Because China doesn’t have unilateral say. I’ll illustrate this by example:
Say a drug is $400 here. China has price controls and refuse to let it sell for more than $250, but Burkina Faso says they’ll only accept it for $100. Under the new rule, pharma cannot sell the drug for more than $100 in the US, even if China raises their prices. Pharma’s choices are (a) stop selling the drug in poor countries so they can charge the US more (terrifyingly bad optics and probably kills thousands) or (b) lower the price in the US (hurts profits)
In that situation they will pull out of the Burkina Faso market every time. They cannot operate at a loss; if forced to do so companies will simply discontinue the product.
That's the thing. They aren't operating at a loss. They are functioning on a 4 billion dollar PROFIT! Not revenue. PROFIT! Their revenue is like 10 times their profit. They have 150 billion dollars in assets.
Obviously no government should be telling any business how much they can sell something for, but the patent system makes it impossible to compete. We have a government mandates monopoly on a substance to safeguard pharma research from active competition on a new product, but this should also mean that there are government restrictions on pricing of the product to guarantee a revenue that covers costs of R&D but not for radical profits.
Pharma loves big government... until it tells them to stop charging $300 for the amount of insulin that costs $100 somewhere else that is literally comparable to the US in income.
No more US citizens financing the healthcare of the world.
I was thinking the other way. Like if a pill costs 20 cents to make here and 10 cents in China and China sells them for 10. Even if they were barely able to keep it for a few months, it would cause us to lose a lot more.
All these companies are already producing their medicine in China. That would be China competing with China. Anyway no tears lost for big Pharma. They have set up an insane patent scheme and doctor incentive program at the cost of the patient.
Yeah but you'd have to buy from china, I assume this will mostly affect drugs the big pharmas own the patent, are directly producing themselves or licensed local drug companies to produce, generic or unlicensed Chinese production will not be used as the price reference
Couldn't this backfire? Why wouldn't China take a small loss that causes us to lose a lot more?
Because China doesn’t have unilateral say. I’ll illustrate this by example:
Say a drug is $400 here. China has price controls and refuse to let it sell for more than $250, but Burkina Faso says they’ll only accept it for $100. Under the new rule, pharma cannot sell the drug for more than $100 in the US, even if China raises their prices. Pharma’s choices are (a) stop selling the drug in poor countries so they can charge the US more (terrifyingly bad optics and probably kills thousands) or (b) lower the price in the US (hurts profits)
In that situation they will pull out of the Burkina Faso market every time. They cannot operate at a loss; if forced to do so companies will simply discontinue the product.
That's the thing. They aren't operating at a loss. They are functioning on a 4 billion dollar PROFIT! Not revenue. PROFIT! Their revenue is like 10 times their profit. They have 150 billion dollars in assets.
Obviously no government should be telling any business how much they can sell something for, but the patent system makes it impossible to compete. We have a government mandates monopoly on a substance to safeguard pharma research from active competition on a new product, but this should also mean that there are government restrictions on pricing of the product to guarantee a revenue that covers costs of R&D but not for radical profits.
Pharma loves big government... until it tells them to stop charging $300 for the amount of insulin that costs $100 somewhere else that is literally comparable to the US in income.
No more US citizens financing the healthcare of the world.
I was thinking the other way. Like if a pill costs 20 cents to make here and 10 cents in China and China sells them for 10. Even if they were barely able to keep it for a few months, it would cause us to lose a lot more.
Companies here will figure out how to make it better/cheaper
All these companies are already producing their medicine in China. That would be China competing with China. Anyway no tears lost for big Pharma. They have set up an insane patent scheme and doctor incentive program at the cost of the patient.
Yeah but you'd have to buy from china, I assume this will mostly affect drugs the big pharmas own the patent, are directly producing themselves or licensed local drug companies to produce, generic or unlicensed Chinese production will not be used as the price reference