alt Hacker NewsReminds me of the "US high healthcare costs are subsidising EU cheap healthcare".
The rough argument was: pharma companies need big payoffs when they discover a new drug and, due to structural characteristics of the US market, that's where they can get the highest prices.
So pharmas make a large chunk of their profits in the US and then sell drugs more cheaply in e.g. Europe.
Fairly weak and incomplete argument [1], but I've seen this pushed seriously by people in public debates in the US.
[1] - a couple of obvious issues with this argument are: 1. why is it Europe's fault that the US has structural issues that prevent it from negotiating drug proces as a united front? 2. healthcare costs are largely inflated by admin costs in the US. Drugs can be expensive too, sure, but this argument ignores the big cost intrinsic to the insane insurance and billing system prevalent in the US.
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So, the premise is high drug costs in the US subsidize drug prices in the EU.
Presumably this conclusion was arrived at because pharma companies sell drugs at a higher cost in the US than they do in EU, Canada, or anywhere else. Therefore elevating profits in the US relative to profit margins in other nations. (Note: they reportedly use the profit to develop new drugs, so this is where the subsidization comes into play, as higher profit markets will drive increased revenue and future drug development.)
And your argument against the premise is: 1. The EU is not at fault, and 2. Drugs cost more in the US because of the poor healthcare system.
Argument 1 does not attack the premise: Undoubtedly the EU is not at fault, the EU does not set drug prices in the US. Pharma companies do, within the context of the US economy, of course.
The premise does not assign fault, it’s an assessment of where profit comes from.
Argument 2 is more direct in addressing the premise, but still misses the point: you might be right, mostly right, or you could be wrong. I lean toward agreeing with the point you made (US healthcare system sucks), it doesn’t address the profit differential across different nations.
So, what about the premise is weak and incomplete?
Pharma shareholders want profit, and the US supplies that at a greater rate than the EU (likely due to the regulatory environment). They’ll take a lower profit margin vs. no profit at all, so they operate accordingly.
None of that goes against the premise that the extra profit from the US market is subsidizing the research costs for drug products that enter the EU market.
Pharma companies want to make money - they'll charge what the market can bear up to what they're allowed to. Some countries cap this - others don't. In the US the government actually subsidizes medication costs in a graduated manner that allows the price point to be set much higher than a natural market would allow - there are also tools like manufacturer rebates or drug trial cards that can also subsidize the price if you've got more time than money and are willing to jump through the various hoops.