJ appointments for 100 days before Trump made his first mention, and major concession to the Liberals, as he loses another battle in his War on Drugs.
30   dr6B   ignore (1)   2018 May 12, 11:25am   ↑ like (2)   ↓ dislike (0)   quote        

WRT to ObamaRomneycare:
31   zzyzzx   ignore (1)   2018 May 12, 1:32pm   ↑ like (0)   ↓ dislike (0)   quote        

Obligatory:
32   bob2356   ignore (1)   2018 May 12, 1:47pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says
Yes, we discover and subsidize drugs for the whole planet. I don't mind poor countries not paying as they don't have much money anyway, but the richer countries need to start paying their fair share.


They will be paying it to the US treasury I assume since that's who funds most of the drug R&D? Phrama spends twice as much on marketing than R&D. Are other counties responsible to pay for that also?

just_passing_through says
But as far as investors are concerned in a risk / reward scenario without that pop from Americans the risk is too high. Clear enough?


Prove ir. Simple enough.

US pharma has 20-40%+ profit margins year after year. Hell of a pop compared to other major industries that are thrilled to see 5-10%
33   everything   ignore (1)   2018 May 14, 6:49am   ↑ like (0)   ↓ dislike (0)   quote        

Shhh.. Big Pharma owns the FDA. Big Pharma advertises on TV so they own that too. Big Pharma pays scientists for bogus tests and data, they rig allot, why else would we have so many commercials by lawyers suing for the damages, why are opioid pharma now telling doctors to NOT prescribe them now. Big Pharma is the biggest lobbyist group in DC. DC .. is pay to play. U.S. health care system is a sickness based business model, it's more or less.. a conveyor belt, once your on it, they got you. And, the system is very lazy, and won't look for root causes, thus over prescribing broad spectrum antibiotics leading to the U.S. having the largest auto-immune epidemic of any country in the world.

Monoculture, CAFO, GMO, and mass production via chemicals - who knows why we are tops for cancer in the world as well.

Obamacare was just an attempt to do what most other countries in the world do with their health care systems, which is to provide affordable health care to as many people as possible, educate people on healthy lifestyles, and heal with nutrition, etc, - it's a humanitarian common sense thing. The U.S. is the sickest developed nation in the world.
34   bob2356   ignore (1)   2018 May 14, 7:33am   ↑ like (3)   ↓ dislike (0)   quote        

everything says

Obamacare was just an attempt to do what most other countries in the world do with their health care systems, which is to provide affordable health care to as many people as possible, educate people on healthy lifestyles, and heal with nutrition, etc, -


Not is was not, nor even anything close. Obamacare is simply a taxpayer subsidized insurance system. Insurance is a major part of the problem, not a solution.
35   Aphroman   ignore (7)   2018 May 14, 9:14am   ↑ like (0)   ↓ dislike (0)   quote        

They will be paying it to the US treasury I assume since that's who funds most of the drug R&D? Phrama spends twice as much on marketing than R&D. Are other counties responsible to pay for that also?


Other countries are too smart to even allow advertising and commercials for drugs.

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