To continue on from the 2012 American Elections thread, my friend got back to me about why he thinks it's not entirely feasible for healthcare to be socialized in the US. Just copying this straight out of an e-mail.
We can talk more about it, but very quickly, and based only on public
sources (not NDA covered), that's not at all true about R&D. It's
actually a very complicated issue with companies trying to balance
sourcing new products from R&D and from M&A, but most companies still
spend a lot on R&D - to the tune of billions. Sales and marketing is a
very high expenditure as well though. I can't comment on what the
ratio between the two might be, but rest assured that R&D is
responsible for billions and billions of expenditures.
You can google a few major companies (ie Roche, GSK, Allergan), look
at their bottom line profit and also their R&D expenditures. The R&D
Expense to Profit ratio is really high for most companies (a few
exceptions of course). It varies, but for example, Roche spends 8+
billion n R&D and makes a net profit of about 8 billion. That's on the
high-side, but its not cheap, and the government certainly can't
subsidize that level of R&D. Also, pharma development is
international! Who pays for it then?
If the argument is to save money from sales and marketing, in my
opinion, that's not very practical or beneficial. And I'm not sure how
subsidized drug development helps save on sales and marketing, besides
that it creates intense competition for limited public funds (and
hence fewer products to compete with each other). Ultimately don't see
the good for society. Bear in mind that sales and marketing in
healthcare often serves as education for doctors and patients. Doctors
and patients (worldwide) rely on pharma companies to learn about new
therapies; that's even the case in Europe where medicine is
Its overly idealistic for Americans to envy Europe's socialized
medicine; as long as Europe is so heavily socialized, America cannot
become that way, because pharma companies need to make money
somewhere, and its more profitable here. And who can argue that it's
beneficial for them to make money (and then, presumably, use that
money to innovate)?
I know that was a bit scattered - when I have more time I can put
together a more coherent argument for your internet buddies. Let's
talk another time about this.