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#26 2005-02-18 3:10 pm
Re: Health care system hits home
zdecker wrote:
obtuse wrote:
Steyr AUG wrote:
Because without revenue they wouldn't be in business, then where would people get their meds.Given the profit margin that most pharma (and other health care products) companies make, a discount wouldn't affect greatly their ability to turn a profit.
Pharma companies have to return a much higher margin. If they did not, investors would not have an incentive to take on the additional risks of being involved in the industry (low barriers to entry for generics, extremely long product pipelines, heavy corporate governance, etc).
Yes, but the expected return on many pharma companies right now is crazy. Taking Pfezier for instance, I'm expecting a 20-30% annual return, and many other pharma companies are at about the same rate. That's really good. Shaving a few points off of that wouldn't kill investor confidence.
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#27 2005-02-18 3:14 pm
Re: Health care system hits home
The New Guy wrote:
obtuse wrote:
I have a hard time criticizing the capitalist motivations of drug companies (at least on this issue. The refusal to allow generic drug production in africa is another story). I think the major problem with drug manufacturers is the direct to consumer advertising, which does work to drive up costs. Virtually everyone who got a prescription for one of the cox 2 inhibitors (vioxx, etc) should have been taking advil instead. There was no additional pain reduction benefit from the fancy drugs over the over the counter drugs. But because people saw the ads and bugged their doctors, they got the fancy drug.
But you would agree that the capitalist motivations of drug companies do not serve to promote research into medications that help small segments of the population.
I'm not sure I would agree with this. Certainly there are companies like Pfizer (the Microsoft of the pharma world) who are not looking to deliver innovate products to small segments of the population.
But if you look past the marketing giants, there are companies such as Wyeth (closer to an Apple of the pharma world) that invests much more heavily into research and targeting specific markets that the big boys don't want any part of. They don't have nearly the market share, and are not mentioned daily on CNBC, but they do OK regardless.
As you mentioned earlier, their products end up costing a bit more since they are having to fund true R&D as opposed to just buying new DDC's from smaller companies.
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#28 2005-02-18 3:24 pm
Re: Health care system hits home
obtuse wrote:
zdecker wrote:
obtuse wrote:
Given the profit margin that most pharma (and other health care products) companies make, a discount wouldn't affect greatly their ability to turn a profit.Pharma companies have to return a much higher margin. If they did not, investors would not have an incentive to take on the additional risks of being involved in the industry (low barriers to entry for generics, extremely long product pipelines, heavy corporate governance, etc).
Yes, but the expected return on many pharma companies right now is crazy. Taking Pfezier for instance, I'm expecting a 20-30% annual return, and many other pharma companies are at about the same rate. That's really good. Shaving a few points off of that wouldn't kill investor confidence.
Sorry, but that's BS.
If I could not get a substantially higher return, I would not invest in a company where one hit from the FDA could kill the stock.
Take Merck for example, the FDA singlehandedly tanked their stock 15% a month ago. --Today it's up more than 10%, again a direct result of the FDA's view on 1 drug.
If I could not make a LOT more money with a pharma company, there is no way I would invest in an industry where a consent decree from the FDA could shut the business down for years, where development plans for a new product goes out to 2040 and costs hundreds of millions to develop.
Shaving off a few points from those returns would indeed kill investor confidence.
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#29 2005-02-18 4:32 pm
- charon
- doesn't make change
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- Registered: 2003-05-06
- Posts: 5321
Re: Health care system hits home
The New Guy wrote:
obtuse wrote:
I have a hard time criticizing the capitalist motivations of drug companies (at least on this issue. The refusal to allow generic drug production in africa is another story). I think the major problem with drug manufacturers is the direct to consumer advertising, which does work to drive up costs. Virtually everyone who got a prescription for one of the cox 2 inhibitors (vioxx, etc) should have been taking advil instead. There was no additional pain reduction benefit from the fancy drugs over the over the counter drugs. But because people saw the ads and bugged their doctors, they got the fancy drug.
But you would agree that the capitalist motivations of drug companies do not serve to promote research into medications that help small segments of the population.
Until you've tried to console a ten-year old who was crying because he didn't want to die, or until you've seen a wonderful, smart, happy kid go from walking to standing to being in a wheelchair full time in under three months and the health insurance company standing by denying funding for a power wheelchair, you can't begin to understand my outrage. That someone, somewhere is profiting from the pain and suffering of my 12-year-old brother-in-law is sickening.
The profit comes from trying to help your brother-in-law. Capitalist motivations and all are the way we deal with an imperfect world of scarce resources and non-altrustic people. I'd rather be served by a company competing against others to serve me than a government that gains almost nothing and loses money when I seek its medical help.
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#30 2005-02-18 4:37 pm
- ShnickyShnack
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Re: Health care system hits home
charon wrote:
The New Guy wrote:
obtuse wrote:
I have a hard time criticizing the capitalist motivations of drug companies (at least on this issue. The refusal to allow generic drug production in africa is another story). I think the major problem with drug manufacturers is the direct to consumer advertising, which does work to drive up costs. Virtually everyone who got a prescription for one of the cox 2 inhibitors (vioxx, etc) should have been taking advil instead. There was no additional pain reduction benefit from the fancy drugs over the over the counter drugs. But because people saw the ads and bugged their doctors, they got the fancy drug.
But you would agree that the capitalist motivations of drug companies do not serve to promote research into medications that help small segments of the population.
Until you've tried to console a ten-year old who was crying because he didn't want to die, or until you've seen a wonderful, smart, happy kid go from walking to standing to being in a wheelchair full time in under three months and the health insurance company standing by denying funding for a power wheelchair, you can't begin to understand my outrage. That someone, somewhere is profiting from the pain and suffering of my 12-year-old brother-in-law is sickening.The profit comes from trying to help your brother-in-law. Capitalist motivations and all are the way we deal with an imperfect world of scarce resources and non-altrustic people. I'd rather be served by a company competing against others to serve me than a government that gains almost nothing and loses money when I seek its medical help.
What if the choice is receiving help from "a government that gains alomost nothing and loses money" or no help at all?
Note: please delete this post.
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#31 2005-02-18 5:21 pm
- The New Guy
- Member

- From: Left of left
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- Posts: 3422
Re: Health care system hits home
charon wrote:
The profit comes from trying to help your brother-in-law. Capitalist motivations and all are the way we deal with an imperfect world of scarce resources and non-altrustic people. I'd rather be served by a company competing against others to serve me than a government that gains almost nothing and loses money when I seek its medical help.
Then why did they *deny* his wheelchair claim until just a few weeks ago? Why are they continuing to *deny* any help for my mother-in-law to buy a van and build a ramp so she can take him places? And why do are CEOs getting paid millions of dollars a year when that money could go to help people like my little brother?
I would rather sickness be treated as a net loss to the economy by having socialized health care than a net gain for the economy under a capitalist system.
Whenever someone gets cancer, the GDP goes up. Is that ethically correct?
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#32 2005-02-18 5:25 pm
- Farmerkev
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Re: Health care system hits home
The New Guy wrote:
charon wrote:
The profit comes from trying to help your brother-in-law. Capitalist motivations and all are the way we deal with an imperfect world of scarce resources and non-altrustic people. I'd rather be served by a company competing against others to serve me than a government that gains almost nothing and loses money when I seek its medical help.
Then why did they *deny* his wheelchair claim until just a few weeks ago? Why are they continuing to *deny* any help for my mother-in-law to buy a van and build a ramp so she can take him places? And why do are CEOs getting paid millions of dollars a year when that money could go to help people like my little brother?
I would rather sickness be treated as a net loss to the economy by having socialized health care than a net gain for the economy under a capitalist system.
Whenever someone gets cancer, the GDP goes up. Is that ethically correct?
Are you talking about insurance companies and drug companies?
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#33 2005-02-18 6:31 pm
- wellfleation
- High on Life

- From: Metheun, Mass.
- Registered: 2001-11-13
- Posts: 8628
Re: Health care system hits home
[MA] Flying_Meat wrote:
i've been looking for 3+ years now, so maybe you don't have a grasp of reality. i'm not intending to insult you steyr. but just think about something other than the "easy" answer.
Answers are easy to those who are in college and aren't yet confronted with real life issues. Get a job... just wait. Reality is a lot different once you get out of school. Good luck with that.
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#34 2005-02-18 6:33 pm
- wellfleation
- High on Life

- From: Metheun, Mass.
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- Posts: 8628
Re: Health care system hits home
BTW, good luck F_M!
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#35 2005-02-18 6:35 pm
- wellfleation
- High on Life

- From: Metheun, Mass.
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Re: Health care system hits home
isaly wrote:
Steyr's hooked up with some kind of gov. health care deal so he can be smug.
So am I but you don't see me being a dick.
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#36 2005-02-21 5:38 pm
- charon
- doesn't make change
- From: DC
- Registered: 2003-05-06
- Posts: 5321
Re: Health care system hits home
ShnickyShnack wrote:
What if the choice is receiving help from "a government that gains alomost nothing and loses money" or no help at all?
You mean, because the person's too poor? Then I'd favor, for example, subsidizing that person's health care expenditures before making the government the actual service provider.
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#37 2005-02-21 5:55 pm
- charon
- doesn't make change
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- Registered: 2003-05-06
- Posts: 5321
Re: Health care system hits home
The New Guy wrote:
charon wrote:
The profit comes from trying to help your brother-in-law. Capitalist motivations and all are the way we deal with an imperfect world of scarce resources and non-altrustic people. I'd rather be served by a company competing against others to serve me than a government that gains almost nothing and loses money when I seek its medical help.
Then why did they *deny* his wheelchair claim until just a few weeks ago? Why are they continuing to *deny* any help for my mother-in-law to buy a van and build a ramp so she can take him places? And why do are CEOs getting paid millions of dollars a year when that money could go to help people like my little brother?
You don't think this will happen where the government is the provider? No system is perfect. But I'd rather have a system where I can punish and avoid a health care provider who does me such a disservice. It's the same principle that generally applies to markets.
The New Guy wrote:
I would rather sickness be treated as a net loss to the economy by having socialized health care than a net gain for the economy under a capitalist system.
Sickness is a net loss under capitalism. The gains that accrue to health providers are more than outweighed by the harm suffered by the person who's ill and everyone who relies on him (e.g., his employer, his family). That's why, under our capitalist system, people have been constantly getting healthier to the point that life spans have about doubled in the past century.
If what you're saying is that you want health care providers not to profit from the sickness of others, then you are basically endorsing a system where providers make no money from improving people's health. That won't work out well.
The New Guy wrote:
Whenever someone gets cancer, the GDP goes up. Is that ethically correct?
First, how do you know that? Buying medical services ups the GDP, but if you're incapacitated then you'll do less work, which lowers the GDP. Second, what exactly would be unethical about this? GDP is just a measurement, and a crude one at that. Third, this would hold true under socialism as well.
Last edited by charon (2005-02-21 5:57 pm)
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#38 2005-02-21 11:20 pm
- Freezer mac
- iPod scroll wheel

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Re: Health care system hits home
The New Guy wrote:
Farmerkev wrote:
I feel for you FM. You might want to talk to your doc or the pharmaceutical company that makes that drug. They might be able to help you out with free or reduced cost.
And what about other people in his boat? The pharm company can't give everyone a discount, because they have to make a profit. And god forbid they lose revenue...
if you make less than 150% of the poverty level, you might be eligible for low cost/free medications through your doctor/clinic/hospital.
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#39 2005-02-22 8:59 am
- The New Guy
- Member

- From: Left of left
- Registered: 2000-10-18
- Posts: 3422
Re: Health care system hits home
Freezer mac wrote:
The New Guy wrote:
Farmerkev wrote:
I feel for you FM. You might want to talk to your doc or the pharmaceutical company that makes that drug. They might be able to help you out with free or reduced cost.
And what about other people in his boat? The pharm company can't give everyone a discount, because they have to make a profit. And god forbid they lose revenue...
if you make less than 150% of the poverty level, you might be eligible for low cost/free medications through your doctor/clinic/hospital.
God help anyone who makes 151% of the poverty level 
I'm moving to smurfing Canada.
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#40 2005-02-22 9:07 am
Re: Health care system hits home
charon wrote:
ShnickyShnack wrote:
What if the choice is receiving help from "a government that gains alomost nothing and loses money" or no help at all?
You mean, because the person's too poor? Then I'd favor, for example, subsidizing that person's health care expenditures before making the government the actual service provider.
No one is proposing making the government the service provider. The most liberal plans involve just having the government take over health insurance, and not health care.
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#41 2005-02-22 9:23 am
- Farmerkev
- Official Dementor
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Re: Health care system hits home
The New Guy wrote:
Freezer mac wrote:
The New Guy wrote:
And what about other people in his boat? The pharm company can't give everyone a discount, because they have to make a profit. And god forbid they lose revenue...if you make less than 150% of the poverty level, you might be eligible for low cost/free medications through your doctor/clinic/hospital.
God help anyone who makes 151% of the poverty level
I'm moving to smurfing Canada.
Don't let the door hit you on the way out.
Do your part to combat global warming.
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#42 2005-02-22 9:35 am
Re: Health care system hits home
more or less wrote:
yep,
i have lost about 5grand to a former "pre-existing" condition. the freemarket makes everything better!
that would be sarcasm.
Damn, you may have to go a few years without a new computer.
that would be sarcasm.
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#43 2005-02-22 9:39 am
- The New Guy
- Member

- From: Left of left
- Registered: 2000-10-18
- Posts: 3422
Re: Health care system hits home
Farmerkev wrote:
Don't let the door hit you on the way out.
Oh! Ouch! That hurt! You're so mean. I totally wasn't expecting that.
</sarcasm> 
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#44 2005-02-22 9:52 am
Re: Health care system hits home
The New Guy wrote:
I'm moving to smurfing Canada.
In all honesty, the Canadian health care bureaucracy may be preferable in many ways to the American health care bureaucracy.
What scares me is that anyone would think health insurance would look anything like it does in the U.S. under anything remotely approaching free market conditions. There's less federal involvement in life insurance, home insurance, and auto insurance. And guess what? They sell insurance for unlikely but expensive events ("catastrophic" coverage), not payment plans for basic maintenance.
Compare it to auto insurance:
What we have with health insurance, including Medicare and Medicaid, are plans that pay the equivalent of 80-90% of your gas, 70% of the cost of oil changes, 60% of your tires, and gradually less and less for bigger and bigger problems. It's backwards insurance. Anti-insurance.
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#45 2005-02-22 11:07 am
- charon
- doesn't make change
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- Posts: 5321
Re: Health care system hits home
obtuse wrote:
charon wrote:
ShnickyShnack wrote:
What if the choice is receiving help from "a government that gains alomost nothing and loses money" or no help at all?
You mean, because the person's too poor? Then I'd favor, for example, subsidizing that person's health care expenditures before making the government the actual service provider.
No one is proposing making the government the service provider. The most liberal plans involve just having the government take over health insurance, and not health care.
I'd say the same thing. Especially considering that given how comprehensive health insurance is (though see freecat's post), controlling the insurance gives the government power to determine who gets provided what health care.
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#46 2005-02-22 11:16 am
Re: Health care system hits home
charon wrote:
obtuse wrote:
charon wrote:
You mean, because the person's too poor? Then I'd favor, for example, subsidizing that person's health care expenditures before making the government the actual service provider.No one is proposing making the government the service provider. The most liberal plans involve just having the government take over health insurance, and not health care.
I'd say the same thing. Especially considering that given how comprehensive health insurance is (though see freecat's post), controlling the insurance gives the government power to determine who gets provided what health care.
It gives the government the ability to determine who gets what health care on the government's bill. One is still free to pay out of pocket or pick up supplemental insurance.
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#47 2005-02-22 1:03 pm
Re: Health care system hits home
charon wrote:
You don't think this will happen where the government is the provider? No system is perfect. But I'd rather have a system where I can punish and avoid a health care provider who does me such a disservice. It's the same principle that generally applies to markets.
When you have a preexisting condition or an insurance company comes up with some reason to deny you, you aren't going to be in a position to "punish" any provider by going to the competition. You will be marked as a bad risk and you'll have to pretty much accept what little you can get.
In this case your economic man model is just so much academic claptrap.
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#48 2005-02-22 2:56 pm
- charon
- doesn't make change
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- Posts: 5321
Re: Health care system hits home
obtuse wrote:
charon wrote:
obtuse wrote:
No one is proposing making the government the service provider. The most liberal plans involve just having the government take over health insurance, and not health care.
I'd say the same thing. Especially considering that given how comprehensive health insurance is (though see freecat's post), controlling the insurance gives the government power to determine who gets provided what health care.
It gives the government the ability to determine who gets what health care on the government's bill. One is still free to pay out of pocket or pick up supplemental insurance.
Perhaps I am missing something, but it seems to me that the simple and preferrable way to determine what the government pays for is not for the government to take over health care insurance, but simply to exercise discretion in how it pays for recipients' medical bills.
Last edited by charon (2005-02-22 3:00 pm)
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#49 2005-02-22 2:59 pm
- charon
- doesn't make change
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- Registered: 2003-05-06
- Posts: 5321
Re: Health care system hits home
isaly wrote:
charon wrote:
You don't think this will happen where the government is the provider? No system is perfect. But I'd rather have a system where I can punish and avoid a health care provider who does me such a disservice. It's the same principle that generally applies to markets.
When you have a preexisting condition or an insurance company comes up with some reason to deny you, you aren't going to be in a position to "punish" any provider by going to the competition. You will be marked as a bad risk and you'll have to pretty much accept what little you can get.
In this case your economic man model is just so much academic claptrap.
This isn't at all a failure of the insurance market qua providing insurance (or even if it is in some sense, it can be dealt with by paying for people's very-high premiums). The problem here is that you want insurance to function as welfare. Having a preexisting condition is quite a legitimate reason not to provide coverage, in my book.
But if you're just talking about insurance companies who lie, I can't see why another company would refuse to cover you simply because another one lied to avoid making a payment that was due. That's just turning away business for no good reason. However imperfect competition is, even in conjunction with legal remedies, it's better than dealing with a legal monopoly.
Last edited by charon (2005-02-22 3:04 pm)
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#50 2005-02-22 3:08 pm
Re: Health care system hits home
Well. . . I think that healthcare is a pretty basic thing to which people should have relatively easy access. I think that at least the basic healthcare of citizens should be a high social priority.
I don't see how, if you're going to say that markets are good at distributing goods and services, that the current healthcare situation is not a failure in at least some respects.
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