Comment by BugsJustFindMe
3 days ago
> I have no idea what the correct margin for essential cancer drugs is.
So let's talk about it and think about it and form an idea. There's no universally right or wrong answer, but you should at least be able to decide what answer is right to you.
> I don’t think it should be a 10x markup.
What about 1x markup?
> Intuitively, it seems that there’s something wrong with price gouging
There is, but you're relying on the word "gouging", and without identifying what price you think is gouging vs reasonable profit, stopping at the point where you express that "too much is too much" doesn't get us any closer to having actionable goals.
So, important question: What problem are we trying to solve here? Is there any benefit to the overall populace for us in HN to debate what we feel is "overcharged"?
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But to go along with your exercise, I take a look at current market dynamics and compare it from there. Apparently, the typical wholesale markup is 20-40%, and stores will typically markup another 20-50% on top of that. So we're talking roughly a 125% markup on the higher ends from the factory into the consumer's hands as a very rough average (VERY rough, markups vary a lot per product and industry).
That's with two chains of markup, so clearly 1000% feels absurd from one part of such a chain. Outside of factors like drinks (which are easy to scale and can have markups well into the hundreds), it's pretty hard to find any part of the chain as not "overcharged" once we go past 100% markups in any given place.
on the most generous side, Costco famously has markups limited to 14% (albeit they rely on bulk purchases to mitigate that). and subsidized vehicles used to generally be a 10-15% markup price. So I'd say 15% is about the bare bottom of what to expect markups without some kind of twist. e.g. printers selling at a loss, making up for it with high markups for ink (another product that's easy to scale and marked up into the hundreds). or previously, a video game console in order to sell games (software, whose markup is hard to really determine since it's infinitely scalable and costs are more to make up for R&D).
> Is there any benefit
I perceive that one of the reasons that people who want change in the devastatingly perverted system are repeatedly plowed over, cheated, and ignored when it comes to making actual policy is that as a group those with the most reason to be upset are easily swindled into engaging only vague moans about some miniscule ignorable example being bad but not being ready to articulate what should be done instead as a set of categorical rules. And it happens over and over again until the voting public are bred into helplessness, and the way out is to talk about things in actionable ways instead of in vague handwavy ways. And the path to collective dialogue shift has to start somewhere, so it can start with us. Was it painful?
>And the path to collective dialogue shift has to start somewhere, so it can start with us.
I suppose so. But I have no insight of these concepts outside of the 30 minutes I spent studying various markup strategies. And I have no interest in trying to personally influence policy (especially in something I studied for 30 minutes ". I don't know how many qualified people in this community can influence such stuff (or any that will read HN specifically) , so I simply question the tactic's effectiveness.
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