Posted on 05/12/2025 8:47:48 PM PDT by RandFan
@PeterSchiff
When Kamala Harris talked about price-fixing groceries, Republicans were correct to call her policy socialism. The same applies to Trump's desire to do something similar with prescription drugs. But as always, when government interferes with the free market, the plan will backfire, resulting in higher, not lower, prices for prescription drugs in the U.S.
Thanks to overly burdensome FDA regulations, it costs a lot of money to bring a prescription drug to market. As a result, pharmaceutical companies have a finite period of time to recover their costs and turn a profit before their patent expires, and other companies that spent no money developing the drug can knock it off.
Also, for every drug that gets approved, five don't. So not only do drug prices need to be high enough for companies to recover the costs of developing the drugs they sell, but to recover what they spent developing drugs they never sell.
The U.S. is the main market for prescription drug sales, so that is where pharmaceutical companies look to recover their costs first. They supplement that recovery with overseas sales. But since the marginal cost of those sales is very low, they maximize their profits by selling in foreign countries at lower prices.
This is especially true in poor countries that could never afford to pay what Americans can. Pharmaceutical companies still make money on those sales, even if the price is much lower than what Americans pay. But if they charged people living in poor countries the same prices as they charge Americans, the collapse in sales volume would result in lower profits.
Now some of the foreign sales are not to poor countries, but other rich countries. But there, U.S. companies compete with foreign pharmaceutical companies, that sell drugs that might not even be approved in the U.S., and that spent much less to develop their alternatives. To stay competitive and win contracts, U.S. companies often sell their drugs for lower prices than what the same drugs sell for in America.
Trump doesn't think this is fair. So his solution is to force U.S. pharmaceutical companies to charge Americans no more for prescription drugs than what they charge to their poorest customers in the world. According to Trump, this will result in pharmaceutical companies slashing prices in America to match prices in Bangladesh. The opposite will occur. Prices in Bangladesh and all other countries will be raised to match prices in the U.S.
The result will be a decline in earnings for U.S. pharmaceutical companies due to collapsing overseas sales. Since those companies will now have lower foreign profits to offset the cost of developing drugs, the price they charge for all drugs will go up, including here in the U.S. So the net result of the president's plan will be to lower U.S. pharmaceutical company profits and raise the prices Americans pay for prescription drugs.
Then why do foreigners pay so much less than we do?
Why have drug companies moved all their manufacturing overseas?
He makes a few million, I know.
Corrupt.
Would you private message your vitamins 😊
““Peter Schiff defends Pharma: “It costs a lot of money to bring a prescription drug to market””
and it costs WAY more for the tens of billions spent on TV ads and bribes to Congress ...”
Why is there commercials for drugs? We cannot go to the pharmacy and pull them off the shelf. Does big pharma think I am going to watch a Skyrizi commercial and go to my doctor and say “I want that?”
Not given how pharma hoses the US. The US government is by far their biggest individual customer—and so could simply force most-fvored nation as any big buyer can.
if the drug is sold for 80% lower somewhere else America is getting ripped off.
the drug should cost the same around the world.
that’s the point professor
Roughly 1/3 of all pharma drugs are removed because of issues not discovered until they have been in use for over five years.
Zantac is an example of this. Millions were taking it for acid indigestion. Including me. It had been out for ten years. It was an over the counter medicine that was removed because of problems.
There are other counties that have not approved drugs like Ozempic for weight loss. I figure for good reason.
Imagine the money they make in America off that stuff.
Designer drugs are all pharma cares about anymore. Getting people hooked on them at their government run “doctor” offices makes a lot of money.
Rand is wrong once again. Trump isn’t price fixing, he is just making sure that Americans aren’t paying for other countries to get the same thing at a low price.
Our country is out of whack. It is going through a reset. Fasten your seatbelts and quit fighting in the aisles, Rand, Peter.
Oh they will. And it will not be by force like it has been in the US for years.
Great point!
What good points does he make?
This isn’t price-fixing, it’s ensuring markets are more equal. There isn’t set prices, they just can’t gouge Americans unless they gouge everyone else too.
“But since the marginal cost of those sales is very low, they maximize their profits by selling in foreign countries at lower prices.”
How does selling at much lower prices maximize profits? The marginal cost of selling in other countries is about the same as selling in America - the development costs don’t just disappear, the Pharma companies choose to only charge Americans for that. If selling at lower cost really did maximize profits, why wouldn’t selling at cheaper prices in America maximize profits too?
Sales in poor countries is the only somewhat legitimate argument here, although if they “still make a profit” at those prices, why wouldn’t they still make a profit selling the drugs to Americans at the same price?
Sales in rich countries have to be low-price due to competition? Well then maybe the competitor deserves the sales more if they can produce an equivalent product at a lower cost. Or if they’re only cheaper due to government subsidies, then that’s a trade issue. But if they simply have cheaper RnD, sounds like our companies need to find a way to be more cost-efficient in development.
What Trump should have done that’d be much easier and less of a fight, would be to simply allow Americans to purchase all their drugs from overseas. If Pharma profits tanked cause no one bought them here, they’d naturally equalize the pricing on their own. As it is now, these US’s gov’t regs are what is allowing Pharma to overcharge here, and Americans just have to take it.
He’s right R&D is expensive but why should the US foot the bill. Spread it around.
I was paying $15 for 90 count of Colchicine. On day, it went to $6 a pill. I ordered it from Canada for $90 for $60.
How much Pharma R&D is directly funded by the US government? We know the government gave the pharmaceutical companies billions to fund Covid development, plus the exemption from liability lawsuits was worth billions and perhaps trillions. Add to that, the federal government bought the entire supply of product for two years at a profit to the companies. The savings in marketing and advertising costs was also worth billions to the companies.
Consider also most pharmaceutical products used to be manufactured in the US and Puerto Rico. Big Pharma has outsourced those factories to foreign nations resulting in the loss of American jobs and putting the US at strategic risk in the event of future conflicts with nations where our drugs are now produced. Big Pharma earned obscene profits through outsourcing at the expense of the American worker and our national security.
In addition, the federal government spends billions on healthcare and biomedical research at the nations universities and teaching hospitals. The results of that research are monetized by the universities and the collaborating pharmaceutical companies and medical equipment manufacturers. They receive a free ride on this research wheres the American consumer then pays through the nose for the products created from the research they funded, while foreign consumers receive steeply reduced prices.
Also consider the substantial R&D tax credits the big pharmaceutical companies receive which are in reality another taxpayer subsidy for their research costs.
Cry me a river on big Pharma and its apologists. American pharmaceutical companies are in many ways corporate grifters, sucking on the taxpayer teat and then turning around and charging the American taxpayer the highest prices in the world. This price gouging allows them to charge lower prices to the wealthy government controlled health care systems in Europe and Canada as well as third world countries.
Rand Paul can preach free enterprise all he wants. Pull all of the direct and indirect subsidies from Big Pharma, including their blanket protection from lawsuits, and let the companies charge whatever they wish for products developed 100% on their own dime. However, as long as the federal government is subsidizing R&D directly and indirectly, giving them favorable tax treatment, and protecting them from product liability, the pharmaceutical market is not a free market and the government is right to demand drug pricing to US consumers be lower than pricing to foreign consumers.
I think the idea is that if Sweden is at $100 and US is at $1000, Pharma will raise Sweden to $300 so they can charge the US $300 based on the lowest price.
Yes, it does, Pete.
So the natural thing to do is to have the stupid Americans pay for it.
Right???
That’s how I read it as well, European countries will have to pay more and the Average American will pay significantly less
Sure, racing out the door, will do late this afternoon.
Peter Schiff defends Pharma: “It costs a lot of money to bring a prescription drug to market”
Whatever it costs, every country that uses it needs to share the cost of developing it. Why should the USA shoulder 100% of the R&D? (We shouldn’t.)
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