wtf maaaan?

http://money.cnn.com/2006/10/31/news/companies/generics/index.htm?cnn=yes

10/31/2006 1:57:03 PM

did you not know this? keeps other countries from cashing in on R&D done elsewhere

10/31/2006 2:07:16 PM

CALL IT IGNORANCE!

10/31/2006 2:14:46 PM

10/31/2006 2:36:05 PM

Ain't no such thing as a worldwide patent.

There are a FEW countries with patent sharing, AKA the US and the UK, but you basically have to apply for a patent in every damn country in the world to ensure protection.

There have been several attempts in the last couple of decades to come up with a unified global patent system, but they have pretty much all failed miserably once they got out of the idea phase.

10/31/2006 2:43:08 PM

We need this for drug companies. And then we need to stop paying 99% of the costs of R&D in drugs ourselves while they're next to free in other countries.

A world price for drugs would be fantastic. Reimporting them from Canada would get the process started by making it more expensive in Canada and a hair cheaper here.

10/31/2006 2:45:10 PM

^^^ haha exactly what I thought of

[Edited on October 31, 2006 at 3:22 PM. Reason : ]

10/31/2006 3:22:01 PM

^^Uh it wouldnt make drug prices any cheaper, it would just make them as expensive everywhere.

Do you even know WHY drugs cost what they do?

10/31/2006 3:27:57 PM

The non-bs answer is because they can charge that much.

10/31/2006 4:57:19 PM

Quote :

"^^Uh it wouldnt make drug prices any cheaper, it would just make them as expensive everywhere. Do you even know WHY drugs cost what they do?"

Noen, you gotta be kidding me here. The drug costs in the US would go down (somewhat) if we reimported them. Of course they would be more expensive everywhere else if we did this too, hence

Quote :

"Reimporting them from Canada would get the process started by making it more expensive in Canada and a hair cheaper here."

But you're an idiot if you don't think a world price for drugs that equalizes supply and demand wouldn't be any less than it is in America. With a world price, rather than us paying for all the R&D like we do now, the cost would be lower for us and more expensive for the world.

Jesus, that really is simple economics. If we took away their ability to price discriminate based on geography, the price would fall here. How much? Hard to tell, probably not too much, but some.

10/31/2006 5:13:36 PM

Dude this is a capitalist market.

If you institute worldwide patents, they aren't going to lower prices, they are just going to MASSIVELY up their bottom lines, and increase research that much more.

That's the entire point of the pharma industry, is exclusive rights, inflated prices for a small time to recoup R&D, and then the drug becomes public domain and everyone can "afford it".

Reimporting would destroy the US industry with a quickness, and would spell the end of new drug development, at least in this country.

------------------

You are confusing two issues. 1) is worldwide patents, which is what im talking about
2) is this world drug price fixing, which is fucking retarded.

This is a FREE MARKET ECONOMY. YOU CANT FUCKING FIX PRICES because they are "TOO HIGH" for you. You want to talk like it's simple economics, the ramifications of doing something like that are ridiculous. Everytime the government has tried doing something like this, it's been a giant fuck up. Sure works for regulating trains and airlines after all.

[Edited on October 31, 2006 at 5:20 PM. Reason : .]

10/31/2006 5:17:15 PM

Reimporting would destroy the US industry?

You know we're talking about reimporting US drugs, right?

I mean, if I sold candy bars to Canada and then brought them back into the US, would that ruin the candy bar business?


The deal with pharma is that Americans pay the price that is high enough to recoup R&D while the world gets a price closer to a normal rate of return on non R&D investment. If, instead, the whole world paid one price it would be high enough to recoup R&D with a normal return on investment and the price would still be lower than it is in the US now. That's because you'd have MANY MANY MANY more people paying at the same price rather than one group paying at marginal cost and one group paying high enough to recoup R&D and a normal rate of return on top.

This is really quite simple. We should drag this into the SoapBox where Loneshark and Kris, who also know economics, will tell you this.

__

I'm not confusing the two. I responded to

Quote :

"Do you even know WHY drugs cost what they do?"

which has nothing whatsoever to do with worldwide patents.

___

Quote :

"This is a FREE MARKET ECONOMY. YOU CANT FUCKING FIX PRICES because they are "TOO HIGH" for you."

Prices ARE fixed you fucking moron. The price of a drug is fixed by the pharmaceutical company because they have been granted a temporary monopoly (which is fine, and in fact, necessary)

What I'm responding to is the fact that drugs here cost more than they do anywhere else, because of price discrimination practiced by pharaceutical companies. If you don't get this, you are beyond hope.

[Edited on October 31, 2006 at 5:25 PM. Reason : .]

10/31/2006 5:22:18 PM

hahahahahahahahahahahahaha

not even going to waste my time

10/31/2006 6:41:17 PM

if we import drugs from canada all we are doing is having the G&S tax that canadians pay subsidize our drugs

we dont really win

10/31/2006 8:29:52 PM

The government does not regulate the price explicitly. Like Bgm said, the Pharma's are allowed to function as a monopoly.

The exclusive right to function as a monopoly is the "reward" for millions spent on R&D and the creation of a successful drug. Just like each additional copy of Window's costs Microsoft pennies, each additional pill that a Pharma sells costs a fraction of the retail price. The high price comes from the need to recover R&D costs and make a normal profit.

Other countries ignore the US patent and basically steal the R&D from US Pharma's. Consequently, the US finances all R&D for the rest of the world.

Actually, on second thought, this is very comparable to the software industry and utilities where you find natural monopolies - high fixed (initial/R&D)costs with decreasing marginal production costs.

[Edited on October 31, 2006 at 8:37 PM. Reason : ]

[Edited on October 31, 2006 at 8:39 PM. Reason : ]

[Edited on October 31, 2006 at 8:40 PM. Reason : ]

10/31/2006 8:37:27 PM

Quote :

"Other countries ignore the US patent and basically steal the R&D from US Pharma's. Consequently, the US finances all R&D for the rest of the world. "

You were right accept for this. See, pharma has close to perfect price discrimination in that they can charge each market a different price based on their marginal willingness to pay. For poorer countries, they aren't willing (economics treats willing and able the same) to pay high prices for it. They still charge over their marginal costs, which is fractions of a penny per pill, but they don't charge the price they would otherwise charge if they didn't have a market like us picking up the slack in marginal willingness to pay. It isn't the thievery that causes drug prices in other countries to be low, its actually pharma charging different prices in different markets.

Noen, what am I missing here? You seem to think drug companies operate entirely differently than they do.

10/31/2006 8:44:49 PM

^ You're right about that. I get tired of people vilifying Pharma's when, in fact, they generate the same profits as nearly every other company and industry. Same goes for Exxon and Hal.

10/31/2006 8:48:29 PM

I don't blame pharma for it, but if we reimported drugs, they'd be forced to set a world price (or approximately a world price) instead. Humanitarian aid can still subsidize the poorest countries, but we wouldn't get stuck with the whole bill. It would lower our prices some and raise theirs some.

10/31/2006 8:59:08 PM

1) It's not a monopoly when there are multiple independent players. They have patent protection over individual drugs, but that's not a monopoly either.

2) The reason meds are so much cheaper in several other countries has as much to do with their subsidized healthcare systems as it does the pharma companies setting lower sale prices

3) The pharma industry is NOTHING like software. In fact they are semantically and logically completely opposite models.

4) Economically, the pharma companies would, if anything, just set the same rate abroad that they have here for their superstar medications. What possible motivation do they have to LOWER prices anywhere? They won't sell any more with a lower pricepoint, as they have an HMO backed single unit monopoly here, and abroad raising the price to match that would make sense.

It doesn't make ANY sense to lower the price of drugs here, regardless of what is done abroad. Not only that, but this is not as simple as pure economics. You have a lot of legal issues, patent issues, IP rights issues, manufacturing and certification issues among others.

There are a LOT of reasons why the system works the way it does.

Again, this is a capitalist country

11/1/2006 2:23:38 AM

I read some metric somewhere that the majority of new drug development was funded by research grants paid for with tax money anyway, and that big pharma just gorges themselves from this research.

11/1/2006 3:08:53 AM

It's early so I'll start with point 1.

1. Right, the actual firms are not monopolies. They are given monopoly rights to drugs that they develop. Having exclusive rights to produce pill XYZ for 10 years constitutes monopoly power for that drug. There are several empiracal factors that constitute a monopoly - one of those is being able to set a price point well the marginal cost of production.

3. It is very similar to the software industry in regards to decreasing marginal prices of production. Both software and pharma have huge intial costs and then substantially decreasing margnial costs of production.

4. One example: Mexico. Does Mexico have a robust state funded medical program? No. Why are drugs cheap in Mexico?

11/1/2006 6:40:29 AM

Quote :

"It doesn't make ANY sense to lower the price of drugs here, regardless of what is done abroad. Not only that, but this is not as simple as pure economics. You have a lot of legal issues, patent issues, IP rights issues, manufacturing and certification issues among others."

Like it or not, the demand for drugs is not perfectly inelastic. People in the rest of the world won't pay what we pay for healthcare, they will die instead. Thus, the factors of supply and demand would meet at a lower point than in the US.

Sure, the people pay less in some countries due to subsidized healthcare, but the governments pay less due to lower prices pushed by Pharma. Also, it is important to point out that drugs are cheaper everywhere than in the US and it isn't because everywhere has socialized/subsidized healthcare.

Saying there are a lot of legal issues, patent issues, IP rights issues, manufacturing and certification issues (among others) doesn't make it NOT economics, it simply makes it economics on a higher level. I've taken an economic class on intellectual property and monopoly where we dealt with these specific issues.

And the software industry is VERY similar in worldwide operation to the pharma industry in regards to IP status and a marginal cost curve that starts extremely high and drops rapidly to almost nothing. It also enjoys some degree of price discrimination, like pharma.

11/1/2006 7:12:25 AM

Lots of speculation going around ... probably should read a bit to get all of the facts straight:
http://en.wikipedia.org/wiki/Patents
http://en.wikipedia.org/wiki/Drug_companies
http://en.wikipedia.org/wiki/United_States_patent_law

What I'd like to see is a historical analysis of what has happened in the past. My guess (and I could be completely wrong about this) is that this has happened before, the company survived, and life moves on. Why is this being presented as something "new"?

11/1/2006 8:02:02 AM

Quote :

"And the software industry is VERY similar in worldwide operation to the pharma industry in regards to IP status and a marginal cost curve that starts extremely high and drops rapidly to almost nothing. It also enjoys some degree of price discrimination, like pharma."

Software development doesn't necessarily have large upfront costs, especially not of the magnitude experiences in pharma. MAYBE you could make this argument if you only talked about large corporate developers, AKA Microsoft, Oracle, IBM, Motorola etc.

And software has no legal monopoly like drugs. You can patent the implementation of a system, but not the system itself. No only that, the R&D structure is completely different, there's no federal oversight, the end product isn't controlled, users have effective free-choice in the market for alternatives, among other things. The reality in software is everyone is on essentially equal footing. There are no effective barriers to entry in the industry. You can make all the Antitrust/Monopoly arguments you like, but in software, the free market wins in the end.

11/1/2006 10:58:56 AM