Ultra-cheap drugs worry generic makers

AP via yahoo ^ | 6/21/06 | THERESA AGOVINO

[paudio]

NEW YORK - It's a novel approach in the long battle between brand name drugs and their generic rivals: Merck & Co. is slashing the price of its cholesterol drug Zocor so low for one insurance plan that members will actually pay less for the original pills than for the generic.

That tactic has some consumer advocates fearing the practice will spark a movement among Big Pharma, compounding other pressures they fear will weaken the generic industry and compromise the country's source of low-cost drugs.

Under the deal, members of UnitedHealth Group Inc. will pay around $10 for a month's supply of brand name Zocor and $40 for a generic after the drug loses patent protection on Friday. Both Merck and UnitedHealth say the arrangement demonstrates how market competition drives down costs, and that's good for patients.

Consumer advocates typically cheer lower prices but in this instance they worry that a short term benefit for patients will ultimately result in long term problems. They say moves such as Merck's undermine generic companies' chances to generate the profits that fuel their ability to conduct research and challenge drug company patents — eventually resulting in fewer cheap medicines.

[Mase]

When the Abramoff scandal broke, he was thrown out of Cato in disgrace.

Have you ever heard of Milton Friedman? Was he on Abramoff's list too? Do you think he understands the issue?

Why don't you tell us exactly how many of those university professors, the folks at the American Enterprise Institute and those from The Heritage Foundation took money from Abramoff to agree with the obvious conclusions in the letter. Is what they said shortsighted and selfish or is what they said in the letter based on solid conservative economics and a belief that markets will work if given the chance? Would you even know?

Are you a member of the to hell with everyone else, I got mine special interest group? We are the last major market in the world that has not adopted price controls on drugs. Once we do, please explain where the money for research and commercialization will come from to create new generations of drugs. Do you even care?

[Mase]

Yet semiconductor manufacturers have no difficulty making huge profits and funding a steady stream of new designs. They do it because the industry is intensely competitive.

What countries impose price controls on semiconductors? Where in the world are foreign governments telling businesses what they can charge for these chips? If the supply of semiconductors was restricted in a particular country and shortages occurred, would it become a political issue? How about with the drugs that save lives and improve the quality of life? Would shortages of drugs or affordability issues present a political problem? Would govenrnments violate intellectual property rights to ensure their people received the drugs they need? Of course they would. You're not making a fair comparison.

[nurees]

Absolutely false. There are ranges but they are tight plus you need to be bioequivalent to the brand plus meet the set standards for safety and efficacy.