How much proof do you need that Democrats have no idea how economics works or how to run a business?
Presidential candidate Kamala Harris Tweeted this thinking it was a good idea:
As president, I’ll give Congress 100 days to send legislation to my desk to stop Big Pharma from raking in massive profits at the expense of Americans.
If Congress won’t act, I will.
— Kamala Harris (@KamalaHarris) July 21, 2019
Profits drive investment, investment drives R&D. Without profits, companies contract and the first thing to get cut is R&D.
Always.
Massive profits make R&D possible.
So Kamala Harris believes, or is banking on her followers believing (or both), that the government can curtail the profits of the pharmaceutical industry and all that will happen is that fat-cat executives will have to cut back on their cocaine and $1000/hour hooker parties aboard their champagne powered mega-yachts.
What will really happen is that new drug development will drop to zero meaning that eventually, the big pharmaceutical companies will go belly up as their IP goes generic.
The real result of her executive action will be:
- New and better cures for diseases or conditions will go undiscovered.
- Lots of people will lose their jobs.
- The economy will take a massive hit.
- Sick people will suffer.
But at least no fat-cat executives will be making huge profits, and this is something for the envy mongers.
What I can’t figure out is if this destruction of pharmaceutical R&D is a feature or a bug.
What I do know is that whenever I have seen pharmaceutical executives testify before Congress, the one question I want someone to ask, I’ve never seen asked.
“Alright. Tell me, as a member of Congress, what I can do to make it possible for you pharmaceutical companies to make crazy huge profits while at the same time lowering the cost of your drugs to the consumer?”
If the goal is lowering drug costs that should be the focus. Not attacking the profits of the industry. I want high profits for R&D with low drug costs.
I believe it’s possible to have low-cost drugs and high profits for R&D, then again, I don’t hate it when other people make a profit.
And personally, I don’t care how some pharmaceutical CEO sleeps on top of a pile of gold like a dragon’s hoard, if the exchange is that if some woman in my life that I love gets breast cancer, the latest and greatest chemotherapy saves her life with no surgery and minimal side effects.
What is means is that any pharma / biotech research will move to the national laboratory system since only the government would have the resources to fund the research.
While there are, I think, good reasons to have the labs do what they do, and there are things they’re very good at, this seems to me like an exceptionally bad idea. The infrastructure for this type of research isn’t there, the funding models are completely unsuited to it, the effort/reward models are not appropriate … I could go on, but you get the point. It’s a bad fit at best.
I think there should be drug R&D done in national labs. But that should really be focused on diseases like Ebola or Hantavirus, stuff that it is critical we are prepared for a potential outbreak of, but there is no profitability in creating drugs for. Call it a strategic medical research.
I don’t trust a national lab to come up with a better chemo therapy, analgesic, or drug for IBS. Those are what the private sector excels at.
Precisely.
The national labs do – or are supposed to do – research that private industry cannot effectively do. That includes building and running facilities that are too expensive for a single company but are crucial to research, such as X-ray light sources for protein crystallography.
As you point out, diseases like Ebola are in the low probability / high consequence category for national-scale outbreaks, and are naturals for the lab system.
Take her seriously. Take any would-be totalitarian seriously.
While she’s more blunt about it than most, “medicare for all”, in any of its proposed flavors, will have this effect.
When the government runs health care, R&D stops. (What was the last time you heard of a medical innovation out of England?)
Also, “public option” is no different. Biden hasn’t admitted what several others have, namely that “public option” is merely the camel’s nose, the way to sneak in single payer without being obvious about it. A public option will put private insurance out of business, exactly as government student loans ended private loans. The WSJ in an editorial called this “single payer on the installment plan”.
Apart from that, “medicare for all” is slick but dishonest marketing. A more honest description would be “VA for all”. Or perhaps, *shudder* “IHS for all”.
Big profits for(insert evil capitalist here) is another bleat the dems have to further the class warfare they started. We the People know how it works. Their base are a bunch of morons taught WHAT to think not how to think
I don’t think that going out of business or getting rid of R&D is what would happen. Let me explain:
I once worked for a company that provided repair services for the Orlando Airport. When they bid for the contract, the contract stated that we could only mark parts up 5% over cost.
That made it tough to make any money, so the owner set up a second company that we were required to order all of our parts from. That second company consisted of one person- the manager of my employer’s secretary. We would tell that secretary what parts we needed, and she would order them and mark them up by 100%, sometimes more. Then she would sell those parts to the first company, where we would mark them up 5%, as allowed by the contract.
I see something similar happening here, simply because government officials know nothing about business, and are thus likely to leave large loopholes that will be exploited.
Say you outlaw ALL profits from US pharmaceutical companies. Those companies simply open a factory in Canada by offering to sell drugs to Canada’s NHS at cost. Then PharmaCanada sells the drugs to PharmaUS for a HUGE markup. PharmaUS sells the drugs without showing a profit.
All this does is make other countries Pharma sector turn in strong returns, increasing their stock prices. US pharma stock plummets and eventually becomes junk (who wants to buy stock that won’t pay dividends?). The dem president declares a national health emergency and nationalizes US pharma.
In the end, that is the goal: nationalize the health system.
So what you’re saying is that we will end up with the British NHS, or with our IHS, but via a few additional steps I hadn’t thought of.
Socialism is always the politics of envy with disastrous results when the spiteful policies are implemented.
That total biotch will never be Madame President.
A little late to the party but I thought I would add my 2 cents.
I used to work for a large pharmaceutical company. At the time (30+ years ago) the company spent an average of $250 million in R&D for each drug that made it to market. 9 out of 10 drugs did not generate enough profit to pay back the R&D costs. In addition it took about 10 years to get a drug approved and the company had to apply for a patent at the start of the process. Patents are for 17 years so more than half of the patent life expired during the approval process. For the math disabled that is $2.5 billion in R&D to get one profitable drug and that drug had to make back that investment, plus enough of a profit to justify that investment, in 7 years. And that was the cost 30+ years ago.
Part of the reason 9 out of 10 drugs did not make a profit was the company was very ethical and truly interested in helping people. If a researcher found a cure for a rare condition the company would follow through and spend the money to get the drug approved knowing there weren’t enough customers to make a profit. For example, the company made anti-venom for a fairly rare type of snake bite. They made one small batch every 5 years. Even though we were the only company in the world that made that particular anti-venom that small batch was enough to supply the entire world for 5 years. Demand was so small, but so crucial when it was needed, I don’t think they even bothered to charge for the drug.
I had this conversation with my mother, and her response was “I don’t believe that!”
Cool story. Your belief, or lack thereof, has no impact on cash flow and profit/loss.
A large “campaign contribution” from Big Pharma will change her mind.
The Illinois state legislature, one of the most corrupt institutions in America, used to have a tradition (and maybe still does) known as the “fetcher bill.” A member would sponsor some ridiculous bill that would bankrupt a large industry, like (back then) the railroads, and the industry would send lobbyists to drop envelopes on the whole legislature. Then the bill would die in committee.
It looks to me like, as all good traditions do, the fetcher bill lives on.
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