In the medical device and pharmaceutical industries, this more or less already exists in countries with socialized medicine. It’s not as explicit as my formula, but the price of medications and devices are regulated. Industry needs to demonstrate the actual benefit of a new product over a prior product for the system to pay for it, and the price of the product is then set on the basis of the health economic value it brings.
Some say it stifles innovation, but honestly, it eliminates the bullshit minor changes that are only made to continue justifying high prices and exclusivity.
Anyway, I think the “Exodus of industry” argument is an empty threat the shareholder class makes when they feel threatened. A market is a market, and if they want to continue to sell in it, they have to follow the rules, even when they change.
Those countries do not manufacture or do R&D for most of their pharmaceuticals, right? That’s just externalizing the exploitation so far as I can tell.
It’s important to note that much of the R&D pharma relies on is publicly funded via academic grants in research carried out at universities. It’s not to say that pharma doesn’t also carry out clinical research, which of course does carry a cost, but a lot of the development dollars for a given drug are spent well before they make it into pharma’s hands.
I guess my point is that each of these countries individually does not do the majority of the R&D or production for the medications that they rely on. If we start bundling them together arbitrarily, the % they cover grows, sure. Meanwhile India manufactures >50% of the world’s vaccines, and a substantial amount of other medications. In particular India manufacturers many generics which many populations are heavily reliant on. This, of course, is because they keep their costs lower. An exodus of industry already did occur for this to become the case. And a domestic industry in other capitalist nations cannot be made viable without isolationism that would wreck the economy. My understanding is that most of the pipeline costs do fall on the corporations, and because they can go bankrupt, their continued operations depend on privatizing drug candidates, which is also incompatible in the long-term with a resilient domestic industry.
My larger point is that there is a limit to how much reform can improve a framework - to tackle issues at the fundamental level, the industry really needs detached from a profit motive. Right now the big motivator as I understand it is lifestyle drugs, and that is where significant funding is going because the revenue is similar to a subscription model. The profit motive is not and cannot be an optimal navigator when it comes to public health.
I like the general idea, but iirc in practice things like this tend to cause an exodus of industry and its capital.
However as far as reform goes, I do think you could hash something out on these lines (with extra parameters) which might lead to a net benefit.
In the medical device and pharmaceutical industries, this more or less already exists in countries with socialized medicine. It’s not as explicit as my formula, but the price of medications and devices are regulated. Industry needs to demonstrate the actual benefit of a new product over a prior product for the system to pay for it, and the price of the product is then set on the basis of the health economic value it brings.
Some say it stifles innovation, but honestly, it eliminates the bullshit minor changes that are only made to continue justifying high prices and exclusivity.
Anyway, I think the “Exodus of industry” argument is an empty threat the shareholder class makes when they feel threatened. A market is a market, and if they want to continue to sell in it, they have to follow the rules, even when they change.
Those countries do not manufacture or do R&D for most of their pharmaceuticals, right? That’s just externalizing the exploitation so far as I can tell.
It’s always externalized exploitation because they’re all multinational corporations.
It’s true that many of the big players are based in the US, e.g. Pfizer, J&J, Merck, AbbVie, Abbott, EliLily, etc.
But there are plenty that aren’t:
https://en.wikipedia.org/wiki/List_of_largest_biomedical_companies_by_revenue
It’s important to note that much of the R&D pharma relies on is publicly funded via academic grants in research carried out at universities. It’s not to say that pharma doesn’t also carry out clinical research, which of course does carry a cost, but a lot of the development dollars for a given drug are spent well before they make it into pharma’s hands.
I guess my point is that each of these countries individually does not do the majority of the R&D or production for the medications that they rely on. If we start bundling them together arbitrarily, the % they cover grows, sure. Meanwhile India manufactures >50% of the world’s vaccines, and a substantial amount of other medications. In particular India manufacturers many generics which many populations are heavily reliant on. This, of course, is because they keep their costs lower. An exodus of industry already did occur for this to become the case. And a domestic industry in other capitalist nations cannot be made viable without isolationism that would wreck the economy. My understanding is that most of the pipeline costs do fall on the corporations, and because they can go bankrupt, their continued operations depend on privatizing drug candidates, which is also incompatible in the long-term with a resilient domestic industry.
My larger point is that there is a limit to how much reform can improve a framework - to tackle issues at the fundamental level, the industry really needs detached from a profit motive. Right now the big motivator as I understand it is lifestyle drugs, and that is where significant funding is going because the revenue is similar to a subscription model. The profit motive is not and cannot be an optimal navigator when it comes to public health.