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Why do pills cost so much? Blame Canada
The Repository (Canton, OH) ^ | January 22, 2005 | JIM HILLIBISH

Posted on 01/23/2005 4:47:17 AM PST by ResistorSister

It’s called hyperparathyroidism, and many of us dialysis patients eventually must cope with it. It’s important to control it, or painful bone problems will develop.

My doc, after taking all the usual remedial steps, says I need a new drug, the first that alleviates the problem. Fine, write me a script.

“James, you’re not going to want to hear this,” my druggist said.

“It costs $13.35.”

“That’s cheap,” I said.

“Per pill.”

What? That’s $400, per month, for the rest of my life. I could mortgage a house for that, or lease a Cadillac.

I left without them. In the car, it hit me: corporate greed, golden faucets in the drug-company restrooms, executives taking home more in a week than I make in a year.

I had to do something, so I hit the Internet. The greed thing simply did not wash. The company is not exactly rolling in dough. Its stock hasn’t budged for three years. It doesn’t pay a dividend. You could make more money on a bank savings account.

So how did we get to $13.35? More Internet research. I deep scanned the company’s SEC statements and financials.

It’s a new drug with limited potential users. Company officials had to pay for many years of research, liability insurance and field trials and then FDA approval, with zero cash coming in. They have only a few years to sell it at full price before it goes generic.

Now they must sell the pills to countries with socialized medicine where costs are controlled by laws instead of the free market. That’s where the big rub takes place for us.

Americans are picking up the worldwide costs of medications, their development, testing, manufacture and some profit to keep the company in business and employees working. Other countries are not paying their fair share, nowhere close.

It’s insane, but it’s happening with all drugs. Americans are subsidizing the world’s medicine cabinets, rich countries including Canada. Then Canada resells them to us. Neat trick.

What to do? Write your congressman? Let’s pass a law like the others have, cutting prescription prices to affordable prices? Twenty-five cents a pill sounds good.

So Congress does that, and there goes this company and the industry.

(I did check on getting the pills in Canada. That country’s government is close to shutting off the pipeline to the States. They don’t want to knock out the American drug industry. They want to keep their own good deal, and keep us paying for it here).

If the world were a logical place, perhaps these countries would be picking up their fair share of drug prices. Like fun. Governments control prices, not the market. No politician over there ever would increase drug prices just to help us. They prefer to squeeze the fat cats — us. What a surprise.

My case has a silver lining. I have prescription insurance. We called them, and after the sticker shock subsided, they agreed to cover all but $30 a month to keep me walking, mowing the grass and hopefully free from a future of terrible bone pain.

What about the folks not on Medicaid and without insurance? What a scary thought. The $400 would be more than crippling. That’s crippling on their family budgets and crippling on their bodies, too. It’s enough to make even healthy people very sick. My druggist says it’s happening all the time. So far, nobody has a solution, just rhetoric, and we all know what that’s worth.

You can reach Repository New Media Editor Jim Hillibish at (330) 580-8324 or e-mail:

jim.hillibish@cantonrep.com


TOPICS: Business/Economy; Crime/Corruption; US: Ohio
KEYWORDS: canada; healthcare; prescriptiondrugs; socialism; socializedmedicine
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To: beaver fever
You are being disingenuous. Although most of the "PARENT" drug development companies are European, most of the cost of these new drugs-research and regulatory satisfaction is accrued/accomplished in the US. The manufacturing of the new drugs may be done offshore, but that is the least cost intensive part of the new drug introduction cycle.
21 posted on 01/23/2005 5:40:28 AM PST by enigma825
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To: Principled
Yeh, drug co's wouldn't be selling to the socialized countries if they weren't making a profit.

All this rant about the US patients subsidizing Canada and other countries is just more corporate BS. The problem with selling to Canada and other countries is that the companies don't make quite as much of a profit as they do in the US--but they do make a profit or they wouldn't sell to those countries.
22 posted on 01/23/2005 5:41:23 AM PST by TomGuy (America: Best friend or worst enemy. Choose wisely.)
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To: ResistorSister

23 posted on 01/23/2005 5:44:52 AM PST by Reform4Bush
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To: TomGuy
I'd have to disagree or at least as far as I know other than GlaxoSmithKline, AstraZeneca, Novartis, Roche and Aventis they're all generic drug companies. I also recall that all (or most) of the above moved their R&D to the US because there's no price control here.

But here's the question. Is there anyone here who, if they could sell their product in country y for $10 and in country x for $1, both at a profit, wouldn't do it?

I will speculate on one reason why drugs here are so high; there's no free market. I suspect that a large percentage of all American's get all or part of their prescriptions paid for by insurance that's paid for by their employer. Thus they have no concept of what any aspect of medical care costs.

Like withholding tax, if they had to write out a check for the full amount, there would be a free market revolt.

24 posted on 01/23/2005 5:45:04 AM PST by Proud_texan
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To: mewzilla
We invent the drugs down here

No, no no..... only about half... Japan, Israel, India, Germany are big drug producers. Check the home office of many of the major drugs---they aren't US. Also, research and development are much cheaper overseas. US drug co's are selling you a PR line.
25 posted on 01/23/2005 5:46:21 AM PST by TomGuy (America: Best friend or worst enemy. Choose wisely.)
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To: TomGuy
The problem with selling to Canada and other countries is that the companies don't make quite as much of a profit as they do in the US--but they do make a profit or they wouldn't sell to those countries

And the US consumer makes up that difference,(i.e subsidizing canadian consumers.)

26 posted on 01/23/2005 5:46:35 AM PST by Dane (I loath the mainstream media as clinton loathed the military)
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To: Principled
they don't have to sell to anyone below market.

When you have a monopoly there is no "market" price, since without regulation you get to set the price. The question that remains unanswered is the comparison between the selling price and the cost of production, including full cost recovery over some reasonable number of years.

27 posted on 01/23/2005 5:47:15 AM PST by AndyJackson
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To: TomGuy
US drug co's are selling you a PR line.

Not entirely they aren't. And that's the part that ticking me off.

28 posted on 01/23/2005 5:48:42 AM PST by mewzilla (Has CBS retracted the story yet?)
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To: mewzilla
US drug co's are selling you a PR line.

Not entirely they aren't. And that's the part that ticking me off.


Then why have at least 3 major drugs been taken off the market within the last month or so for being dangerous and health risks?
29 posted on 01/23/2005 5:55:07 AM PST by TomGuy (America: Best friend or worst enemy. Choose wisely.)
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To: TomGuy

It happened during the Toon admin. Why do you think?


30 posted on 01/23/2005 5:57:19 AM PST by mewzilla (Has CBS retracted the story yet?)
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To: mewzilla

Their approval occurred during Toon's tenure. I'll bet a lot of drugs got pushed through PDQ.


31 posted on 01/23/2005 5:58:02 AM PST by mewzilla (Has CBS retracted the story yet?)
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To: ResistorSister
Top 10 Ranking by R&D expenditures in 2001. From http://www.p-d-r.com/ranking/Executives_Guide_2002.pdf#search='drug%20sales%20ranking'

1 Pfizer                 4450
2 GlaxoSmithKline        3555
3 AstraZeneca            2655
4 Aventis                2579
5 Merck & Co.            2456
5 Johnson & Johnson      2456
7 Bristol-Myers Squibb   2140
8 Novartis               2130
9 Eli Lilly              2125
10 Pharmacia Corporation 2085

Of these, GlaxoSmithKline, Aventis, and Novartis are headquartered in Europe. Since 2001, Pfizer and Pharmacia have merged. Also Aventis and Sanofi have merged.

Of course, all these are huge multi-national corporations, and the European companies have large US operations and R&D labs. The US companies also have large operations and R&D labs in Europe. The industry has consolidated rapidly over the past few years, with companies on both sides of the Atlantic acquiring each other.

32 posted on 01/23/2005 6:00:40 AM PST by Lessismore
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To: AppyPappy
How many drugs have you researched and produced?

You asked. I doubt if 2004-5 will be less .

"The pharmaceutical industry is one of the most R&D-intensive sectors in Canada. In 2000, Canada's brand-name pharmaceutical industry spent almost $1 billion on R&D. About 20% of this was on basic research conducted in company research facilities as well as across Canada in universities, hospitals and laboratories, and about 65% went to clinical research. In 2001 Canada accounted for 10% of the global new medicines discovered, despite representing only 1.8% of the world pharmaceutical market."

http://www.innovation.gc.ca/gol/innovation/site.nsf/en/in02587.html

33 posted on 01/23/2005 6:01:48 AM PST by Snowyman
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To: Mr. Bird

Indeed, folks want miracle drugs to save their LIVES, for pete's sake, and then they squawk about the cost. Well, what IS your life worth?


34 posted on 01/23/2005 6:02:29 AM PST by AmericanChef
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To: ResistorSister

Hey, look. Some drugs are just too expensive to pay the US price on. If the choice is between buying a foreign drug import at reduced price or not buying the drug at all, I don't see the problem with importation.

Supposedly, the problem comes with substitution - when people buy the foreign versions of drugs they'd buy anyway.

I don't see this as a major problem. The market is just going through an arbitrage phase. There are plenty of foreign and university-based development programs. Buying cheaper drugs from Canada or anywhere else will hardly stop drug development in America or anywhere else. That's something a profiteer would say when he realizes his huge margins are coming under threat.

The government has already shot its credibility on this issue by warning that drugs from Canada might somehow be 'dangerous.' That's pretty funny, I remember living in the Yukon for a bit and taking some Canadian meds, and I'm still alive!


35 posted on 01/23/2005 6:02:53 AM PST by seacapn
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To: Lessismore

Sorry, the figures in the right hand column are in Millions of $.


36 posted on 01/23/2005 6:07:00 AM PST by Lessismore
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To: TomGuy
25% of the cost is to research and development
25% is to distribution and manufacturing
25% is to administration and profit
25% is to advertising

I'm not sure which category sales comes out of? A relative of mine works in a clinic. On many days she does not have to buy lunch because the drug company salesmen bring them free food.

My own physician has expressed annoyance at the drug sales teams wasting his time and the time of his staff. On the other hand, I've also been given free samples on a number of occasions.

37 posted on 01/23/2005 6:13:07 AM PST by Lessismore
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To: beaver fever

"Get used to it America your being ripped off by drug companies half of which are based in Europe."

It is time for We The People to wake up and realize what is really going on here - the drug company/FDA/AMA cartel is doing it to us. Who is responsible? Start with the Rockefellers et al - the money behind the money.

We get high prices for drugs we do not need, but the doctors prescribe them because the drug companies tell them to do so - Viaoxx, Bextra, Celebrex come to mind as examples. These disasters will cost drug companies $100 billion. What they have done with these should result in criminal prosecutions.

Wake up people - they are killing us and making us pay for it.


38 posted on 01/23/2005 6:13:28 AM PST by GGpaX4DumpedTea
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To: TomGuy
Then why have at least 3 major drugs been taken off the market within the last month or so for being dangerous and health risks?

Because the liability lawyers in the U.S. have made it impossible for you to determine your own cost to benefit ratio. Most of these drugs deliver lots of benefit to lots of people, but, in rare cases they cause problems.

The U.S. liability lawyers have sold the soccer moms on the idea that risk can equal zero, so when *any* measurable risk shows up, if the drug doesn't solve a life threatening issue, it has to be taken off the market or the company is bankrupted, no matter how small the risk.

39 posted on 01/23/2005 6:14:18 AM PST by marktwain
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To: seacapn
The government has already shot its credibility on this issue by warning that drugs from Canada might somehow be 'dangerous.'

I'm not sure where the US drugs come from these days. Puerto Rico used to be a big production center, and it probably still is, due to the tax breaks for moving production there.

My guess is that much of the production of higher volume has moved off-shore. I think that India is becoming a big production location.

Lastly, the precursor chemicals are likely to be sourced off-shore, even if the last steps in synthesis are done in the US.

40 posted on 01/23/2005 6:16:18 AM PST by Lessismore
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