Politico reports that the Trump Administration believes that foreign countries are not treating the US fairly as they negotiate lower drug prices than the US systems and now there will be an announced “or else”.
President Donald Trump on Friday will unveil a sweeping strategy for lowering drug prices that aims to reshape Medicare, boost competition and pressure foreign governments that the White House believes are “freeloading” off of the U.S. pharmaceutical industry…
Tell me the story as to why increasing the prices paid by OECD countries will lower prices in the US?
For this story to make sense we have to assume that assume that Big Pharma is not composed of profit maximizing sociopaths who will sell their own grandmother to the glue factory and pay access fees to Michael Cohen.
Under that assumption, the C-level is profit satisficing. They set a goal for total profitability and if one division or linked contract chain pulls in more profits, other divisions are allowed to slide and give better deals to their customers and be less profitable than they otherwise would be. An extra $1 in the UK division’s profit margin because NICE recalculated their QALY threshold would mean a $1 in price cuts in the US or other OECD country’s costs according to this story.
Do we think Big Pharma is composed of generally A-Ok folks who look to systemically walk old ladies across the street?
Or do we think that Big Pharma is composed of profit seeking and profit maximizing individuals who will sell their own grandmother to the glue factory, pay Michael Cohen access fees and make the US intellectual property system a Rube Goldberg-esque contraption of landmines, trip wires and quadruple double secret probation pass throughs in order to collect economic rents?
And even if Trump proposes to link US prices to G-7 best prices that won’t raise the prices for the rest of the G-7. The rest of the G-7 gets good pricing from Pharma because they have negotiators who can credibly walk away from the table after only choosing to buy one drug. The state ballot questions to link state drug purchases to the VA systems’ prices are similar so I will steal that analysis:
The basic thrust of the proposition would be to effectively make the VA the rest of the G-7 the proxy price negotiator for a significant chunk of California, Ohio US prescription drug budget….
why does the VA the rest of the G-7 get such good pricing on their drugs?
They have decent size although there are several pharmacy benefit managers with much larger patient pools…
The VA rest of the G-7 gets good drug pricing because they say no.
If the US insisted on a best price match, we would be outsourcing our negotiating leverage to bureaucrats in London, Ottawa, Brussels, Berlin, Paris, Oslo, Rome and Amsterdam. And they would be walking into their conversations with Pharma reps with several hundred million more potential cover lives in their back pocket which means their ability to say no just got a whole lot more valuable. We would expect US prices to fall dramatically for preferred brand drugs while also seeing somewhat lower prices for those same drugs in the G-7.
That would be a good outcome from a price point of view (although there is an argument that the high price US market funds an innovation incentive) but it is not a matter of free loading by the rest of the G-7 which makes us pay more, it would be a matter of the US finally leveraging its huge purchasing power by implicitly authorizing a very credible No in the price negotiation.
I am having a hard time seeing a pricing policy that makes Canada, the UK, the rest of the EU and Japan pay more in order for the US to pay less.
So what is the story here beyond bluster?
sdhays
Well, one day Novartis called up Michael Cohen and asked him what he could get for them for $1.2m…
Thoughtful David
There isn’t one.
I saw something about using tariffs to lower drug prices. How is that supposed to work? I can’t imagine any scenario where tariffs on anything will make drug prices lower in the US.
JPL
Thanks David. That’s what I thought when I saw the copy of the announcement. In fairness the president will say he’ll lower drug prices. That’s all his supporters care about, and the details won’t matter.
JPL
There’s a new article up at the Washington Post
https://www.washingtonpost.com/news/wonk/wp/2018/05/10/what-to-watch-for-in-president-trumps-long-awaited-drug-price-speech/?__twitter_impression=true&utm_term=.9df95e6e9221
hahaha
Amir Khalid
@Thoughtful David:
Maybe securing lower drug prices for American consumers is not the policy goal here. It may be a part of the Trump administration’s overall anti-Obamacare strategy that seeks to keep drug prices high. I reckon the key to understanding much of Trumpish policymaking is learning to think like the most heartless bastard you can imagine.
Nicole
Oh, you know, he’ll take suggestions and then say that privatizing the VA will fix it all.
Jackie
Trump believes that everyone should get less so he can get more. It’s that simple.
japa21
GOP economic policies have no coherent logic which is based in reality. Lowering corporate taxes was supposed to result in massive hiring, pay increases, etc. Remember. Instead most went into stock bybacks and non-economy boosting actions.
Corporate leaders are not there because they are some bleeding heart liberals who have the best interest of you and me foremost in their minds.
ANd remember, when it comes to Trump, any policy he sets forth must be judged in terms of how much he will benefit.
Another Scott
Well done. Thanks!
Yeah, the story is that Donnie is trying to shake-down the drug companies and trading
companiespartners and force them to give him more money. That’s what this is about.Relatedly, often Dean Baker makes the point that the US doesn’t have to have a system that rewards innovation through patents and trademarks and monopoly rents to have invention of new drugs. E.g. Drugs are cheap. Why do we let governments make them expensive?
He makes excellent points – read the whole thing.
We (as a country) have chosen to make the system this way. We can change it.
Cheers,
Scott.
RSA
@Another Scott:
A good read. I actually just looked for material on clinical testing, which is a huge component of cost, I think, and Baker had a plausible answer there, too, with public funding.
DHD
The thing I don’t quite understand about this is that Canada does not have universal prescription drug insurance (except in Québec) and yet our prices are lower than the US anyway. Is it because hospitals (which are publically run here) do the majority of drug purchasing?
So I wonder how much of it is bargaining power of large single payers and how much of it is just more reasonable intellectual property laws.
Redshift
I suspect the story is that Fox talking heads have long ranted about how unfair it is that the rest of the world is freeloading off our high drug prices, and that we’re paying for all the R&D that benefits everyone, so they should be punished somehow.
It’s important to always remember that this “administration” has run from the beginning on the principle that everything on Fox is true. I don’t there’s much more to it than that. And since the Fox-heads have no idea why we pay what we do it how to change it, just that it’s “unfair,” the Trumpers have no idea either.
smintheus
The story is that Trump is abandoning one of his most popular campaign promises, to give Medicare the power to negotiate lower drug prices. The BS about foreign countries being to blame is smoke.
FlipYrWhig
It may also be the case that Donald Trump is an extremely stupid man.
The Pale Scot
40 yrs ago that might have been true, for the last decade, major pharm co. research efforts have been costly and unproductive measured against those costs. Now the pharms strategy is to buy up small research co that have drugs that have made past first set of trials, that is they have proven to not harm the subjects and can now be assessed for effectiveness. That is when the venture capitalists inject a new round of funding and start negotiating with big pharm to sell the research company and make a profit.
Big pharms solution to someone else making a profit was to back off and wait until the research company was running on fumes and buy at distressed prices. The venture capitalists response is to not get involved in pharmaceutical research start ups. So funding for small research companies has dried up
Selling the rope we’ll hang ourselves with yada yada
Add: I might be off in describing the timing, overall this is accurate
“satisficing”, got to fix that Dave, it looks like satisfying
cintibud
Geeze, I tried to add some line breaks to make my comment more readable and now it says I’m in moderation. Help please!
FlipYrWhig
@The Pale Scot: I thought it was an intentional mix of “satisfy” and “suffice.”
PAM Dirac
@Another Scott:
Well maybe. In a lot of ways the setup Baker describes is what I would like to see and, at least in some small ways, have been working to implement in part over the course of my career. (Disclosure: I’m a federal employee working in drug discovery and development and a massive increase in federal spending in the this area would likely be very, very good for me.) I think he glosses over the difficulties in getting from here to there. Not only getting ~$50 billion a year more in government funding, but essentially repealing Bayh-Dole and changing lots of habits and attitudes. That might be appropriate for a short presentation, but dealing with them is obviously essential to getting anywhere near a successful implementation and none of them are easy to deal with. More importantly I think he is incredibly optimistic about the benefits. I have worked my whole career to make data open and I think there are many important benefits to doing so, but 1) benefits are not monumentally big and 2) it is a long, uphill slog to get the scientific community to buy into it. The primary problem with drug discovery is that it is very, very hard to find effective drugs from the stuff that ails us. Roughly 90% of everything that makes it to clinical trials fails. Baker is right that there are lots of incentives to manipulate data, massage data, do whatever it takes to get a compound approved, yet 90% of the time the data is clear enough that failure is accepted. There isn’t the slightest evidence that opening up all the data will change that significantly. I could go on, but for me the bottom line is that this proposal as the barest outline of a long, difficult, uncertain path to a better system.
rp
@FlipYrWhig: Right. It’s from Barry Schwartz, who wrote the Paradox of Choice.
Another Scott
@PAM Dirac: Thanks for your input.
I like Dean a lot, but have had some disagreements with him at times. (I’m just an interested layman.) I still think he makes an overwhelming case that the “Financial Crisis” was actually primarily the story of a giant housing bubble bursting, but DeLong and Krugman don’t see it that way for some reason. I haven’t figured out why they disagree as much as they do on that. I wish they would come up with a clear consensus – I think it’s important for making sure that it doesn’t happen again.
I don’t think he underestimates the difficulty in changing the US drug system. He’s quite aware of the powerful interests that want to keep the drug system the way it is (, and also don’t want “free trade” in lawyers and physicians and surgeons and other highly-paid professions, and [those that don’t understand] that trade deficits have real costs that must be paid “it’s an accounting identity.”, [etc.]).
My take is that he sees his mission as trying to force people to think clearly about the fact that these systems don’t have to be the way they are, and the way they exist today have huge implications for public policy and the pace of progress.
tl;dr – You can’t solve a problem if you don’t understand it. Understanding is the first step, even if solving it is very difficult.
Keep up the good work!
Cheers,
Scott.
gene108
I think, if our NATO “allies” won’t pay their dues, we need to make them pay their fair share any way we can.
hitchhiker
His plan is to talk about drug prices, period. He knows he’ll then get credit for lowering them, even as they rise.
This is related to his plan to talk about repairing the infrastructure even as it continues to decay. It’s also related to his plan to talk about anything that isn’t what a corrupt administration he’s running.
Another Scott
@hitchhiker: Yup. Just like his Twitter feed, these
Nurembergcampaign rallies are for his minions (and the palace press), not for normal people or those who aren’t in his orbit.It’s propaganda. That’s all.
Cheers,
Scott.
navigator
On the campaign trail, using Medicare’s clout to lower drug prices is a no-brainer.
But the GOP wants to end that program, not further validate it, so the promise is a non-starter with the current majority.
And I’m eyes-open to the fact that the issue wasn’t forced in the ACA, so little real hope after a possible Dem takeover, either.
So back to the blame-everyone-else excuse barrel it is.
Barbara
There is no reason why a drug company would voluntarily reduce prices in the U.S. because other countries pay more, just as they are not charging those countries less because we are paying more here. If those countries dropped their vigilance, the prices would move upward.
The reason we pay more is because we choose to pay more, meaning, we don’t use the levers we have to get lower prices. The main lever is walking away. PBMs do walk away from drugs when they can. Their efforts have brought some generic industry players to the brink. The brand name game is much trickier, but for classes where there are a lot of “me too” products, they can have a dramatic impact on pricing. Even abroad, where a country’s health division can’t walk away completely, they can tie the hands of those using the drug more effectively — deciding when it can be provided in a way that reduces the likely volume of utilization. That is also something the U.S. is extremely reluctant to do.
The issue of innovation is separate. All I can say is, it didn’t require high drug prices to spur the incredible innovation that occurred in the first 70 years of the 20th century. There is such lazy group think on the issue, with a huge number of people so heavily vested in getting funding from pharma that it’s really hard to penetrate the concept that big ideas don’t actually require big money. In this case, the involvement of pharma funding is probably stifling as many good ideas as it is rewarding.
Fair Economist
@sdhays:
Yeah, this is the story. Novartis paid Trump to extort higher drug prices from the rest of the world. Also, too, the amount of money backs up the contention that Trump isn’t a billionaire. You can’t motivate a real billionaire like Bezos to do something substantial with $1.2 million. That’s a bribe for a millionaire, not a billionaire.
Litlebritdifrnt
When I lived in the US one 30 day supply of my blood pressure medicine (Valsartin) would cost me $30 one month and $132 the next, no rhyme or reason for the difference, just wild price jumps and price drops for no reason (I didn’t have health insurance). Since I have lived in the UK it is consistently 16 pounds for a 60 day supply. My husband’s prescriptions which used to cost us $300 a month in co-pays are now free because he is over 60. I don’t know how the UK do it, but I thank the FSM that they do.
shrerparick1
@japa21: I disagree. There is a coherent logic: maximizing the return to C-suite executive and major shareholders and owners of corporations by maximizing rent seeking, pricing power, low taxes, and low wages. This has been the policy since Richard Nixon, and Republican Administrations have pursued it relentlessly (The wage labor share of GDP has fallen from 66% of GDP in 1970 to 60% today, with the only temporary reversal occurring in the last 4 years of the Clinton Administration – https://fred.stlouisfed.org/series/LABSHPUSA156NRUG.
I heard an ad on WTOP on the morning commute from the “Americans for Sound Tax Reform” railing against importing drugs from Canada, Europe, etc. with “price controls” and calling for “policies that will make these countries pay their “fair share” for the “development of drugs” and (insert unicorn and underpants gnome icon) this would “lower” U.S. drug prices. So expect to hear echoes about sanctions and special tariffs on foreign countries that don’t raise their drug prices as much as the drug companies like. At a minimum, Trump, Fox, the Republican leadership, and whole right wing infotainment grift will blame foreigners, in particular are freeloading allies like Canada, Japan, and Europe and Obama (who else) for high drug prices, health care costs, and health insurance premiums for the rest of the year. AS IT IS NOT THEIR FAULT, NOTHING EVER IS.
Trump has decided to be very nice to these drug companies, so I wonder how they have been very “nice” to him and the Republican Party in return since Trump is a completely transactional hood.
cintibud
Well I’ll try this again since no one will release my comment in moderation
Hi David,
I might repost this in an open thread later since it’s only tangentially related to this topic and more of a personal experience story. To get to the point I just ordered my first prescription from a Canadian pharmacy, despite the fact that I have decent (but no longer excellent) employer provided insurance. I have discovered firsthand the insane disparity in prices and how generics can be totally ineffective when compared to the brand name. The latter was especially painful when I discovered the brand is 3000% more expensive than the generic.
My new prescription is for the anti-depressant Wellbutrin XL. I have fought depression most of my life and after having no or limited success with tricyclics (I’m old) and SSRI’s (Zoloft, Paxil, Prozac and the like) I found that Wellbutrin was my answer over 20 years ago, allowing me to feel, well, normal. The XL is a time released formulation so that only one pill a day is needed.
There have been some bumps along the way though. About 10 years ago my insurance had me switch to the generic form of WB, Bupropion. It didn’t work for me. I didn’t expect any change but my depression symptoms returned. My MD specified that I was to receive the brand name – “dso[. I found I was normal again after resumption of brand WB. I had to get special permission from the insurance company, had to jump through some hoops, but as I said my employer’s insurance back then was excellent and I was able to get the brand for a $50 copay for 30 days and usually $100 for 90 days. No problem.
No problem until insane premiums forced my employer to switch from self-insurance/boutique plan to a major insurer with a more limited network and significant deductibles. The hoops I had to jump through to get brand WB were much higher, but even so I had a bad case of sticker shock when I saw my copay for a 90 days supply would be $875! Meanwhile, 0 dollar copay for the generic.
I did some google research and found that the FDA had actually recalled the generic Bupropion 300 XL about 8 years ago after years of complaints that it was ineffective. After the recall it came out that the FDA had never actually tested Bupropion 300 xl. Some more research suggested that the problems may have been fixed since then, so I decided I would try the generic again, starting in Jan. However, in late Dec I did one last 90 day refill of brand WB XL 300 just in case.
Fast forward to the present. I had some ups and downs in my mood, but I considered that was likely to some new responsibilities/stress and the crazy swings of the long lingering winter weather. However when I spent what was supposed to be a productive work around the house weekend unable to get out of the chair and just staring at the walls I finally admitted there was a problem. I broke into my emergency supply of WB XL and – the problems went away! Damm. I needed the real stuff.
More research. It seems that while the active ingredient in WB and the generic is the same, the timed release mechanism is proprietary and does not have to be shared with the generic manufactures. Apparently the generic time release mechanism just doesn’t work the same. Next discovery. My copay as I said above would be 875/90 days. I found that was after the insurance paid their negotiated price of $3720! That’s almost $4600. An individual with no insurance would doubtless pay even more. The insurance company price tool says 6300/90 days. Meanwhile the generic costs the insurance 71 bucks with zero copay for me.
Final act (until the GOP screws up things more). The Canadian pharmacy my MD recommended charges 150 bucks for a 90 days’ supply. They charge 125 bucks for the generic. I sent in my Rx and money and am awaiting the delivery.
The end. For now.
shrerparick1
@Barbara: First, the reason drug prices are so high is that because of patents and monopolies drug companies have monopolies on particular drugs and the most innovation and creativity within these corporations is on extending and improving these monopolies beyond the normal 26 years of the original patent. It is rent seeking and marketing (including marketing and pushing usage for untested conditions) where real money is spent, not on R&D.
The alternative means of R&D is the use of prizes and direct research funding by the Government while abolishing patents and copyrights for drugs. https://www.nytimes.com/roomfordebate/2015/09/23/should-the-government-impose-drug-price-controls/end-patent-monopolies-on-drugs. Without the monopoly for instance, the Hepatitis C cure would cost perhaps only $300 instead of $84,000.
Villago Delenda Est
I have the same questions about this proposal as I do for the Donald Malasstration’s Opioid plan: Does it go after the creators of these messes, the greedy parasite shit that are the CEOs?
If not, fuck off Donald.
LaNonna
@Litlebritdifrnt: Similar experience here in Italy, once a chronic condition is diagnosed, the pharmaceuticals are provided at minimal cost per month, what was $350 in NYC 8 years ago is now less than 10 eu per month. You can bet that Italy’s PBM has a handle on all current chronic diagnoses, and good projections every year as our population ages.
TenguPhule
Cough cough.
TenguPhule
@Villago Delenda Est:
Improved.
J R in WV
@FlipYrWhig:
No. Just NO.
How dare you say that about our persident, farely elected by a huge majority because he is so smart!! Without his branes, he would never have been elected to a hugely majority! Take that bake!!!
//s
Barbara
@shrerparick1: Patents are more helpful to the industry only for drugs in classes that have no competitors. For patented drugs that have competition, the patent extension serves mostly to stave off generic competition. They have patents in Europe and India as well as the U.S. Their prices are still lower. Next argument?
J R in WV
@cintibud:
A suggestion… try the non-timed release version and take 3 pills a day, or however many of the generic, to see if that will work OK. If you run into trouble with your CA pharmacy.
A similar story:
Wife takes a medication – has for years. Suddenly, like you, her co-pay went from $50/90 days to $500/90 days – just the co-pay!! That was a real blow to the monthly budget. She mentioned it to her prescribing Dr, who practices at a non-profit clinic. He suggested she see what the price at the non-profit clinic’s pharmacy was.
Their total cash price was $60/30 days, not a co-pay, the cash price, no insurance involved. Someone, almost certainly the insurance company (AARP) was making a hell of a profit on that medication, and keeping all of it. The whole medical industry from pharma, doctors, hospitals, all of it, is a grand theft game. It badly needs to become a non-profit government operated business, because right now we can’t tell which drugs work for what illness, we don’t know how much any procedure will cost from a Tylenol to an MRI or ER visit. It’s all opaque, just trust us, we’re doctors, we would never do anything that would harm you!!!
Which is why all those law firms advertise about failed medical products and procedures, telling us all that “We can protect your rights! You may be eligible for cash payments!!” — because no one in the medical industrial complex would do anything to harm someone.
Yarrow
@cintibud: I don’t know if you’ve checked out GoodRx, but they offer discounts on medications like if you have a pharm plan with insurance. I don’t know if brand name Wellbutrin would be covered but it’s worth a look. You put in your medication and amount and zip code and it comes up with pharmacies near you and prices for what you need. you print it out and take it to the pharmacy with the prescription. Seems to work pretty well.
RSA
@rp:
“Satisfice” is a term invented by Herb Simon in his work on bounded rationality.
cintibud
@J R in WV: @Yarrow: Thanks for the suggestions. Right now It looks like the Canadian Pharm will work for me but you never know how aggressive the USA will be in protecting the profits of big Pharma. I’ll update after some time.
cintibud
@Yarrow: The GoodRx price for the brand is $1284/30 day supply. $3852 for 90 days so that’s a significant discount but still not affordable. The generic is 18 bucks. Too bad it doesn’t work!
RepubAnon
I’ve always heard that US drug prices are higher because, unlike everywhere else, the US doesn’t have government-run price controls. Most governments won’t approve a drug for use unless (1) it works, and (2) is sold for a reasonable price. In the US, the FDA just looks at whether the drug is safe and effective – after that, it’s whatever the market will bear (insurance company reimbursement, etc. then takes over). This can cause issues if a drug that works well, but is very expensive, isn’t on a given country’s approved list due to the price. However, it does keep drug prices down.
Now, if Drooling Donald wants to do something about this, he has a simple solution: let Medicare negotiate drug prices, and implement Medicare for All. Problem solved.
Of course, Drooling Donny’s head just exploded…
jl
Thanks to the degenerate drug and insurance oligarch Mayhew for two great posts on health care today. This analysis is pretty much what came to my mind when I read the initial reports yesterday.
If the rest of the world decides to walk away, they have resources to walk away. Every continent now has production and research capacity and local industries would be eager to ramp up. Examples are Brazil, India, Kenya, Thailand.
Also, interesting to note that as long as US stays dropped out of the TPP in a stupid way, one of China’s main selling points in doing alternative deals is that they will offer better terms to many countries on patents, patent licensing and IP in general and drugs in particular. It is true that I opposed the TPP as it was written when the US still supported it, and critical of the geopolitical trading bloc analysis of why that version of TPP was so important. But Trump doesn’t know what he is doing and can always turn lemonade into rotting lemons. So, I did oppose the US backed version of the TPP, but it could have easily been improved to create an acceptable agreement.
If you are determined to do things in the most ignorant, corrupt, arrogant and stupid way, you can always get to a worst case scenario, and that is called Trump.
jl
@RepubAnon: It depends on what you mean by ‘price controls’. Most countries with good social insurance health care systems now use reference pricing. That is a method of bargaining for drugs that looks around and essentially says ‘Hey look here, you are selling drug X to customer Y for $Z, why can’t I get that price?’ And countries that do that also have some cost-benefit or cost-effectiveness test for including a drug in a national or regional health care benefit design (for example, in a nationalized health care system, putting it into something that corresponds to a national formulary. An analogy can be made between a cost-effectiveness test and a price control, but it is not a simple analogy, and whether it works or not depends on upon the market structure. In the current real world, where drug companies still have power to use price discrimination to suck as much consumer surplus out of their customers as possible (and which is what David is describing in this post) I think the analogy is poor. Cost-effectiveness tests are better interpreted as a bargaining tool to prevent loss of almost all consumer surplus (almost all net benefit) of use of the drug to the drug company.
jl
Also there is a small kernel of truth inside the Trump plan, which is that if price discrimination in the drug market between drug companies and purchasers were eliminated, you would find the lowest prices increasing and highest prices decreasing. But, as David explains in the post, in the current world, a good case can be made that you would see US prices dropping a lot and the lowest sales prices increasing a little or moderately.
I think the Trumpsters and the drug company will exaggerate and distort this kernel of truth to try to sell a policy that will attempt to increased world prices to the US level and massively increase drug company profits.
droog
I’m late to the thread but y’all need to pair today’s news with this guest column from a month and a day ago:
One way to see this is that USA is threatening European companies with pain in US soil so that they roll over and help the US companies get their way abroad. That is, to force the American model on the rest of the world. If it works you will no longer hear how other countries have better healthcare. US Big Pharma is instigating a race to the bottom across all OECD nations.
The EU can mount a defence. The UK is most likely screwed. Mr. Fox is so desperate for a good Brexit achievement that he and his party will likely roll over on behalf of US lobbying interests. In fact, if Brexit goes as bad as I expect and Labout take power shortly after, I don’t hold much faith in Labour holding the line against this lobbying juggernaut. They’ll be better, but they could still grant some unacceptable concessions to the US pharmaceutical forces depending on the local political scene.
jl
@droog: ” USA is threatening ”
Thanks for interesting comment. My only quibble is that ” USA is threatening ” has been the position of the US for a long time on international trade and finance. Before Trump, the the threats were balanced with clever coalition building and cooperation where interests coincided. Corporate ” USA is threatening ” on patents, copyright and IP, and corporate biochem and agricultural interests were one reason the US walked away from a true multilateral global trade system about a decade ago, and since then the US has pursued largely bogus (IMHO) regional trade deals that have hurt workers and poorer people here in the US and abroad, especially in lower income and poor countries. I think corporate domination of US stance on trade deals has been, on balance, bad except for the rich.
Edit: the propaganda that deals like NAFTA have been a boon to poor around the world conveniently leaves out the history of world income distribution before the dominance of regional deals, but during the drastic reduction in tariffs starting in 1960s. Increase in income for poorest poor around the world has slowed, and increase in income for those just above is wildly mixed, some have been helped but others have been hurt badly since end of true global multilateral trading deals about a decade ago.
Trump has just moved the ” USA is threatening ” approach to a level of self-destructive corruption, stupid and clumsy.
EBT
Isn’t all the costly blue sky research done by public schools for way less than the cost of what pharma R&D (which famously rolls all advertising costs in to R&D to look more costly) costs?
jl
@EBT: I think it is honestly hard to tell about research costs. You need a lot more than blue sky research to get a drug that is shown to be safe and effective in a real human patient population. US law and regulations say that drug companies, or whoever is sponsoring and FDA application have to pay for the follow-on clinical research on safety and efficacy in real world patient populations.
As for misleading R&D costs, I think more important than advertising, which is hard to disguise as research, are hidden costs of marketing. A company needs to know a lot about the demand curves of individuals, organizations, countries, medical groups that get the bills for the pills, and the company also needs to have tight control of the supply chain to prevent leakage through resale by companies that specialize in repackaging drugs for resale (which ruins the ability to discriminate between buyers on price). So there are armies of marketing researchers whose costs are lumped in with R&D costs. This is lumped in with post-approval research, and it is fairly easy to do, since it looks like research that should be done that monitors whether unexpected side effects exist in the patient populations that are using the drug. This marketing research also includes finding sneaky ways to convince doctors that a brand name drug is good for marginal cases, or for purposes for which the drug was not approved..
Procopius
@Redshift:
This assumes the “Fox-heads” report in good faith. Do you really want to claim that?