Good (IMO) editorial from David Frum

[derspiess]

Spicy--do you mind if they don't count the expiring Bush tax cuts as a tax increase?

That depends on whether not they're certain to expire.  We may not know that until December 2012.

[garbon]

I thought his key points were that a) you're going to have to raise taxes at some point, and to pretend otherwise is foolish and b) massive austerity measures in the midst of a recession are lunacy, particularly when the US (previous to this fiscal brinkmanship, at least) was still considered a safe bet for investors looking to buy government debt.

Maybe I got it wrong from my skim read, but neither of those seem unreasonable.

I don't see anything unreasonable about those two points. However, I think he was foolish to mention all these different items and details leaving easy (and reasonable) avenue of attacks.

[Zoupa]

Other countries control health care costs by putting price controls on pharmaceuticals.  Then they free ride on the research and development that gets done out of the profits earned on the back of the US consumers who pay (relatively) uncontrolled prices.  Frum buries this and instead talks about unspecified "waste" which sets off the automatic B.S. alarm.

[Jacob]

Other countries control health care costs by putting price controls on pharmaceuticals.  Then they free ride on the research and development that gets done out of the profits earned on the back of the US consumers who pay (relatively) uncontrolled prices.

Really?

I was under the impression that marketing costs are a bigger factor than research when it comes to expenses in bringing pharmaceuticals to the US market.

Not entirely sure, though. In any case, the whole "Americans pay for the research and everyone else free rides" thing is mentioned with frequency in some circles, but I've never seen any sort of numbers to back it up. Do you have anything readily available?

[The Minsky Moment]

I was under the impression that marketing costs are a bigger factor than research when it comes to expenses in bringing pharmaceuticals to the US market.

You can't separate the two.  Marketing costs are a function of having a private, competitive, profit-seeking drugs sector.  A company is only going to spend on marketing if every $1 of spend gives more than $1 of return.  So it is all part of the same cost - if we want to take advantage of private-sector research efforts, then marketing costs are part of the overall resource expenditure that produces those results.

That said, from the EFPIA, it would appear that total pharma R&D spending approaches $100 billion.  US marketing is not that high. 

Not entirely sure, though. In any case, the whole "Americans pay for the research and everyone else free rides" thing is mentioned with frequency in some circles, but I've never seen any sort of numbers to back it up. Do you have anything readily available?

According to EFPIA, 42.3% of total pharma sales takes place in the US; the figure rises to 61% when new medicines are considered.  In addition, these figures, which relate to gross slaes, don't take into account that the higher margins for US sales supply an even greater proportion of the profit used to fund R&D. 

[viper37]

Other countries control health care costs by putting price controls on pharmaceuticals.  Then they free ride on the research and development that gets done out of the profits earned on the back of the US consumers who pay (relatively) uncontrolled prices.  Frum buries this and instead talks about unspecified "waste" which sets off the automatic B.S. alarm.

other countries may subsidize their health care industry and offer generous fiscal incentives for R&D.  They ain't just leeching.

[Warspite]

I thought his key points were that a) you're going to have to raise taxes at some point, and to pretend otherwise is foolish and b) massive austerity measures in the midst of a recession are lunacy, particularly when the US (previous to this fiscal brinkmanship, at least) was still considered a safe bet for investors looking to buy government debt.

Maybe I got it wrong from my skim read, but neither of those seem unreasonable.

I don't see anything unreasonable about those two points. However, I think he was foolish to mention all these different items and details leaving easy (and reasonable) avenue of attacks.

Dude's probably getting paid by the word.

[Sheilbh]

Sadly (in respects to the current situation, obviously not in respects to the moveon crowd), the moveon crowd was actually less successful - could that be because the Dems in general are a less cohesive party, and hence less beholden to their nutjobs? An interesting theory - the Dems tend to not be able to get as much done because they lack that loyalty, but at the same time seem less susceptible to being dragged much further into the extremes than the Republicans.

This has long been my theory.  The Republicans are a movement with a party, the Democrats are a coalition.  That makes Republicans more coherent, more likely to achieve their goals but also more likely to prize purity over pragmatism and more likely to occassionally blood-let.  While I think the Democrats are more likely to compromise, fragment, internally bitch up to the point where they have to wield the knife.  I think the MoveOn crowd want the Democrats to be like the Republicans, but I've always thought people here overstate their influence to a huge degree.

It could happen too. 

[dps]

Sadly (in respects to the current situation, obviously not in respects to the moveon crowd), the moveon crowd was actually less successful - could that be because the Dems in general are a less cohesive party, and hence less beholden to their nutjobs? An interesting theory - the Dems tend to not be able to get as much done because they lack that loyalty, but at the same time seem less susceptible to being dragged much further into the extremes than the Republicans.

This has long been my theory.  The Republicans are a movement with a party, the Democrats are a coalition.  That makes Republicans more coherent, more likely to achieve their goals but also more likely to prize purity over pragmatism and more likely to occassionally blood-let.  While I think the Democrats are more likely to compromise, fragment, internally bitch up to the point where they have to wield the knife. 

I think that there's some truth to that, and I that it largely stems from the fact that the Republican party was the opposition party for almost the entire period from 1933-1981, and still in many ways thinks of itself as the opposition party.

[Malthus]

I was under the impression that marketing costs are a bigger factor than research when it comes to expenses in bringing pharmaceuticals to the US market.

You can't separate the two.  Marketing costs are a function of having a private, competitive, profit-seeking drugs sector.  A company is only going to spend on marketing if every $1 of spend gives more than $1 of return.  So it is all part of the same cost - if we want to take advantage of private-sector research efforts, then marketing costs are part of the overall resource expenditure that produces those results.

That said, from the EFPIA, it would appear that total pharma R&D spending approaches $100 billion.  US marketing is not that high. 

Not entirely sure, though. In any case, the whole "Americans pay for the research and everyone else free rides" thing is mentioned with frequency in some circles, but I've never seen any sort of numbers to back it up. Do you have anything readily available?

According to EFPIA, 42.3% of total pharma sales takes place in the US; the figure rises to 61% when new medicines are considered.  In addition, these figures, which relate to gross slaes, don't take into account that the higher margins for US sales supply an even greater proportion of the profit used to fund R&D.

The problem with the US system is that drug companies are indifferent to whether their dollars are earned from (1) inventing new cures to benefit all of humanity, or (2) evergreening existing patents, advertising directly to consumers, and paying docs in various ways to prescribe their products, through "phase 4" trials and the like.

[Malthus]

The point being that drug research by private companies is perhaps not the most efficient method: for various reasons having to do with the absolutes of life and death, medicine and medical care are not well suited to pure capitalism. Americans are not being well-served by their system, and the fault is not that of other countries.

Take direct-to-consumer advertisement for prescription drugs. What point does it serve? I can think of two, neither of them good: it can get patients to put pressure on docs to prescribe certain drugs - leading to over-medication; or it can get patients to prefer one drug over another for the same condition where either drug would be as good - leading to a pointless consuming of resources beggar-thy-neighbour style.

More to the point, if you are actually ill and really need a drug to survive, what would the market bear? All that you have, of course, since most would rather give up their money than die.

[MadImmortalMan]

the US system

You are being very generous about our organizational skills.

[garbon]

Take direct-to-consumer advertisement for prescription drugs. What point does it serve? I can think of two, neither of them good: it can get patients to put pressure on docs to prescribe certain drugs - leading to over-medication; or it can get patients to prefer one drug over another for the same condition where either drug would be as good - leading to a pointless consuming of resources beggar-thy-neighbour style.

I can think of a positive one - it gets patients involved in their treatment. Hearing about drugs, you can then research them and become an informed consumer. Nothing worse than slavishly following what your MD prescribes. So many cranks and/or overworked docs out there.

Case in point: It really depressed me when I was doing in-person interviews about rheumatoid arthritis in Europe. Many of the patients would talk about wanting specific delivery methods for their medication, that were often available (even for the same drug they were taking) but their physician never told them about the wealth of options.

[garbon]

The problem with the US system is that drug companies are indifferent to whether their dollars are earned from (1) inventing new cures to benefit all of humanity, or (2) evergreening existing patents, advertising directly to consumers, and paying docs in various ways to prescribe their products, through "phase 4" trials and the like.

I've no idea as to the accuracy, but I thought this was interesting: http://www.foundersfund.com/uploads/ff_manifesto.pdf

See page 4.

[Razgovory]

Take direct-to-consumer advertisement for prescription drugs. What point does it serve? I can think of two, neither of them good: it can get patients to put pressure on docs to prescribe certain drugs - leading to over-medication; or it can get patients to prefer one drug over another for the same condition where either drug would be as good - leading to a pointless consuming of resources beggar-thy-neighbour style.

I can think of a positive one - it gets patients involved in their treatment. Hearing about drugs, you can then research them and become an informed consumer. Nothing worse than slavishly following what your MD prescribes. So many cranks and/or overworked docs out there.

Case in point: It really depressed me when I was doing in-person interviews about rheumatoid arthritis in Europe. Many of the patients would talk about wanting specific delivery methods for their medication, that were often available (even for the same drug they were taking) but their physician never told them about the wealth of options.

I could think of things worse.  For instance, self medicating.