I don't want to sound dramatic but he is quite literally playing chickens with peoples lives. This is not mentally sound behavior, nor strategically coherent.
How is this riskier or less “mentally sound” than what European countries do? European drug price caps are premised on the threat that, if drug companies don’t sell at those prices, that the government will bar sales of the drug in the country, or drop the drug from coverage under the public health system.
Here, there is no threat that the drugs will be banned from the market completely. The threat is that the drug companies will face high tariffs that reduce sales. That’s a much less extreme threat than what the European countries use as leverage.
> Negotiation with the government is also done in Australia. The drug is not banned here though if there's no agreement. It's just not publicly funded.
A tariff isn't a ban either. Imposing a tariff and eliminating a subsidy are both just ways of reducing a foreign drug maker's sales in a local market by making the product more expensive.
Fundamentally, neither Australia nor the U.S. can force companies located in Switzerland or Denmark to sell them drugs at a particular rate. The only leverage they have is hurting drug maker's sales by reducing the demand in the local market.
> You understand the US is the most expensive place in the world for medicine right... If you don't change your strategy this won't change.
The executive negotiating with drug manufacturers is a dramatic change in strategy from what the U.S. has done before.
The status quo is massive scamming by pharma companies to U.S. consumers exclusively, while the rest of the world gets a better deal on pharmaceuticals.
By saying the admin should not use all available leverage points and levers to force them to lower prices, you're arguing for continued pharma profiteering, aren't you?
By the way, the Biden admin did exactly this through a lever contained within the Inflation Reduction Act for Ozempic, among others. [1]
PBMs do indeed pile-on and profiteer, however manufacturers are fleecing U.S. consumers specifically and exclusively.
Profits in the U.S. for drug manufacturers on a per-drug level are significantly higher than in other countries.
By saying the admin should leave the innocent manufacturers alone, you're papering over this fact. Numerous experts on this issue have suggested the government needs to negotiate with pharma companies directly. Now the admin is doing just that you're saying those companies should not be negotiated with and they're innocent of all profiteering, a suggestion not sustained by the facts.
I believe you are correct that the list pricing from manufacturers is higher in the US.
But my understanding is that this is due to the PBMs punishing manufacturers for lowering the list price. Lower list price means less profit for the PBMs for the discount they negotiate
Free markets don't exist when the political system is engineered for regulatory capture. Look at corporate political spending over the last 30 years. We don't have free markets.
"The importance of the move may be largely symbolic at this point, as it does not apply to generic medicines - the most commonly used medicines in the US."
Patents give you monopoly pricing power and patented drugs have huge gross profit margins. Given that, while part of the price increase will be passed on to consumers sellers will also cut prices.
To put it simply if they could charge higher prices without losing volume they already would because no one else can produce that drug so there is no competition to keep prices down.
Which is why they are already charge the price that maximises their profits. If they charged more the increased profit per unit would be more than offset by lower sales.
A good diagram of supply and demand with monopoly pricing power us the easiest way to explain this. I cannot find a good one online that shows the effect of tariffs though. In essence its worth losing some profit per unit to avoid losing too many sales.
Hope this helps ya. [This doesn't require captcha and I am the creator of HtmlPipe, I have written about it and how it works technically as well, Please feel free to ask me any questions about it if you might have :) ]
[Edit: Just want to give introduction to what HtmlPipe is, its essentially a static web-page which can allow to archive archive.is pages on wayback machine/archive.org, I had actually gotten this idea within hackernews discussions themselves.]
