Impact of banning private pharmaceutical companies?

In an alternative world, the government has decided to ban private pharmaceutical companies that profit off illness. Instead, either government-funded medical research agencies or non-profit entities are used to research and develop new medicines.

What is the general state of health in this alternative world? Does the lack of competition help or hinder the public’s level of health? Does research flourish or diminish? Would scientists be more inclined to focus on long-term cures rather than short-term treatments since the drive for profit is no longer there?

The benefit of producing research with a resulting product would be?

Instead I think the opposite would be…do only what is required to insure that government research funding is continued.

End result, a diminished level of treatment available

What if the government provided bonuses to research teams that made significant breakthroughs? Could that provide additional motivation beyond the minimum to perform for continued funding?

Just who in this alternate world Government is going to be qualified to not only assess program funding, but then also comprehend the significant breakthroughs? Is this alternate world going to be populated by political hacks like we have in this one?

Medicine and pharmaceuticals would be better. The reason is the public sector has an incentive to create blockbuster drugs that manage to cure expensive or orphan illnesses (illnesses that affect a small number of people or that affect poor people overseas). Serious illnesses that can be cured/controlled via medication will save money in public health costs, and improving health overseas will allow foreign economies to grow and create new markets. Plus the public sector can gamble and lose hundreds of millions, while private enterprise cannot take those risks. Also the public sector can do more basic research which may not be profitable immediately but which may come in handy 20 years later.

http://linkinghub.elsevier.com/retrieve/pii/S0168851002001380

Pharmaceutical companies devote much of R&D to creating knockoffs of pre-existing drugs to get around patents. According to Marcia Angell, most of the basic research that goes into true groundbreaking drugs is done by the public sector. The private sector mostly works on tweaking pre-existing drugs to remarket them in new formats.

In this alternate world there probably wouldn’t be a half dozen plus versions of statins, antipsychotics or SSRIs, which would have some drawbacks (the side effect profile varies for each drug so having a dozen different anti-psychotics or statins to pick from has benefits). However we’d probably have more treatments for TB, malaria, tropical diseases and possibly Alzheimers, schizophrenia, etc.

Using cash rewards (like the X-prize) is a good idea. I believe Hillary Clinton ran on creating a public reward system to fund innovation into solving world problems. That would be good because you get more R&D than the cash prize. I think the x-prize for space travel and 100mpg cars created $100 million in R&D to win a $10 million prize.

There was a book written by an MIT professor I glanced at once. He basically claimed it was best to separate pharma industries into 2 parts, the R&D and the marketing. Let the R&D be funded by public sector funds and prizes, and then let the marketing side market those drugs. He felt that was a better way to get blockbuster and meaningful pharmaceuticals to the public.

As it stands the ‘market’ demand it to tweak pre-existing drugs for diseases people in wealthy countries have and repackage them to create new patents. In his world there might be a $20 million prize to a pharma R&D company for coming up with a novel class of chemicals that can fight malaria, and those chemicals would be leased to a pharma marketing company.

All you’ve done is create a roundabout way of awarding some “profit” without actually calling it “profit.”

It seems you already sense this is an issue because you go on to say:

So, you sense that the human race is not altruistic and requires some type of “motivation.” And what shall that motivation be? Money? Young virgins? Golf club memberships? It just seems like you just don’t like the word “profit.” Regardless of what you call the “reward”, you will have to give scientists more than a stipend for them to continue working on hard problems.

It’d be similar to what we have now. Professors and research teams would request grants from public institutes which are staffed by professionals.

There is going to be a motive, but the motive will not be the same. Right now the motive system is set up where the best way to get rich is to tweak pre-existing drugs in such a way that you can keep them on patent, and then to use legal tricks to block generics from hitting the market. If the generics do hit the market, you use slick advertising to convince consumers that a $400/month drug is a blockbuster when in reality it probably barely works better than the $10/month generic. There are tons of commercials for drugs like Cox inhibitors, SSRIs and statins for cholesterol on TV. What they don’t tell you is each of these drugs have generic counterparts that are covered under the $4/month programs places like RiteAid, Walmart, CostCo, etc have.

What would motivate the public sector to create medicines? They could lower public health spending with effective treatments (ulcers do not really require surgery anymore because of medications, anti-psychotics have led to the ability for mentally ill people to live in communities rather than hospitals, advances in treating mental illness or substance abuse would lower law enforcement and public health spending, etc), they would be accountable to voters (who would demand treatments for diseases and would reward the party that funds them the best), they would increase health overseas (which would improve our reputation, national security and economic markets).

As a result there would be more investments into vaccinations, orphan diseases and novel classes of drugs to fight serious illnesses. All in all, we’d be better off with a bigger role in the public sector in medical R&D. The incentives and ‘profits’ of the public sector are more moral, and they have more leeway and resources to obtain them.

I will go to the store to buy an aspirin, and they will be out of it like they run out of H1N1 vaccines.

Ah youth, the errors of ignorance spring eternal.

There’s no particular need for hypotheticals, one needs only look at real world case studies in socialist countries - notably the Soviet bloc and as well in emerging markets.

Of course private pharma is not perfect and some public investment in low-return meds or frontier research is needed, but banning private pharma companies…

You only need to look at our system to see what the effects of a private market are. The public sector does a good deal of the groundbreaking research, then the private sector creates knockoffs and uses legal tools and psychological manipulation to monopolize the market.

The industry likes to portray itself as the engine of innovation, but in fact its major products are me-too drugs—minor variations of drugs already on the market. For example, we have six cholesterol-lowering statins on the market right now; we have five SSRI anti-depressants; we have nine ACE inhibitors to treat high blood pressure. If you look at the top-selling drugs on the market right now, most of them are me-too drugs, and the original of these drugs came on the market back in the ‘80s, or even earlier. The companies have been stringing out variations on the themes ever since. The original drugs were usually based on government university research.-Marcia Angell

Dude, it’s not like you need to ban private pharmaceutical companies to fund public sector medical research.

If the pharma companies are researching expensive ongoing treatments for baldness rather than curing cancer, so what? How does that stop you from raising taxes to pay for public sector researching into cancer?

Also, note that the United States is not the only country in the world. France, Germany, the UK, Japan, Australia, Canada and so on all have extensive public sector health systems. If that worked so well to generate cures for cancer, why aren’t there cures for cancer coming out of Europe every other month?

You don’t need your nonsensical “alternative world” thought experiment, because we already have such an alternative world, namely this world except for the United States.

I still can’t wrap my head around the logic of banning private for-profit medical research. It’s like:

  1. Ban for-profit medicine.
  2. ???
  3. Profit!

And I still can’t see why, before you can offer a $20 million prize for a cure for malaria, you first need to ban pharmaceutical companies.

Thing is, even in the United States, public health is huge. We spend billions on public health. If you want to spend even more on public health, make the argument. But how does banning research into baldness treatments help fund public health?

Believe it or not, that’s what Wesley Clark and his insane ilk believe. Apparently, despite the vast evidence to the contrary, private pharma does absolutely nothing except the tiny, tedious little detail of turning abstract, theoretical research which doesn’t actually treat or cure anyone into actual, workable drugs with known effects which can be created and distributed.

The insane part is that he thinks he’s being rational when he claims that last step is tiny and inconsequential and really, anybody could do (except they can’t, never have, and never did). Frankly, he has no idea what the research companies do: he’s letting his hard-left biases dictate to his good sense.

Why do we have multiple statins? Because heart disease is a huge killer. Each of the statins is a little different, with different side effects and potential long-term impacts on overall health. I LOVE that the pharma companies are duking it out for my business (I am their target market - a well insured guy with really crappy cholesterol readings).

Let Allergan make a mint from Botox - they first used it to help with crossed eyes, and excessive underarm sweating. They then found out it can clean up the wrinkles, and a blockbuster was born. Who cares - Allergan spends money on development, and we all benefit.

Now, perhaps some changes could be made to the patent and approval process to get more drugs out faster, and open the market up a bit more. That, however, is different from deciding to eliminate the private sector.

I don’t support the banning of private research, and you calling me insane is insulting. If you want a discussion, you can have one without insults and straw man arguments.

I support using public funds and a stronger public role in the R&D process of drug development. However the manufacture marketing should be done privately. And I’d still support R&D from private funds for pharmaceuticals. Overall the incentives for R&D from the public sector seem to work better than from the private sector. So I would support more of that.

The OP was about what would happen if we banned private pharma industry. I do think ‘overall’ a system funded totally by public dollars (at least for R&D) would be better than our current system, but a system that was a hybrid with a bigger role for the public sector and non-profits would be better than a totally public and non-profit system.

Something like 40% of medical research is publicly funded. Private industry does do many things right but for pharma R&D (and to an extent marketing) a good deal of it seems to be creating knockoff drugs to avoid patent expirations.

Plus, like I said, if there is no profit motive in curing or fighting a disease companies will not work to cure it. So diseases that affect the other 5/6 of humanity are not that important. Plus private industry runs the risk of only chasing the ‘low hanging fruit’ since research on more complex problems could take decades to solve or never pan out.

The public sector can run losses better and they can put health as a motive above profit. So give them a bigger role in R&D. But no, I do not support banning private industry. However the OP question was ‘would we be better off with a public system’, and overall I think we would. However it wouldn’t be ideal, a public/private hybrid where non-profits and the public sector had a bigger role in R&D would be best.

This alternative world – does it have jetpacks?

What about telepathy, android simulacra, psionic attack weapons, and unicorns?

Or is the only difference the non-existence of a for-profit pharmaceutical industry?

That is well and good, but what they are trying to do is invent a 10th statin (since we already have 9, as well as various supplements like niacin or red yeast rice for cholesterol) so they can charge you $300/month when you could buy a different statin for $4/month if you get a generic. The side effect profiles vary a bit, I’ll give you that but the market is not perfect. And delivering good health at a low cost and making money are not the same in this situation. Plus most people are not well insured. Not only in the US, but globally. So medicine is being co-opted to make money and rather than curing important disease, they are finding people who have the most income and targeting them. So the incentives should be changed.

How many treatments for baldness do we have now? How many treatments for river blindness? Bald people who care about baldness are generally wealthier than people who get river blindness. This is a problem for medical R&D.

On another note, to clarity, I don’t support banning the private sector. I probably should’ve clarified that earlier. I just meant that if R&D were 100% public, we’d be better off than if it were the current system. However I don’t think R&D should be 100% public either, an ideal system (to me) would be one with a far bigger role for the public sector but still freedom for private industry to do research and marketing.

But how many cheap generic drugs are coming out of the European public health system?

What critics of the US Pharmaceutical industry can’t seem to remember is that the rest of the world already operates according to their ideal, and yet somehow the UK and France and Germany and Japan don’t seem to be flooding the world with cheap cures for cancer.

Of course the US pharmaceutical industry isn’t a charity, and of course they don’t focus on providing the most health for the lowest cost. That’s the job of the public health system. And of course, we already have a massive public health system here in the US, with massive publicly funded research. We already spend about as much public money as most European countries do–it’s just that we also have the massive private health care system on top of that.

Now, it sure is true that although we spend twice as much we don’t get twice the benefit. But we already do all the things that critics of the Pharmaceutical industry wish we would do. We already have the CDC, the NIH, and a giant alphabet soup of other federal and state public health organizations, all paid for by taxpayers. Those orgs won’t magically double in size by liquidating Pfizer, the only way they double in size is if we raise taxes to pay for them.

It’s like wondering if we could have better public health funding by banning cell phones. Sure, if we took all the money currently spent on cell phones and gave it to the NIH, we’d have better NIH funding. Except we don’t have to ban cell phones to give more money to the NIH. We can just give more money to the NIH, if it’s such a good idea to give them more money.

Note that Germany and the UK don’t seem to spend tremendous amounts of money on basic medical research compared to the US. So if we switched to a system of full public health care, don’t expect to see a bonanza of new medical treatments. Expect to see what you see in Europe–decent health care for everyone for less than we pay here in the US for decent health care for some.

River blindness IS helped by private pharma:

and of course, the new development:

http://www.tropika.net/svc/news/20090702/Chinnock-200900702-News-moxidectin

So we have two different pharma companies helping with river blindness. There is nothing stopping governments from around the world pumping cash into R&D for diseases that have little payoff - in fact I would argue that is an excellent use of public money.

However, I am quite happy that the research into statins continues, since they keep on finding problems with long term usage of statins. I hope they keep on tweaking the formula, so that I can someday safely take them without worrying about the impact on my liver / kidney functions.