Should the US Subsidize Pharmacy Companies?

[Free Bird]

Big Pharma collectively makes about 712 billion a year, and yet we shell out an average of 270 billion in subsidies from taxpayers. Should we continue to subsidize them? That's like half the deficit right there.

[Taco Truck 🚚]

The entire US medical system is a mess.  There are pharma companies that are over paid and pharma companies that are underpaid.  They are pharma companies that get subsidized too much and some that get subsidized to little (see Zika).  Same goes for doctors, nurses, hospital execs, lawyers, etc.

[🐒Gods of Prosperity🔱🐲💸]

Big Pharma collectively makes about 712 billion a year, and yet we shell out an average of 270 billion in subsidies from taxpayers. Should we continue to subsidize them? That's like half the deficit right there.

I'm guessing most of this is from Medicare, Medicaid, insurance subsidies, etc?

[Sprouts Farmers Market ✘]

Big Pharma collectively makes about 712 billion a year, and yet we shell out an average of 270 billion in subsidies from taxpayers. Should we continue to subsidize them? That's like half the deficit right there.

I'm guessing most of this is from Medicare, Medicaid, insurance subsidies, etc?

I would think so. Unless I saw a detailed list of "subsidies" in question, my gut reaction would be a resounding NO. Even most grant-work seems more than worthwhile - and not necessarily for "Big" Pharma.

[Free Bird]

For those curious, this is my source of that number.

http://usuncut.com/class-war/10-corporate-welfare-programs-that-will-make-your-blood-boil/

We don't SPEND 270b, I should have worded that better, but that's overall the effect so to speak

[True Federalist (진정한 연방 주의자)]

I wasn't aware we subsidized Walgreen's, Rite-Aid or CVS.  That said, ending our paying for the R&D of the pharmaceutical companies while other countries don't is something we need to address and have for a long time.

[dead0man]

very few things (maybe nothing, but I like to make room for exceptions) should be subsidized

[🐒Gods of Prosperity🔱🐲💸]

For those curious, this is my source of that number.

http://usuncut.com/class-war/10-corporate-welfare-programs-that-will-make-your-blood-boil/

We don't SPEND 270b, I should have worded that better, but that's overall the effect so to speak

Okay, sounds like a lot of that is questionable to call "subsidies," but rather are policies that allow drug companies to make billions by driving up prices while benefiting from millions in govt funded research.  But that should be changed, yes, through some form of patent reform.

[Sprouts Farmers Market ✘]

Not shown in this chart, the literally 20,000 drug companies that literally have a drug or two in their pipeline. They may as well be showing the profits of oil companies because that's how related those two statistics are. Geez.

[they don't love you like i love you]

I wasn't aware we subsidized Walgreen's, Rite-Aid or CVS.  That said, ending our paying for the R&D of the pharmaceutical companies while other countries don't is something we need to address and have for a long time.

CVS at least is. I work for a CVS branch that is funded by the government.

And to answer the question, if the R&D isn't subsidized, we'll just end up paying for it some other way. Either through when Medicare/Medicaid pays over a $1000/pill for new drugs because that's the only way the company can possibly make a profit before generics hit the market and undercut it, or in subsidizing insurance companies to do the same thing. This is a sector of the economy where the old mantra of "let the free market take care of it!" simply won't work, unless patent laws are changed drastically, in which case there would be a far bigger threat from the Martin Shkrelis of the world.

[Mr. Reactionary]

very few things should be subsidized

[Associate Justice PiT]

very few things should be subsidized

[Indy Texas]

I wasn't aware we subsidized Walgreen's, Rite-Aid or CVS.  That said, ending our paying for the R&D of the pharmaceutical companies while other countries don't is something we need to address and have for a long time.

CVS at least is. I work for a CVS branch that is funded by the government.

And to answer the question, if the R&D isn't subsidized, we'll just end up paying for it some other way. Either through when Medicare/Medicaid pays over a $1000/pill for new drugs because that's the only way the company can possibly make a profit before generics hit the market and undercut it, or in subsidizing insurance companies to do the same thing. This is a sector of the economy where the old mantra of "let the free market take care of it!" simply won't work, unless patent laws are changed drastically, in which case there would be a far bigger threat from the Martin Shkrelis of the world.

Are you referring to a physical CVS pharmacy location, or to Caremark, the pharmacy benefit management company that CVS owns and that provides PBM to some federal health insurance programs?

CVS is one of the biggest government contractors because it provides PBM to Medicare and the DoD. McKesson is another PBM with a lot of government contracts.

The big problem with pharmaceutical research is that there's been an "innovation plateau" of sorts in recent decades. Most of the "paradigm-shifting" drugs were discovered before any of us were even born and the stuff that came later was largely aimed at accomplishing the same stuff existing drugs already do but with "greater efficacy" (like fewer side effects or the ability to use smaller doses).

If you're a profit-seeking firm, your incentives are different. From a societal perspective, it makes more sense to try to find treatments and cures for conditions that currently have none. But that's really expensive to do and has a long time horizon. If your goal is to make money, you'll try to develop drugs that are similar to existing ones (so that there's not a lot of R&D costs) but different enough that you can patent them and market them as "new." Even that's not enough lately and you see a lot of drug companies developing strategic partnerships so they can share R&D costs with other companies.

[they don't love you like i love you]

I wasn't aware we subsidized Walgreen's, Rite-Aid or CVS.  That said, ending our paying for the R&D of the pharmaceutical companies while other countries don't is something we need to address and have for a long time.

CVS at least is. I work for a CVS branch that is funded by the government.

And to answer the question, if the R&D isn't subsidized, we'll just end up paying for it some other way. Either through when Medicare/Medicaid pays over a $1000/pill for new drugs because that's the only way the company can possibly make a profit before generics hit the market and undercut it, or in subsidizing insurance companies to do the same thing. This is a sector of the economy where the old mantra of "let the free market take care of it!" simply won't work, unless patent laws are changed drastically, in which case there would be a far bigger threat from the Martin Shkrelis of the world.

Are you referring to a physical CVS pharmacy location, or to Caremark, the pharmacy benefit management company that CVS owns and that provides PBM to some federal health insurance programs?

Caremark. More specifically I handle claims and formulary exceptions for some of their Medicare Part D plans.

[Antonio the Sixth]

The pharmaceutical industry should be fully nationalized.

Edit: Looks like Averroes beat me to it. Excellent post.