Trump Promises Megathread: Kept or Broken

[knapplc]

Thanks for the great info, ColoNoCoHusker.

[RedDenver]

 

Could be, Red. Lord knows that's still a talking point and it's been 6 years.

 

The government negotiating with Big Pharma to bring drug prices down is one of the most important things we could do to bring the cost of insurance and the overall healthcare spending down. However, that's a decidedly progressive policy and spits in the face of conservative orthodoxy because then you're tampering with the free market, increasing Big Government, etc. etc. Hence, NONE of the GOP plans floating out there include anything like that, and most actually seek out to scale back Medicare/Medicaid ("entitlement reform").

 

So, none of the plans they're drawing from include this tactic, and I ASSURE you, tweeting at Big Pharma isn't going to bring those prices down. If something like this winds up in their final healthcare plan, Trump is going to have to inject it himself.

 

I think the issues with Pharma are misunderstood. The issue with Big Pharma is the cost structure to bring a drug to market and then the process get insurance to cover it. For every successful drug, there are hundreds that don't go anywhere. The successful drugs have to cover the costs of the failures ***. The rules around capitalizing research dollars in biotech make partnering with research universities less attractive in many situations. Insurance companies have more influence over drug pricing than is healthy. And then, as you mention, the pricing based on each country's wealth index exacerbates the issue. Making changes to this structure will bring costs down faster than almost anything else.

 

Fundamentally, there is already a monopoly on individual drugs (even accounting for generics). Acknowledge it and act accordingly instead of ignoring it and letting it get out of hand...

 

*** Viagara is a wonderful example. It was originally developed as a heart or blood pressure med in the early 90s. It wasn't viable due to a persistent side-effect. It took someone with some foresight to fight internally to look at the drug for E.D. Not only has it been a success, it launched a new drug sector and is now being used to treat other non-E.D. conditions. None of the secondary research could be accomplished without the drug approved for a primary condition. It is too cost-prohibitive to conduct secondary on their own...

 

One thing to keep in mind is that something like 95% of the research funding actually comes from our taxes (sorry, I can't find the source I originally read right now, if someone has that data, I'd be happy to be proven right or wrong). Drug companies don't spend as much money on research as compared to marketing (here's a link showing Pfizer spent ~20% of revenue of advertising vs ~14% on research). From the same source, here's a graph on the allocation of revenue for the industry:

Here's another source saying 18% of revenue is spent on research.

[NM11046]

Each company's investment in research is different.

 

A company like Pfizer is known for taking drugs, many of them "me too's" and marketing them like crazy for profit. They also do a fair amount of purchasing of molecules from smaller start ups' that have already been studied and gone through the trial process (which takes years and is the expense, and is also where drugs fall out of the pipeline due to lack of efficacy, side effects etc)

 

It would be better to look at the industry as a whole than one company. If I have time at some point I'll share additional data.

[ColoNoCoHusker]

A lot of tax money goes towards research but the figures I have come across have been much lower than 95% for private biotech research. The issue is the way the research is structured; if indirect research/relationships were counted it could get that high I suppose.

 

As far the percentage of R&D, that is massive for a private enterprise. If you compare it to other sectors and translated to actual dollars it would stand out even more. Tech/software companies typically carry around 8-10% R&D? I remember hearing IBM in it's heyday was like 2-4% true R&D; most of it's research was paid contract for clients so it was actually a revenue center...

 

And the industry is highly varied. One company really doesn't represent the market. It's tough because looking at the entire industry also glosses over some challenges. It's interesting if nothing else

[RedDenver]

Each company's investment in research is different.

 

A company like Pfizer is known for taking drugs, many of them "me too's" and marketing them like crazy for profit. They also do a fair amount of purchasing of molecules from smaller start ups' that have already been studied and gone through the trial process (which takes years and is the expense, and is also where drugs fall out of the pipeline due to lack of efficacy, side effects etc)

 

It would be better to look at the industry as a whole than one company. If I have time at some point I'll share additional data.

Agree, which is why the graph showing 17% and the link claiming 18% were in my post. Those are for the entire industry. Maybe unclear that's what I was posting.

[RedDenver]

A lot of tax money goes towards research but the figures I have come across have been much lower than 95% for private biotech research. The issue is the way the research is structured; if indirect research/relationships were counted it could get that high I suppose.

 

As far the percentage of R&D, that is massive for a private enterprise. If you compare it to other sectors and translated to actual dollars it would stand out even more. Tech/software companies typically carry around 8-10% R&D? I remember hearing IBM in it's heyday was like 2-4% true R&D; most of it's research was paid contract for clients so it was actually a revenue center...

Good points that give perspective. I'm trying to provide data for people to draw their own conclusions.

[NM11046]

Sorry - I misread.

 

This is the recent article I read - no percentages though, but total dollars is acknowledged as well as failure rates etc.

 

http://www.fool.com/investing/general/2016/04/30/the-cost-of-developing-an-fda-approved-drug-is-tru.aspx

[ColoNoCoHusker]

Sorry - I misread.

 

This is the recent article I read - no percentages though, but total dollars is acknowledged as well as failure rates etc.

 

http://www.fool.com/investing/general/2016/04/30/the-cost-of-developing-an-fda-approved-drug-is-tru.aspx

 

Good link, thanks for posting it. I had access to referenced Tuft's research data previously and it was interesting to dig through...

[NM11046]

 

Sorry - I misread.

 

This is the recent article I read - no percentages though, but total dollars is acknowledged as well as failure rates etc.

 

http://www.fool.com/investing/general/2016/04/30/the-cost-of-developing-an-fda-approved-drug-is-tru.aspx

 

Good link, thanks for posting it. I had access to referenced Tuft's research data previously and it was interesting to dig through...

 

There was an update on that Tufts report that came out in April (I think) of 2016 that you should take a look at if all you saw was the 2014 version.

[ColoNoCoHusker]

 

 

Sorry - I misread.

 

This is the recent article I read - no percentages though, but total dollars is acknowledged as well as failure rates etc.

 

http://www.fool.com/investing/general/2016/04/30/the-cost-of-developing-an-fda-approved-drug-is-tru.aspx

 

Good link, thanks for posting it. I had access to referenced Tuft's research data previously and it was interesting to dig through...

 

There was an update on that Tufts report that came out in April (I think) of 2016 that you should take a look at if all you saw was the 2014 version.

 

 

I believe that was more in-depth analysis on the 2014 data?

 

2014 release - http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014_cost_study

2016 release - http://csdd.tufts.edu/news/complete_story/tufts_csdd_rd_cost_study_now_published

 

To put the costs into perspective, there are only ~750 companies on the Fortune 1000 list with gross annual revenue in excess of the per compound cost. Absolutely staggering.

 

"The $2.558 billion figure per approved compound is based on estimated average out-of-pocket costs of $1.395 billion and time costs (expected returns that investors forego while a drug is in development) of $1.163 billion.

When post-approval R&D costs of $312 million are included, the full, product lifecycle cost per approved drug, on average, rises to $2.870 billion"

[AR Husker Fan]

[Danny Bateman]

Relevant to #21 (cut taxes on the middle class):

 

 

On His First Day in Office, Trump Raises Taxes on Middle-Class Homebuyers

 

 

IN ONE OF the first official acts of his presidency, Donald Trump has increased taxes on a million middle-class homebuyers.

 

The Department of Housing and Urban Development on Friday reversed a scheduled 0.25 percent cut in mortgage insurance premiums issued by the Federal Housing Administration (FHA). For a mortgage worth $200,000, this adds $500 to a homebuyer’s annual costs.

These insurance fees are effectively a tax on middle-class homeownership. By reversing the cut, which was scheduled to go into effect on January 27, one week from today, Trump will be taking more money from FHA homebuyers to keep in government coffers.

 

I kind of like this advice I stumbled on yesterday from Vox:

Watch what Donald Trump does, not what he says. A con man’s words have no value.

[BigRedBuster]

This was signed within a couple hours of being sworn in.

 

I'm failing to see why this was that important to do instantly upon taking office.

[BigRedBuster]

Double post.

[Moiraine]

This was signed within a couple hours of being sworn in.

 

I'm failing to see why this was that important to do instantly upon taking office.

 

 

I'm guessing it benefited some of his friends, so they told him to do it.

 

That said I don't mind tax increases as long as there aren't MORE increases on middle class than there are on people making more money. We shouldn't be giving tax breaks or subsidies to billion $ companies, but we do it anyway.