That's nice. The rest of the world has price caps on what these companies can charge for drugs.
It's one or the other. You can have your ''patents'' and ''intellectual property'' respected...but that requires you not charge an outrageously higher price in certain markets, like the US.
The rest of the world isn't free riding - the USA has just setup a market where there is very little bargaining power for consumers because of how the US medical market and insurance works.
Novo and Eli are still making plenty of money in Europe where these drugs cost a fraction of the price, and where there aren't other significant suppliers for GLP-1's like is being implied.
No, they're free-riding. If drug companies can't charge higher prices in the US, they will do less drug development. Everyone involved in the business/investing side of pharma knows this; it's not even an argument.
I think we have a different definition of free riding.
If you and me both buy the same car, but i'm better at negotiating than you and get a lower price, I'm not free riding because you 'funded the design of the car with the extra money you paid', you are just bad at negotiation.
In this metaphor, the car manufacturer only invested R&D in new models because it expected to be able to recoup that R&D spending from my higher purchase price. If I start paying the same low price for cars as you do, the manufacturer stops investing as much in R&D for new models. Your access to new models was free riding on my higher prices.
When we all negotiate lower prices, we get fewer new drugs. Maybe that's better than the status quo (for Americans). Maybe it isn't.
That's why I pay Apple extra money to develop the next big thing. If I only pay the sticker price of the iPhone, there won't be any more innovative products. But if we all get together and pay double the sticker price, we'll get some true innovation!
Nobody is suggesting paying Novo up front, they footed that bill, we are talking about paying a premium after product lunch, which people certainly did for the iPhone.
In a free-market approach to drug development, if the expected loss of attempting to develop as drug is negative, and the cost isn't too high, then there is an incentive to develop that.
The best public policy outcome in such an approach would be for losses to be only slightly negative. Positive or zero expected losses mean no drug development, and highly negative expected losses mean the drug is more expensive than necessary and reduces the accessibility of the drug.
However, current patent law allows companies to minimise their expected loss, with no controls to prevent highly negative expected losses.
There are alternative models - such as state funding of drug development. This model has benefit that it is possible to optimise more directly for measures like QALY Saved (Quality Adjusted Life Years Saved) - which drug sale revenue is an imperfect proxy for due to some diseases being more prevalent amongst affluent people, and because one-time cures can be high QALY Saved but lower revenue.
The complexity of state funding is it still has the free-rider problem at a international level (some states invest less per capita in funding). This is a problem which can be solved to an extent with treaties, and which doesn't need to be solved perfectly to do a lot of good.
Excessive profits from patented drugs are controlled by development of competing drugs. These competitors arise until profits are driven down to the point further development of competitors is inhibited.
The US has zero credibility w.r.t making international treaties these days. And generally is completely set up for a few peoples maximum “expected negative loss”. Sure things could theoretically be structured differently, but for the foreseeable future they aren’t.
Nah modern mega corps are free riding on all our backs. They use the power of the state and frivolous mechanisms like the broken patent system to create monopolistic situations for themselves.
That would require those same companies from not abusing our political process to obtain illegal political outcomes - outcomes that are unconstitutional - like Citizens United, which led to PHrMA dumping unimaginable money into bad faith political advertising/lobbying.
Until or unless they stop being bad actors, everyone should pirate their stuff. Free Luigi.
No because you literally have no idea what the citizen united ruling was based on what you wrote. Those 99.9% of people use “Citizen United” the way you used it. As a catch all for “corporate political contributions” except it wasn’t that impactful of a ruling regarding that.
If you actually know what it was then answer how does limiting non-electioneering advertisements from PACs for 30 days out of the year changes anything?
What percentage of global rich, obese people live in the US? This is the main market and the product would not exist if it could not command a high profit here. Besides that, I think the US prices are so high due to the insane medical insurance structure, not because the drug companies really make much more than in other countries.
The main reason drug development is so enormously expensive because the FDA makes it that way with their paranoid risk averse regulatory process and insanely restrictive requirements on what requires a doctor prescription.
> because the FDA makes it that way with their paranoid risk averse regulatory process
FDA is constrained by Congress here. Its function (safety and efficacy in advance of marketing) is required by legislation dating to the 60s. Feel free to advocate for Congress to change the law, but it isn't obvious it would be popular with Americans.
> insanely restrictive requirements on what requires a doctor prescription.
I don't think OTC vs Rx rules have much if any impact on drug development expenses.
On a unit cost basis, which is the only thing a customer cares about, it absolutely does. You can cover the development costs at a much lower price point if you can sell more units.
As always, depends on the law. This is a bright line example of companies breaking the law to the direct tangible benefit of not only their customers but the population at large. Letting Novo Nordisk jack the price back up and deprive the vast majority of Americans access to the greatest good to public health in a century meanwhile is… maybe not the example you should be holding as the law working.
Yes, bootleggers can undercut legit competitors, providing a boon for consumers.
In this case, Novo developed the drug. In your view, why does Hims get credit for "the greatest good to public health in a century" and not the company that sank over $10B into developing Ozempic?
Of course, Novo faces competition from Lilly and every other pharma company in the world and continues to lower prices in the face of this competition.
And they provide a valuable service to their customers, I have a very positive association with various drug dealers I've had over the years. Say what you want but they're literally out on the streets serving their local community. For a more HN example, people in the real world are extremely pro piracy and view the people cracking DRM as doing a public good.
I fully expect the state to take action against the, to me, very obvious will of the people who are actively seeking out and purchasing these products. Clearly folks don't respect the legitimacy of IP rights in the same way they respect property rights since nobody blinks when buying compounded GLP but at the same time wouldn't shoplift at their local BestBuy.
So yeah the government's response isn't surprising but you won't see me cheering them on, and I don't think you should either. You literally stand to lose from it.
Novo and Lilly already sell direct to the consumer! Yes, you need a prescription, but once you have one you can buy straight from the manufacturer.