There is no such thing as a major US Pharma company. Major Pharma Companies and the industry are multinational. Revenue from the US is what makes drug development profitable, no matter where the companies are located. If the US paid the same as Europe, most drugs would not be economical to develop.
When you sit in a go/no-go decision to develop a new drug, you model US revenue and ROW revenue to see if the product is worth developing. US Revenue is usually 2x what can be made elsewhere, and pushes the product into the green.
The new drug in this article is Cobenfy, by Bristol Myers Squibb. Bristol Myers Squibb (BMS), is a multinational pharmaceutical company. BMS Revenues from US sales is 32 Billion. Revenues from every other country put together is 13 Billion. [1, pg 19]. The Company Bristol Myers Squibb has a profit Margin of about 14%. IF US paid like Europe, the profit margin would be -35% per year.
This is the way the US props up the global pharma industry. Now, I personally dont think this is something to be proud of. I think it would be better to simply not have many of the drugs we do, than pay the high prices. Alternatively, if somehow the US price matched with Europe, perhaps Europe would be forced to raise their prices.
The current state is like splitting the electric bill with a housemate who will only pay 25%. As long as you are scared of the power getting cut off, you are stuck paying most of the bill and being exploited.
The US health industry is deeply flawed, but it isnt just the private/public distinction. Many European countries have private healthcare and still have lower costs. It is systemic dysfunction and fear that drives the costs.
There is no such thing as a major US Pharma company. Major Pharma Companies and the industry are multinational. Revenue from the US is what makes drug development profitable, no matter where the companies are located. If the US paid the same as Europe, most drugs would not be economical to develop.
When you sit in a go/no-go decision to develop a new drug, you model US revenue and ROW revenue to see if the product is worth developing. US Revenue is usually 2x what can be made elsewhere, and pushes the product into the green.
The new drug in this article is Cobenfy, by Bristol Myers Squibb. Bristol Myers Squibb (BMS), is a multinational pharmaceutical company. BMS Revenues from US sales is 32 Billion. Revenues from every other country put together is 13 Billion. [1, pg 19]. The Company Bristol Myers Squibb has a profit Margin of about 14%. IF US paid like Europe, the profit margin would be -35% per year.
This is the way the US props up the global pharma industry. Now, I personally dont think this is something to be proud of. I think it would be better to simply not have many of the drugs we do, than pay the high prices. Alternatively, if somehow the US price matched with Europe, perhaps Europe would be forced to raise their prices.
The current state is like splitting the electric bill with a housemate who will only pay 25%. As long as you are scared of the power getting cut off, you are stuck paying most of the bill and being exploited.
The US health industry is deeply flawed, but it isnt just the private/public distinction. Many European countries have private healthcare and still have lower costs. It is systemic dysfunction and fear that drives the costs.
https://www.bms.com/assets/bms-ar/documents/2023/2023-bms-an...