Welcome to Z-Pack:.1 topic, 2 days a week, 5 minutes. Easy to consume and fast-acting⚡️

Trying out just two posts a week on Tuesdays and Fridays - less frequent but a bit longer, so please let me know if you prefer this in the poll below!

If this is your first Z-Pack, welcome - I'm Zach.

⬇️ Let’s get it.

🔥 Big Pharma isn’t all bad

Look, I get it — there’s a lot to complain about when it comes to the American pharmaceutical industry — I agree with you! For example:

• Predatory marketing (have you seen those old Valium ads?)

• High prices

• Avoiding taxes (by making most of their revenue in the U.S. but reporting their profit in low-tax countries)

• The opioid crisis (thanks, Sackler family, for being evil)

But, hang with me — just read this tweet below —

This is an incredible achievement, even if it’s still in clinical trials!

We need to fix the pharma industry, but we should still recognize big achievements from the industry, like the COVID vaccines that saved millions of lives.

Without pharma, we would NOT have:

• Antibiotics (saving hundreds of millions of lives since invented)

• Life-saving drugs for cancer, HIV/AIDS, and heart disease

• Vaccines — especially partnerships between pharmaceutical companies, academic institutions, and governments to accelerate research, like during the COVID-19 pandemic.

Inarguably, these things have saved millions upon millions of lives and allowed us to advance our societies to where we are today.

But what we forget is that building and innovating things (housing, manufacturing like semi-conductors, drugs) takes LOTS of money. 

We can’t just make this stuff appear overnight like a movie.

Again, there are problems here to fix! Let’s just look at pharma’s high prices, for example —

If you’re wondering why pharma prices drugs so high in the U.S., here’s a breakdown by Alec Stapp, who works at my favorite policy think-tank out there, Institute for Progress:

1. Developing drugs has high fixed costs, but low marginal costs — so they’re super expensive to research and develop on the front-end.

2. Pharma companies have to charge high prices to make a profit on this investment, so the gov't grants monopolies on the patents. If they didn’t have these things, there’s no incentive to create and innovate. No patent = generic versions of it would be made my competitors, and they’d compete on price in a losing game. This is why you can find choose between different generic drugs, like Pepto Bismol — there’s no patent.

3. The high prices that pharma gets incentivize investment in new drugs, because they know they can make money and run a business. Without the future ROI, our incredibly innovative American pharma industry goes *poof*.

4. So, we need to make sure pharma can turn a profit without price gouging us to hell. So what do we do? Here’s just two options —

• Innovation prizes

  • Who invents the best gets paid by the gov’t!

• Subsidies from the govt

  • Lots of American industries are subsidized by the govt, not just because they’re lobbied, but also because they provide net benefits for society — fossil fuels, airlines, corn and grain, etc. We need these things!

We have lots to do to fix the industry, but we need these incredible innovations! And we know that (1) we can fix the problems, and (2) other solutions are coming to the market, like Mark Cuban’s Cost Plus Drugs.

Still curious?

• I def recommend checking out Institute for Progress online and following their people like Alec Stapp

• Here’s a great book on current issues across our healthcare system and how we can fix them

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Thanks for taking the Pack,

Zach

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Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.