Generic version of a drug already on the market, which can suppress and prevent HIV, would still yield 30% profit if the current price was slashed, researchers say
I think many people dramatically overestimate how profitable drug companies are. The average net profit for a brand-name drug manufacturer is actually less than 30% (source). They’re about as profitable as tech companies.
That’s still quite profitable, but I suspect that if you were to limit them to 30% net profits on their most successful blockbuster drugs, their overall net profits (which have to compensate for the R&D that goes into failed drugs) might not even be positive.
Governments do have the option of simply buying the patent from the drug company (no communism necessary) but Americans have rejected socialized medicine for Americans. I don’t expect that they would want to subsidize medicine for poor Africans.
I think access to certain drugs that deeply impact the public health should be capped in the name of national security. Vaccines for AIDS, Flu, COVID-19, H1-N1, HPV, etc. and things like insulin, should be freely available to the public. Let the firms make money off of the thousands of other meds they push.
In that scenario, why would drug companies bother to develop drugs that deeply impart public health? They already prioritize drugs for smaller numbers of rich people rather than drugs for larger numbers of poor people (e.g. antibiotics). If they can’t make a large profit off of developing an AIDS vaccine, they’re going to work on something like weight-loss drugs instead.
Carrot and stick. The carrot is money for R&D plus a guaranteed purchase of their stock at a fixed and profitable markup. The stick is a regulatory hellscape and guaranteed perpetual purgatory for their other meds if they don’t play ball. Keep the gov happy, and the gov keeps you fat and rich. Drag your feet on critical care meds and risk your skinny pills not be sold in the main market for them.
I think many people dramatically overestimate how profitable drug companies are. The average net profit for a brand-name drug manufacturer is actually less than 30% (source). They’re about as profitable as tech companies.
That’s still quite profitable, but I suspect that if you were to limit them to 30% net profits on their most successful blockbuster drugs, their overall net profits (which have to compensate for the R&D that goes into failed drugs) might not even be positive.
Why should drug companies be profitable at all? Seems like the perfect thing to be nationalized and/or even considered a basic necessity.
Governments do have the option of simply buying the patent from the drug company (no communism necessary) but Americans have rejected socialized medicine for Americans. I don’t expect that they would want to subsidize medicine for poor Africans.
I think access to certain drugs that deeply impact the public health should be capped in the name of national security. Vaccines for AIDS, Flu, COVID-19, H1-N1, HPV, etc. and things like insulin, should be freely available to the public. Let the firms make money off of the thousands of other meds they push.
In that scenario, why would drug companies bother to develop drugs that deeply impart public health? They already prioritize drugs for smaller numbers of rich people rather than drugs for larger numbers of poor people (e.g. antibiotics). If they can’t make a large profit off of developing an AIDS vaccine, they’re going to work on something like weight-loss drugs instead.
A lot of that research isn’t done by these companies. Further, their marketing budget is often huge, the research budget is often lower than that.
Carrot and stick. The carrot is money for R&D plus a guaranteed purchase of their stock at a fixed and profitable markup. The stick is a regulatory hellscape and guaranteed perpetual purgatory for their other meds if they don’t play ball. Keep the gov happy, and the gov keeps you fat and rich. Drag your feet on critical care meds and risk your skinny pills not be sold in the main market for them.
you’ve just described every decent public health system in several countries, many of them not really rich, such as brazil.
Yep.
Is this accounting for inflated C-suite salaries/stock?