I already explained that to him the last time he brought it up.
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Pace Coach Corso, not so fast.
On Tuesday, Sanders and Khanna will unveil a new bill that would direct the secretary of Health and Human Services to authorize generic competition for any name-brand drug whose average domestic cost exceeds the median price in five reference countries: Canada, the U.K., Germany, France and Japan.
Competition? In a market? Why the idea is so novel it just might work.
It’s a strange day when a self-described socialist has more forward looking ideas on how to boost an ossified market’s health than “conservatives”.
There’s nothing strange about socialists having forward-looking ideas. The strange day comes when they pan out well over time.
Why not authorize generic competition for every piece of intellectual property? If I spend a few years developing a business application that I can command $X.XX of licensing and support fees for, why shouldn’t other businesses be able to reap those same rewards for a price that falls within their operating costs?
Surely there couldn’t be any unintended consequences to this. I’m sure R&D will proceed at the same pace it always has. And I would never expect companies to raise those prices in other countries or even stop doing business in them altogether if their margins can’t be met.
Good things always happen when government tells businesses how they need to run their businesses. I look forward to the day when I can enjoy the benefits of loosened intellectual property laws, just like Chinese gamers can.
And I can only dream of driving around in a brand-new Land Wind.
You’re right. Chinese-style competition is surely the way forward! If you can’t invent it, wait for someone else to and then copy it. That’s why we see the ground-breaking innovation taking place in the People’s Republic of China, all thanks to the forward-looking policy of the Chinese Communist Party!
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Predictably, you didn’t read the article. The bill basically says there is a price for the privilege of the (necessary) monopoly - lower prices - or the monopoly gets revoked. It’s a trade-off, one designed to keep the baby (R&D, development) while chucking the bathwater (price gouging-type practices).
And, not all consumer goods are the same. Someone wants to develop and patent some new technology that lets stoners in their mom’s basement play more realistic video games? Go for it, and collect all the patent-protected profits you can. Do the same for a life saving drug? Different story. Prices become moral matters.
Yes I did.
I understood this as well. Do you believe this would be free of unintended consequences? If research slows to a crawl, who will notice anyway? What’s to stop the companies from raising prices in other markets so their desired average price can be met?
Looking to your nose is looking forward. Seeing past it has not been a hallmark of any government price-control schemes.
So does government interference in business, especially when price-control schemes have such an abysmal track record of producing good results over the long term. The price of bread was a moral matter in Venezuela, so they instituted price controls. Look at how that played out.
Of course, they didn’t have Bernie down there to show them how it’s done, so maybe I’m just not forward-thinking enough.
Why would research slow when companies can still get a monopoly and profits on their drug?
How about good old fashioned competition, since other drugs would have an expired patent monopoly window?
Nope, no act or policy is. So?
Non-sequitur, not even a similar issue. This isn’t price control due to scarcity-emergency hyperinflation - it’s an added cost of a government provided monopoly. If a pharmaceutical company gouges beyond a price point, they get subjected to market competition (through generics).
As a business decision, pharm companies aren’t going to forfeit that monopoly, which has too much ROI over too long a period of time. Compare the profits lost from the price “cap” to the profits lost to generics moving in to capture market share and it’ll be a no-brainer.
Of course, Big Pharm would hate this idea - not out of any principled reason, but pure self-interest. But it’s an interesting - and maybe effective? - way to bring some pricing sanity (and morality) into a structured market.
And, to be candid, if all you have is libertarian boilerplate in response, save your breath. This is a messy, real world problem that requires a actual solutions, not bumper sticker slogans.
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Because the incentive to innovate is being artificially lowered by government policy. This is pretty straightforward economics. Innovation will still happen, but there is a reason why the US-based companies and inventors create more pharmaceutical innovation than the five countries in Sander’s benchmark list combined.
Of course, nobody will cry foul if a drug they need doesn’t exist. If my father had his stage IV cancer diagnosis five years before he did, he probably would have only made it a few months instead of over a year. No big deal.
Of course it is. What is it about the pharmaceutical industry that makes you believe it operates under different market principles?
I can give you a long, long list where government price controls have produced terrible consequences. You can call that libertarian boilerplate if you like, but I just call it looking for patterns.
Can you give me an example where price controls like this have produced good outcomes?
You didn’t build that. Someone else made that happen.
Never mind that the government are the ones who put the FDA approval process as the biggest barrier to entry to any market ever. So after placating the government with billions of dollars, now they’re told what they can charge before their IP is stolen from them. Such markets, much freedom.
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No, it isn’t, not in a meaningful way, because there is an “artificial” inducement to innovate beyond what they would in a standard market - I.e., the patent monopoly, which protects and ensures an ROI on otherwise an enormous and costly investment that has a small chance of succeeding.
The situatuons are different, so not comparable, which was my point - but further than that, this is a market that has a government subsidy helping the developers out. It’s not a price control on a garden variety consumer good in the marketplace.
Super duper, but it won’t add much to the debate here because we’re not talking about slapping a price control on a consumer good - we’re talking about taking away a government provided monopoly if the producer price gouges. It’s threatening to use a capitalist tool (market competition) if a producer abuses its government-granted privilege.
In a price control scenario, the price cap causes shortages through disincentives to produce the thing. Here, unlike in a conventional price control scenario, if the producer goes beyond an unfair price point, the incentive kicks in to produce more, as market entrants show up to claim their share and make a bunch of money. So, with this policy, the price “control” triggers more supply, not less.
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One more note on this. The Venezuelan bread example is pretty straightforward. The government price controls set in place made it so it wasn’t worth anyone’s time to do something as simple as make bread and sell it to others, at least not outside the black market. It can just as easily happen with drug innovation, or any other aspect of any other industry. If it isn’t as lucrative, they will just do less of it or, in the extreme example of Venezuelan bakers, stop doing business altogether.
That’s the magic phrase right there.
Subsidies are another topic altogether, and pharmaceuticals not unique in that regard. What, exactly, do you think makes the pharmaceutical industry “so not comparable”? It should be a straightforward question to answer since you seem so sure of it.
Of course we are. Drugs are a consumer good. So is food, gasoline, electricity, clothing, heating oil, housing and everything else we consume.
Government-provided monopoly is a really scary-sounding term for patents. I’m not in favor of indefinite patents, but I’m still not seeing anyone make a good case for feeling the Bern on this particular policy.
Right, so price control.
The market allows entrants to show up today. That’s why you can take Cialis or Viagra if you’re having ED.
When has something like this ever played out? Still looking for an example of these forward-thinking success stories.
Edit: It is pretty straightforward that this can increase the supply of existing drugs. What concerns me is how this will decrease the supply of drugs that don’t exist yet. That’s not an easy thing to measure, and again there is a reason why the US remains an engine of innovation in this and many other industries. You can get rich as hell doing it, and it is a great career path for very talented people to go down.
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And completely irrelevant, as I noted above. The price “cap” here wouldn’t disincentivize market players to produce - it’s the opposite, it would allow and incentive other market players to produce.
Asked and answered - see my above paragraph and the previous post. You’re not reckoning with the fact the the economics are different in this scenario. You see a price cap, stop there, and declare the whole thing a price control in a regular market. It isn’t so, for the reasons explained.
That’s because you won’t take the time to understand the economics. You see “socialist Bernie” and react to the label rather than evaluate the merits of the idea.
It does not by restricting generic competition - that’s the entire point of the patent: deny market entry by competitors. The profits pharm companies with a patent currently enjoy is insulated and protected by a government subsidy. These profits aren’t “natural” to begin with. The restriction on competition makes that work, and we’re ok with that trade-off, expecting that it will produce faster innovation.
This bill threatens pharm companies with a dose of capitalism if they don’t make drugs cheaper, as that capitalism currently isn’t in play due to the government subsidy.
It could, or it could decrease the price if existing ones. Either way, that’s a good development for our health care. But you are exactly right.
It could, but I don’t see it doing that, because a sizeable ROI is still going to be there for a very long time on new drugs.
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I don’t disagree that the FDA process is too prohibitive and costly. Guess who stands in the way of reforming that? The big players in the pharmaceutical industry, at the front of the line.
Where to begin? The FDA isn’t being placard - it’s a necessary process to make sure the market doesn’t get flooded with dangerous products. It needs to be reformed, but the need remains - consumers don’t have the means to so this work themselves, so to correct this informational asymmetry, we have a government agency do it on our behalf.
In this policy, IP isn’t stolen - IP is a government-provided protection, backed by a monopoly. It’s a bestowed privilege, and a good one that makes sense, but it’s a privilege nonetheless that insulates a provider from market forces.
And those who grant such a privilege - us - are entitled to condition that privilege to make sure we get more out of the trade off. That’s what this policy does.
Yawn. Just more libertarian boilerplate. When you’re ready to discuss policy in the real world and not the color-by-numbers banalities you’re programmed to mindlessly repeat as a “defense” to your ideology, I’ll be here.
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How many times must this be explained to you? It is a government run for and by the corporations, not for and by the people.
So the major pharma companies spend more on ads vs. R& D. Whodda thought?
Big Pharma loves this as it helps create a barrier of entry for smaller companies and thusly keeps out competition-what they fear the most.
Your “real world policy” is always more government interference in markets, more regulations and less liberty. Forgive me for not automatically ceding the “government should do more” territory. They screw up everything they touch.
I love how you quote the corporate media, clown.
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No, my real world policy is navigating the existing setup since no one has the ability to snap their fingers and create utopia.
The government here has two choices - revoke the patent protection generally and create a wide open, competitive market (will never happen in the real world, so the libertarian fix is DOA) or find a way to deal with the too-high prices that flow from monopoly pricing power due to the patent. This proposal looks to do the latter via placing more conditions on the privilege of the patent protection.
Maybe there are better ideas than this one, but bottom line is any ideas have to operate by real world constraints. If that inconveniences your fantasy world filled with naive non-solutions, well, too bad.
Government created the issue - government has to mitigate it. But even if this particular proposed solution isn’t any good, it’s far better to actually to discuss that and show why (which no one has done). All you offer is throwing bumper stickers at it and sputtering “gummint bad”.
Oh well.
This is a juvenile lie, but not surprising to read.
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Isn’t that what the 7 year limit on a medical patent does?
I mean, for the life of a successful product, 7 years is pretty short. Not a lot of time to make a profit, so make a big one quickly, right?
What do you think of making it 20 years instead? Less rush to make it profitable and a longer life before it is allowed to be produced generically.
Right now the patent window is 20 years from date of application, which includes the time it takes to get FDA approval (which can take up to a decade) - plus, drugs can qualify for an exclusivity period. Producers can also get certain extensions.
I don’t think lengthening the patent term is the answer - I think we need competition in the market (from generics) sooner rather than later, and when someone has monopoly pricing power, there’s no incentive them to price things lower over time knowing they’ll be able to recoup over a longer period of time. Monopolies are going to maximize every year they have the monopoly. That’s the problem we have now - giving them more time won’t mean lower prices over that time.
The patent regime needs to be reformed across the board - patent abuse is a rampant problem.
But a right now problem are crazy high drug prices, and this proposal appears to be a pretty savvy step - Big Pharm hates competition, so threaten them with it if they engage in price gouging.