***Official Political Discussion Thread***

8,938
1,570
Joined Dec 30, 2006
Not sure how that is a conflict of interest. It's a legitimate business. Tons of business owners received ppp loans for their business.

There's an entire thread on Niketalk about Stimulus checks and SBA loans/grants.

Not sure why who you support for president should change your eligibility
 
5,805
8,518
Joined Dec 12, 2012
Agreed.

What is the solution? Government-regulated pricing?
I'm sure there are a ton of details I'm not aware of, but from what I understand other countries can keep drug costs low because their governments negotiate costs with pharmaceutical companies.

I've mentioned on here before that I work in medical devices. While that's not pharmaceuticals, it is a similarly regulated industry and I understand the huge costs associated with R&D. I'm sure a lot of people either know or can imagine that anything FDA regulated requires significant testing, and a lot of products end up failing. So, on one hand, I do understand needing to recuperate costs.

However, plenty of medical device and pharmaceutical companies have CEOs earning huge amounts of money. I just did a quick search to see that Pfizer's CEO earned close to $20M in 2019. I feel like it's a similar problem with health insurance where they're beholden to share holders.

I think a huge problem is that these companies are ultimately incentivized to make money. I've been wanting to get out of medical devices because we honestly aren't that different from other companies; we just have more regulation. In my experience, companies use the whole "we're doing something that helps people" bull**** to get you to work more for less money. Companies will cut corners where they can. They will prioritize based on what is profitable.

Sorry for the rambling. I haven't been sleeping well lol. I think the solution is obvious and easy but not within our current system.
 
15,734
22,043
Joined Dec 15, 2012
Agreed.

What is the solution? Government-regulated pricing?
Yes, this would be a start. A cap on profit percentage would be a good place to begin. I understand that these companies need money to fund their R&D expenditures, overhead costs, etc, but there needs to be a limit to the percentage increase that can be made on a given drug and it should be based on cost of production + a reasonable profit margin. These insulin manufacturers didn't even discover nor incur the cost of R&D related to insulin. It makes zero sense for them to pass on 4000% markups on life saving drugs.

Some of the most egregious, despicable tax schemes I've run into in my career came from Pharmaceutical companies. When I was working in public accounting, we had one client who made zero dollars in their 20 year existence. They didn't sell a single drug, patent, technique for manufacturing, etc. and all their revenue to fund their existence came in the form of government grants (state and federal). This was a pretty small operation with about 20 employees who were mostly all making more than a quarter of a million dollars a year being paid off of government grants and stock options from their publicly traded shares. Their entire existence was the research of and curing pancreatic cancer.

In 2014 during the Ebola outbreak, they ventured into research related to Ebola and had actually come up with a pretty promising drug to treat it and eventually sold it to Merck for a one time payment + royalties on the sale of the drug if it ever came into fruition. Prior to doing all this, they set up a tax haven in the Cayman Islands because they wanted to develop and sell the vaccine themselves for a handsome profit. I'm not sure your level of familiarity with the Cayman islands tax system, but they effectively tax income at 0% versus our current 21% tax rate + state tax rate. So not only did this company get 100% funded by state and federal grants, as soon as they were about to start making money they hired a law firm to off-shore their operations in a 0% tax jurisdiction so they didn't have to pay taxes to the US government, despite being fully funded by the US government. Thankfully this whole thing fell through, they ended up selling it to Merck, and ****ed themselves over in the process because they off-shored a bunch of losses that they couldn't use to offset the new US revenue stream from Merck.

A lot of these companies are the reason why the new GILTI tax regime exists and its ****ing despicable that we are not only funding these companies via grants, but they turn around and price gouge patients in return. **** Pharmaceutical companies and everything they stand for.

Sorry for the off topic rant, but I've never come across a more shady industry than this.
 
8,938
1,570
Joined Dec 30, 2006
I'm sure there are a ton of details I'm not aware of, but from what I understand other countries can keep drug costs low because their governments negotiate costs with pharmaceutical companies.

I've mentioned on here before that I work in medical devices. While that's not pharmaceuticals, it is a similarly regulated industry and I understand the huge costs associated with R&D. I'm sure a lot of people either know or can imagine that anything FDA regulated requires significant testing, and a lot of products end up failing. So, on one hand, I do understand needing to recuperate costs.

However, plenty of medical device and pharmaceutical companies have CEOs earning huge amounts of money. I just did a quick search to see that Pfizer's CEO earned close to $20M in 2019. I feel like it's a similar problem with health insurance where they're beholden to share holders.

I think a huge problem is that these companies are ultimately incentivized to make money. I've been wanting to get out of medical devices because we honestly aren't that different from other companies; we just have more regulation. In my experience, companies use the whole "we're doing something that helps people" bull**** to get you to work more for less money. Companies will cut corners where they can. They will prioritize based on what is profitable.

Sorry for the rambling. I haven't been sleeping well lol. I think the solution is obvious and easy but not within our current system.
I'll start deferring to you on the medical device stuff because I only really know second-hand info. But doesn't it seem like a reasonable solution is de-regulation, generics and legal protections for companies to increase competition?

Does that sound like it would help to decrease costs while allowing the companies to still maintain profits?

The obvious draw back in that scenario is the safety but I'm not really sure if that fear is over-stated
 
15,734
22,043
Joined Dec 15, 2012
Not sure how that is a conflict of interest. It's a legitimate business. Tons of business owners received ppp loans for their business.

There's an entire thread on Niketalk about Stimulus checks and SBA loans/grants.

Not sure why who you support for president should change your eligibility
I will say that the PPP program has largely been rife with fraud. There were a lot of larger businesses who weren't supposed to qualify for it in the first place, but ended up fired a large portion of their staff to get under the 500 employee threshold to qualify for a loan. It's not necessarily a conflict of interest, but a considerable amount of fraud has occurred and there has been little government oversight regarding who qualified and received a loan.
 

whywesteppin

Supporter
16,404
25,332
Joined Mar 27, 2004
Yes, this would be a start. A cap on profit percentage would be a good place to begin. I understand that these companies need money to fund their R&D expenditures, overhead costs, etc, but there needs to be a limit to the percentage increase that can be made on a given drug and it should be based on cost of production + a reasonable profit margin. These insulin manufacturers didn't even discover nor incur the cost of R&D related to insulin. It makes zero sense for them to pass on 4000% markups on life saving drugs.

Some of the most egregious, despicable tax schemes I've run into in my career came from Pharmaceutical companies. When I was working in public accounting, we had one client who made zero dollars in their 20 year existence. They didn't sell a single drug, patent, technique for manufacturing, etc. and all their revenue to fund their existence came in the form of government grants (state and federal). This was a pretty small operation with about 20 employees who were mostly all making more than a quarter of a million dollars a year being paid off of government grants and stock options from their publicly traded shares. Their entire existence was the research of and curing pancreatic cancer.

In 2014 during the Ebola outbreak, they ventured into research related to Ebola and had actually come up with a pretty promising drug to treat it and eventually sold it to Merck for a one time payment + royalties on the sale of the drug if it ever came into fruition. Prior to doing all this, they set up a tax haven in the Cayman Islands because they wanted to develop and sell the vaccine themselves for a handsome profit. I'm not sure your level of familiarity with the Cayman islands tax system, but they effectively tax income at 0% versus our current 21% tax rate + state tax rate. So not only did this company get 100% funded by state and federal grants, as soon as they were about to start making money they hired a law firm to off-shore their operations in a 0% tax jurisdiction so they didn't have to pay taxes to the US government, despite being fully funded by the US government. Thankfully this whole thing fell through, they ended up selling it to Merck, and ****ed themselves over in the process because they off-shored a bunch of losses that they couldn't use to offset the new US revenue stream from Merck.

A lot of these companies are the reason why the new GILTI tax regime exists and its ****ing despicable that we are not only funding these companies via grants, but they turn around and price gouge patients in return. **** Pharmaceutical companies and everything they stand for.

Sorry for the off topic rant, but I've never come across a more shady industry than this.
It's sad because those grants are a great way for individuals and small companies to get in on the competition. Funding start-ups this way, even if nothing comes of it for the first 5 or 10 years, is how we stay ahead in the development of new pharmaceuticals and other medical technologies.

I don't know the solution but closing tax loopholes seems like a good way to start.
 
8,938
1,570
Joined Dec 30, 2006
I will say that the PPP program has largely been rife with fraud. There were a lot of larger businesses who weren't supposed to qualify for it in the first place, but ended up fired a large portion of their staff to get under the 500 employee threshold to qualify for a loan. It's not necessarily a conflict of interest, but a considerable amount of fraud has occurred and there has been little government oversight regarding who qualified and received a loan.
While this may be true this has nothing to do with the Kanye story unless you are saying he might be guilty of fraud. That's a pretty bold accusation without more.
 
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