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Comment by refurb | Hacker News Reader

What is “predatory pricing”? It seems like “predatory” is just a word people attach to things they don’t like.

When pricing a good with inelastic or not very elastic demand (like, say, healthcare or medical products), the threshold for predatory is very low because people can't just choose most of their healthcare needs or replace them with alternatives (arguably some parts can be vastly diminished with better lifestyle choices over the long term, but that's not solving the current and very inelastic demand).

So, margins in the hundreds of percents is definitely predatory. I'd personally argue anything higher than 10-20% is morally bankrupt and I wouldn't be able to sleep at night if I were in the shoes of those responsible. If there is a hell, there's certainly a circle dedicated to people praying on the sick.

At 10-20% profit margin the pharmaceutical industry isn’t viable. The 1 winner in 10 needs to pay for the 9 losers.

And of course there are alternatives. A brand new drug is replacing something older (even if just supportive care).

Plenty of universal healthcare systems choose not to pay for new drugs because “they aren’t worth it”.

> At 10-20% profit margin the pharmaceutical industry isn’t viable. The 1 winner in 10 needs to pay for the 9 losers

10-20% all included, of course, including R&D costs on failure.

> Plenty of universal healthcare systems choose not to pay for new drugs because “they aren’t worth it”.

Source?

Spinraza—an incredibly expensive treatment for a deadly genetic condition in infants—was available to US patients for two and a half years before it was available to treat infants in the English NHS:

https://www.reuters.com/article/idUSKCN1SK2QM/

Many such cases!

There is a difference between something being available later (probably due to regulatory reasons, and with good reason, the FDA sucks at it's job - look at Oxycontin and sunscreens for two egregious examples on the two ends of the spectrum so of course other countries' regulators wouldn't just blindly trust them), and something not being available at all because it's too expensive as was the original claim.
So again, sources for medical devices or medicine not available in single payer healthcare systems because they're too expensive, but available in the US via an insurance?

To expand on this, the FAA also showed itself to be criminally incompetent to the point of sacrificing human lives in service of Boeing. European (and other countries if they wish to, but as a European they're the only ones I can directly advocate for) regulators should stop trusting American regulators, and only pay attention to them to get inspiration and see what to do/what not to do. European regulators are far from perfect, but they're doing a better job and more trustworthy than their underfunded, hated by 1/3 of the country, revolving door corrupt American counterparts.

Spinraza was specifically not covered for years because the English NHS and Biogen could not reach financial terms based on the NHS’ assessment of the value of the drug over other treatments.

Look, if you don’t want to engage with this specific example, there are many more. Cerdelga to treat Gaucher’s disease was approved by the EU in 2015, but the English NHS didn’t agree to pay for it for another two years:

https://pharmatimes.com/news/nice_u-turn_backs_sanofis_gauch...

Canada as well, not approved for coverage until 2017:

https://hpr-rps.hres.ca/reg-content/summary-basis-decision-d...

Again, not being approved for 2 years, for whatever reason, doesn't match the original claim of not being approved at all because it's too expensive.

If you’re a parent of a child suffering from a terrible genetic condition with what is effectively a miracle cure available, does it really matter to you if perhaps, hypothetically, someday—years later—a drug your government already deems safe is made available to you?

Prices aren’t static. Competitors enter the market. Governments are willing to offer more or less. Eventually, generics or biosimilars become available.

It’s 100% accurate that English and Canadian citizens were denied access to these new drugs until they ceased being “too expensive” (at which point they were no longer “new”).

Another good example is the cystic fibrosis drugs like Kalydeco. Game changing therapy that corrects the gene defect and restores near normal lung function.

Available shortly after launch in the US in 2012. Even Medicaid patients (insurance for poor Americans) had access.

The UK didn’t pay for it until 2020. Eight years later.

And in Canada only 6 of 12 provinces/territories pay for it and only for children. If you’re an adult, well, you’re out of luck.

Long term profit margin of pharma is likely in that range.

Look at the profit margins of the successful companies. It’s in the 30-40% range.

That doesn’t include all the money put into startups that fail.

All in, that’s probably the overall return for the average dollar.

Its making the price higher because you know people are dependent on your product, well beyond a reasonable profit. I think 10x the price in other countries hints a bit to predatory pricing.

What is a "reasonable" profit? 10%? 50%? 100%?

What is a "reasonable" profit in an industry where it costs hundreds of millions to develop a product and 95% of the products fail?

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