It’s an interesting version of “negotiate” isn’t it?

Most interesting:

The bill includes a plan for Medicare to negotiate prices with drug companies that would set a ceiling for what Medicare would pay for certain medications: no higher than 120 percent of what several other wealthy countries pay. Pharmaceutical companies that did not participate in the negotiations would be subject to a severe excise tax.

I can see negotiate meaning “would you like to give us a nice price?” I can see negotiate meaning as the NHS does, we’re a big customer, give us a discount or we won’t buy it.

But negotiate as in cut your price or we tax you? Bit Lucky Luciano there, isn’t it?

18 thoughts on “It’s an interesting version of “negotiate” isn’t it?”

  1. I don’t see a problem in using gangster tactics to cut drug prices as long as you accept the corollary of no new drugs.

  2. Bloke in North Dorset

    Making them an offer they can’t refuse

    Would you like to come and set up in England?

    no higher than 120 percent of what several other wealthy countries pay.

    I guess that’s just sloppy reporting and they aren’t prepared to pay more than double the highest price, but 20% higher?

  3. I’d agree with dearieme. Negotiations usually depend on who can bully whom.

    But I’m certainly not in a position to decide what incentives are necessary to ensure the supplies of new drugs. I’d guess his position is correct.

  4. The list of unintended consequences likely to flow from this approach is probably numbered in the hundreds, some very, very serious to the world’s health.

  5. Whelp…. The US has negotiated on the principle “wanna have my fleet parked in your backyard? Just Precaution” for decades….

    Sometime, somewhere, someone’s going to pick up on the basic “Ghengis Khan” principle. And the next likely lad is going to try it…

    Original, it is not,

  6. OK, so we’ll stop supplying your anti-dementia pills, Mr Biden.

    TtC I have a suspicion this might be deliberate. Cherchez la femme.

  7. Wasnt there some science fiction story, (the syndicate? the syndic?), About a future where the government was very specifically referred to as “The syndicate” and the opposing government was called “the mob”

    And I remember reading some sociology/poli-sci work drawing an analogy between the government and organized crime back in the early ’80s (“war and the state as organized crime”, or something like that)

  8. One of the reasons why innovation in pharmaceuticals takes place outside Cont8nebtal European is because Governments cap prices. Instead of spending money on research, the pharmas spend less, but still a considerable amount, on educating (aka bribing) prescribers and negotiating (aka bribing) civil servants and politicians.

  9. The Syndic? Cyril Kornbluth, IIRC. He also proposed ‘The Marching Morons’, leading to Idiocracy long after his death.

  10. Bloke in North Korea (Germany province)

    “One of the reasons why innovation in pharmaceuticals takes place outside Cont8nebtal European is because Governments cap prices.”

    Not really, because you can sell your drug anywhere you can persuade the regulator to approve it. Boston/New Jersey is for sure where most of it is at, historics and talent pools, but plenty of innovative research in Europe, and increasingly in China.

    In fact, European companies (inc Switzerland) routinely gets more FDA approvals for new drugs than US companies. The US companies are better at getting new indications.

    “Instead of spending money on research, the pharmas spend less, but still a considerable amount, on educating (aka bribing) prescribers and negotiating (aka bribing) civil servants and politicians.”

    The slush funds are very private and secret these days, and little goes to prescribers. I do quite a bit of that pharma jolly “educating”. Pre-rona the typical gig was an (at best) average chain hotel, one night stay and hotel buffet lunch. At conferences you now (pre-rona) see signs on booths like “Board Certified Physicians from the Commonwealth of Massachusetts may not take branded pens or coffee cups or anything else”.

    Compare to back when I was training, it was all-expenses monthly booze ups at swanky restaurants, at the bottom end of a field with few new drugs to promote.

  11. The NHS has a deal, dating from 1956 with pharmaceutical companies that promises a return on their investment in research in the UK through profit margins on drugs bought by the NHS. The cleverer CFOs took most of the profits on drugs where the majority was exported setting a highish reference price which foreign governments used as a benchmark for prices approved in their own countries. The NHS only needs to negotiate with Swiss and others who develop new drugs outside the UK.
    The stupidity of Alastair Campbell was demonstrated by the Blair government making headlines about buying “cheaper” generic drugs which *increased* the cost to the NHS by the difference between the production cost of the original drug and the sale price of the generic copy – which had higher production costs due to smaller volumes.

  12. Bloke in North Korea (Germany Province)

    How does that work today, with almost all R&D and trials done globally? Roche and Novartis have employees in the UK, large number of their clinical trials include UK patients. At a conservative guess, more than half of _all_ phase 3 trials for new drugs that run in Europe include UK patients, irrespective of what country the sponsor’s HQ is in. Does that mean the NHS doesn’t negotiate with them?

    Genuine question.

  13. @ BiNKGP
    Sorry, I’m not up-to-date on details.
    I was thoroughly briefed and periodically updated by an expert when I was in my thirties/early forties – since then I’ve followed news on the subject out of interest so I am aware of the general situation (including a recent reduction in the rate of return to reflect lower cost of capital) but not details. [My personal expectation would be that the NHS scrutinises the company’s R&D accounts to identify the costs attributable to each drug and negotiates with the company the price if less than 50% of its R&D costs are UK-based. Since R&D in Switzerland, Germany and the USA are not included in the capital upon which a return is guaranteed, the allocation of R&D overheads needs to be audited]

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