Posted on 02/08/2017 12:09:22 AM PST by Fedora
>>So gee, why are drugs so damned expensive????
Observe the symbiotic relationship between:
Insurance, who invests in Pharma, who invest in Doctors, who prescribe products to the insured cash-cattle, whose retirement saving are invested in Insurance...
You forgot the amount of research money to develop a drug. If 100 different formulations are proposed 80 make it to first level testing, 30 to human trials, and 5 to market. Each of those have their own set of research teams for the timeframe in which they operate that have to be paid for.
Recapturing the R&D expense is done in every other industry, but the failure rates are lower and often recoverable through rework - circuit boards for example switching out components - that can’t be done with pharma.
The cost issue comes down to people using production cost to make a specific unit of pill or dose, instead of total cost to develop and deliver - which also includes all the additional items you covered.
The problem with pharma is that we have a managed market in which the US consumer is playing the sucker.
Big Pharma also pushes the idea that the solution to all your problems can be found in a plastic orange bottle with a white top.
The government provides patents to pharmaceutical companies. The patent is a legal monopoly, usually lasting 20 years. Economic theory indicates that a monopolist will set a higher price than would be the case in a more competitive market structure.
What happens if someone “cheats” and copies and produces a patented drug? The government will conduct a raid, seize assets, arrest people, and probably kill anyone who makes any effort to resist. It’s really the government that is responsible for high drug prices.
I remember when Democrats were on the war path and threatened the “evil” drug companies with price controls. Remember, it is the government that is responsible for the high drug prices. Politicians shouldn’t blame the companies; they should blame themselves. Maybe legislators should change the laws on drug patents.
First though, let’s appreciate that the patent system was done on purpose. The rationale is to provide companies (including drug companies) with an incentive to pay for research and development.
Monopoly profits may also pay for hand-holding at the FDA, reassuring the press, and payola to politicians. If an FDA approved drug kills your mother, the press will be reassured that this is a rare case and further research is being done to make this wonder drug even safer. And besides, didn’t your mother read the warning label?
Instead of granting a 20 year monopoly, the government could grant a 10 year monopoly. Or the government could manage a deal where a generic producer pays a pharmaceutical developer for the immediate right to co-produce a drug (a duopoly rather than a monopoly) for 20 years. The main thing to realize is the patent system, good or bad, is a creation of government.
Patent drugs receive competition from supplements. Some people believe in the supplement route and some do not. But in the marketplace there is competition and I think it is on the rise. Naturally drug companies don’t like this.
Supplement companies periodically get in a tizzy over proposed legislation. The Durbin bill, The Reid bill are examples. These bills require supplement makers to do all the R&D etc. as the pharmaceutical companies. That sounds fair, but it isn’t. Drug companies get patents and monopoly profits. That does not apply to supplements. You can not patent mother nature. The supplement makers fret that these proposed bills, if they were to become law, would put them out of business.
Reid and Durbin are big time Democrats. The Democrats have gone from being the scourge of the drug companies to being their best friends. What happened? I’ve always suspected that question could be answered in one word: payola.
This thread is great if only that it, for some reason unknown, brought many old school FReepers out of the woodwork.
I’m glad you’re all alive! Cringing Negativism, shout out!
YES! Stop the damn pharmaceutical commercials. And while we’re at it get rid of all the ambulance chasing attorney commercials as well.
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