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Comment by mft_ | Hacker News Reader

For interest, I had a quick look at a couple of financial statements from three big pharma companies not selling COVID vaccines.

For Q1 2022, pharmaceutical sales only...

AbbVie: 10.345 Bn US vs. 3.19 Bn ex-US [0]

Roche: 5.292 Bn US vs. 5.308 Bn ex-US [1]

BMS: 7.694 Bn US vs. 3.954 Bn ex-US [2]

So US provides at least >= 50% of total revenue, and in some cases considerably more. Also, given the higher prices, it's likely that the US represents a considerably higher proportion of profit than this - and therefore a major change in drug pricing in the US would be hugely disruptive for the industry.

[0] https://investors.abbvie.com/static-files/b37af441-45e9-4e16...

[1] https://www.roche.com/cec228fd-2a55-41e7-a718-19e658c7048d

[2] https://news.bms.com/news/details/2022/Bristol-Myers-Squibb-...

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You're not subsidizing us.

That's the wrong way to look at it.

Your companies are just skinning you alive, because you're letting them.

I think the question is, what would happen if the USA passed similar laws like everyone else and the profits plummeted? How would the pharmacy companies react? If nothing changes, the USA is not subsidizing. If things get worse, they are subsidizing.

Life would go on and companies would adapt after the initial shock.

So MANY of these discussions are pointless when we've had huge changes in the past and 5 years later people can barely remember the past discussions.

Fear of change is huge, the impact of the average change is in general quite small, in the medium to long term.

Question is how would it adapt, which is a fair question to ask and answer

I’m surprised a company doesn’t sell the product for a lower price... Oh, the US prevents this due to patent laws? Then diminish the patent rights... Oh, that would stifle innovation? Hmm, I imagine mandating lower prices might have the same effect.

I think a pretty strong case could be made that the cost of innovation is not worth it. Would it be better to have revolving door of new medicines with 1% better efficacy or all medicines for 10% the price?

Unfortunately, this requires the intellectual honesty for people to admit that profits do in fact Drive Innovation which seems to be a sticking point for most.

It is likely that costs outside of the us would rise somewhat. Hard to say for sure.

No... it is subsidizing. Developing drugs is expensive and high risk... there has to be a monetary mechanism to incentivize drug development and, right now, that is the promise of high profits, which mostly happens in the US. Therefore, US is carrying most of the incentivizing burden for pharma development.

The rate of innovation would slip for global drug development without the promise of high prices and blockbuster profits in the US market.

I have worked for a couple different Pharma companies, including those HQ'ed in Europe, and this is basically the situation. EU based Pharma companies make most of their profit in the US (almost every pharma company does).

There are other ways to incentivize drug development and/or defray the financial risk of development, of course... but this is situation today... has been for a long time.

Set up a straight forward division of labor. Government serves as incubator, funding basic research, early stage trials, angel investor for promising teams.

Govt then auctions rights to productize drugs. Industry pays govt a royalty. Modulate the royalty to incentivize desired outcomes. eg zero (or negative) royalty for malaria, 3000% for esteem remedies like viagra.

Further, when there is no market demand for obvious public health priorities, govt contracts with industry, paying for mfg, distribution, marketing, training, whatever.

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