Posted on 06/21/2006 4:49:02 PM PDT by 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.
(Excerpt) Read more at news.yahoo.com ...
Yes, that's how markets are supposed to work. Markets don't work when government forces manufacturers to sell products at a price that they determine. In the case of pharmaceuticals, there is no market like in your book example - only government interference. Coercion creates a false economy. Why you would support this boggles the mind.
You will sometimes see American textbooks appearing in discount bookstores, marked "For sale in Canada only", because that condition was a part of the sales deal between the American publisher and a Canadian distributor.
You mean the government didn't force them to lower the prices of the books? They did this on their own, without government interference, to meet the demands of the market?
What's different about the drug companies is they, and they alone, get US government help in enforcing their sales agreements in foreign countries.
Hollywood and software makers get no help from the government to protect their intellectual property? How about the agriculture industry? If foreign governments imposed price restrictions on Microsoft, Hollywood or American Ag products, and then countries resold those products to other countries, you can be assured that our government would come to their aid. I'd rather our government force others to drop all price controls but life saving drugs are much more politically charged than software or movies. At least our government has the smarts, unlike yourself, to understand what drives the innovation pipeline and work to protect it.
It's specifically illegal in the US to have your prescriptions filled in other countries
Yes, it is. But there are many reasons for this that relate to consumer protection and not just the protection of manufacturers.
You seem to feel that pharma companies have some sort of special moral right in making Americans bend over and take this monopoly pricing scheme
No, I just don't believe that government has the right to tell a business how much they can charge for their product. To argue that they do is the opposite of everything conservatives believe in. I also believe that governments should be held accountable for enforcing the agreements they make. If they don't then our government should do everything in their power to enforce the rule of law.
The drug companies are not powerless in all this. Witness their response to Canada's unwillingness to enforce the law. They just told Canada they'd limit the amount of the drugs sold to Canada if they didn't stop re-importation. The Canadian government, faced with a shortfall of drugs for their own people, readily agreed to begin enforcing the law. When there isn't that much profit to lose, the drug companies can play hardball with the parasitic countries that violate their agreements.
I take great pride in dealing with your "parasitic countries" whenever I can.
So you support government being able to tell businesses how much they can charge for their products? Are you sure then you're a member of the right forum?
In an era when they can send my job to India whenever they feel like it, why don't I have the same right to outsource my prescription purchases?
Is that what this is really all about? I love the moral equivalence argument. It is so effective at exposing the ignorant among us. If you have your way the drug makers will just stop the R&D pipeline and drive profits from existing drugs. When the pipeline dries up the fools who argued for controlled profit of the drug makers will demand that research be done in the name of the state. And all good socialists understand that the most effective method for utilizing resources to promote innovation comes from government, right? LOL!!
Your prescription for dealing with this is perfect for ensuring that all new drug innovation dies. Kind of a weird conclusion for someone on a conservative forum who pretends to know something about this industry, don't you think?
Don't twist my words. I have nothing against companies pricing differentially in various countries. It's just that I also support the right of consumers to shop wherever they want for bargains. Whereas I think government should stay out of BOTH sides of this market, you want it to come down in aid of the side you favor.
Hollywood and software makers get no help from the government to protect their intellectual property?
Manufacturing drugs in infringement of patents is a whole different issue. The whole patent mess, and the complicity of government, in allowing patent protection on vague claims is a whole debate in itself, but a different debate. This one is about the special ability of drug companies to get government help in enforcing differential pricing. I buy drugs overseas; I don't have the equipment in my garage for making my own Lipitor.
You mean the government didn't force them to lower the prices of the books? They did this on their own, without government interference, to meet the demands of the market?
No, this was a pure free-market operation: the textbook company sold books cheaper to Canadians, perhaps printing them there if that saves money. Pharma companies are never forced to sell to Canada either, even though it does control domestic drug prices; if suppliers feel that the government offers them too little for a product, they can just choose not to sell it in Canada. In 57% of all cases, they do exactly that. The drugs you can buy from Canadian pharmacies represent the other 43%.
Yes, it is. But there are many reasons for this that relate to consumer protection and not just the protection of manufacturers.
"Protection of consumers!" Tell me another funny one. Canada, Europe and Japan have the same drug-quality standards we do. In other countries, you pay your money and take your chances. Around here we do a lot of dealing with a relatively small number of Mexican suppliers, who are aware that only if they supply us with the genuine stuff will we keep coming back. Retirement communities around here actually run bus tours for senior drug buyers. You don't want to mess with gold-plated repeat business like that.
So you support government being able to tell businesses how much they can charge for their products? Are you sure then you're a member of the right forum?
I support government staying out of both sides of the market decision. Let pharma companies sell wherever they can make the best deals, and let consumers buy wherever they can cut the best deals. That's all I ask.
Duh. Generics don't do research. That's why they can make cheap drugs. They don't have to recover R&D costs. They are leeches living off of the expensive research and risks taken by others.
The pharmacy probably makes much more profit from the generic than the brand name. It's usually to their advantage to push the generic.
Why are these patent expirations continually getting litigated? It should be crystal clear from the date on the patent when it because public domain. Do judges get wiggle room to extend them a little or a lot?
because => becomes
They don't "push" the generic. Aetna does. Much higher co-pays for brand names; and more and more brand names are not even covered.
The interesting thing to know, is how much is Aetna paying the pharmacy in addition to my $20 co-pay, for the generic? IOW, how much is Walgreens making on the drug when I purchase it with insurance coverage, compared to when it is purchased with out insurance coverage? It is obvious that Aetna is not paying over $200 on top of my co-pay.
The pharmacist did tell me that on some drugs, in order to keep the contract with big insurers like Aetna, they have to accept less than their cost. Thus, in order to make a profit on such drugs, the drugstore must charge even higher prices to the uninsured. So, the uninsured are in a fashion subsidizing the cost of drugs for the insured.
Mr. Angell must really hate the drug makers because he's saying things that make no sense. Emotion tends to do that. If the drug companies spend more than 20% of revenue on R&D (proven in post #41) then 2.5 times that would be 50% of revenue. So according to this guy, marketing, administration and R&D alone eat up 70% of the drug makers' gross revenue. Now, manufacturing overhead in the drug business is very costly and averages about 35% of revenue. According to this idiot, the drug companies are losing 5% on ever sale they make before costs for selling, utilities, insurance and interest - among other expenses are even considered. This is utter nonsense! Your source wouldn't be Public Citizen, would it?
At least a third of the drugs marketed by industry leaders were discovered by universities or small biotech companies, writes Angell, but theyre sold to the public at inflated prices.
Angell has no idea how the relationship between universities, NIH, NSF and private industry work. The public sector has always done much of the basic research and then they turn it over to the private sector to do the necessary applied research that translates research into products. If the basic research is not being done in the public sector or, if the research being done is not high caliber, then private industry will do it themselves. Universities are continuously patenting their discoveries and licensing it to private industry for commercialization. This complaint is just stupid.
The company agreed to pay the NIH only 0.5 percent in royalties for the drug.
What were the costs of the applied research and the costs of taking this product to market? He conveniently ignores this. The NIH agreed to accept this amount, not the other way around. Bristol-Myers Squibb wasn't the only company they negotiated with.
Of the seventy-eight drugs approved by the FDA in 2002, only seventeen contained new active ingredients, and only seven of these were classified by the FDA as improvements over older drugs. The other seventy-one drugs approved that year were variations of old drugs or deemed no better than drugs already on the market. In other words, they were me-too drugs.
So what? Why this surprises anyone is beyond me. The generic business is going gangbusters. All generic drugs have to be approved by the FDA. That's what's happening here. He's considering generics as me-too drugs. This is much ado about nothing and I don't understand the point you were trying to make - if you were even trying to make one.
But Nexium didn't bring a new antibiotic on the market, it simply combined and antibiotic with Prilosec
The reason I know about these drugs is that I suffered from chronic acid reflux for almost five years and was at risk for developing esophageal cancer. Prilosec would control the acid but the doctors had nothing available to repair the damage. Nexium repaired the damage and I no longer worry about contracting this cancer that is becoming far too common.
Even you must admit that the possibility of a doctor prescribing a generic version of Prilosec with an antibiotic, is hardly a patent rights issue.
But Astra did it when no one else would or knew to do it. They absolutely deserve patent protection. This drug is saving lives and dramatically improving lives.
But that brings us to still another issue - lawsuits. Drug companies LOVE to sue eachother.
Drug companies LOVE to sue eachother? That's just absurd. The reason this happens is because the patent office is in terrible shape. They've allowed for conflicting patents and they are undisciplined and understaffed. They used to have experts in every area they managed but now it's just a mess.
Prove it. Some companies that you assume are American, are not. (I can assert that with confidence because of the statement above)
Good grief. Did you even bother to read what I posted before jerking your knee? I said that nearly 90% of all new drugs are discovered in the U.S. That doesn't mean American companies are doing all the discovering; it just means that the world's R&D is, for the most part, located right here in the good ol' USA. The reasons are obvious to me because I understand the industry and what drives it. Let me know if you'd like me to list those reasons for you.
I beg todiffer on the generic R&D. I am in the generic pharma industry in business development and I will tell you thatfor a generic company to come out with a "me too" drug is costly. When you look at the pharmokinetic studies, clinical studies and formulating hours you are in the Millions of dollars. One clinical trial we are working on now is costing nearly $4M and there is no guarantee of success. That does not count the initial deformulation and reformulation work.
Let me further give an example of the generic market and its pricing structure. Say my company is lucky enough to be the first one to market with a generic once the brands patent expires, we have only a very short time to make our money back before (and this is true with one of our drugs) 5 other competitors enter the market, all of who have had similar development costs. We sell to CVS for say $30 a box. Competitor one comes in at a responsible $28. Competitor 3 comes in at $5.00 because theywant market share. All of a sudden the market price drops but this price is only the price to thechain or wholesaler. CVS is still out there selling the product for $100 a box.
You have no idea how many scams the chains and wholesalers have on these drug programs. One chain may ask for 6 months of free goods, others want you to rebate back a set % to them monthly or you do not remain in their preferred contract, I have even seen where they buy in large amounts of inventory to meet their Wall Street numbers only to return the product to the manufacturer almost immediately.
I don't mean to pontificate but I am sick of hearing about the nasty pharma companies driving up prices when the drug wholesalers and chains should be investigated for gouging their customers and suppliers. Tell me why when something is being sold to a chain for $1.00 and then marked up to $50 that the drug companies get the rap?
Then why would you say something so ridiculous? I'm not familiar with Cuba's biotech patents but I'd bet heavily that they offer little that can actually come to market and improve lives. Even if they did, why is Castro spending money this way while his people remain so destitute and hopeless that they try to cross the Florida straits on pieces of plywood?
DeVinci was a pretty innovative guy and yet profited little from his research. What drove him? Nicola Tessla was one of the greatest minds of the last century and responsible for many of the inventions and discoveries that make our life, as we know it today
There is a lot of talent out there that is motivated by many things other than money. My point is that without capital, these dedicated researchers and inventors will not have labs, paychecks or access to clinical trials nor will any of their discoveries ever become products. You see, people who invest their money in the work these folks do, do so to realize a profit. These guys you mention had sponsors. We don't live like that anymore, thank goodness. Now, capital flows to those who will innovate products and services that people want and need. That flow of capital is (and should be) determined by the opportunity to earn a profit.
Where profit is the motivating force, mediocrity reigns.
Without profit, nothing reigns.
Without a passion for discovery that is separate from profit, there is no innovation.
Maybe you should spend more time with entrepreneurs. They are most definitely passionate people but they are most certainly motivated by profit. Whenever the profit incentive is missing, the probability that people's wants can be safely ignored is the greatest. Take a poll sometime and ask people which services they are most satisfied with and which ones they are most dissatisfied with. For profit organizations will dominate the first list while non-profit organizations will dominate the latter.
As a boss I had years ago used to say, "hide and watch".
Hide? Why doesn't that surprise me?
and he understood capitalism and free markets VERY WELL.
I believe he understands them very well. I don't believe he practices them as well. Either way, they will not be an innovator of drugs anytime in the near future.
Nine posts on this thread and you've still contributed absolutely nothing. Well done!
Somebody beat you to it. I think his name was Karl something or other.
The Russians at one time led the world in classical genetics so it's not surprising that they would have pioneered work with phages. Not all bacteria are attacked by phages. Some are resistant. Some mutate to become resistant. The battle is ongoing. The Soviets however, were never pioneers of new drugs. Not then. Not now.
What will Canada do when Americans cease crossing the border for cheaper medications?
The pioneering drug companies have all banded together to target the generics and drive them out of business. They've joined forces with the FDA, the AMA and the CFR to make this happen. Once they've eliminated all competition they'll raise prices and only make drugs that keep us sick, instead of healing us, so we need more drugs and additional visits to the doctor. The doctors and drug companies will keep us alive only until they've taken all our money and we're no use to them anymore. Jerome Corsi said so. Buy MRK!
You only have to prove that your generic is the same as the original. You did not have to bear the cost of research and development, the cost of discovered drugs that failed along the development path, and the cost of proving that the new drug is safe and efficacious. That's why the new drugs get patent protection; otherwise, why look for new drugs?
This ought to be posted on that web site where they state that the Twin Towers was a controlled demolition, that a missile actually hit the Pentagon, and that the Mother Ship was hiding in the tail of the Hale-Bopp Comet.
Good point, and it reinforces the need for consumers' right to use the power of the Internet to shop around. From the consumer's retail point of view, New Zealand happens to offer the best deals right now, but just as with the market for shoes or memory chips, this can change at any moment. We have no business allowing medicine to go on being a trade-protected industry.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.