Subj : Re: Um...no comment?
To   : Mrproper
From : Deuce
Date : Mon Sep 19 2005 02:40 pm

  Re: Re: Um...no comment?
  By: Mrproper to Deuce on Mon Sep 19 2005 12:21:00

 >  >  > Most of the big pharmceutical companys have the big money for R&D rega
 >  >  > whether sell their drugs at the outrageous prices they do anyway.. as 
 >  >  > most of them get subsides from our government to offer the drugs to th
 >  >  > classes at a lower value anyway.. which some are actually doing now..
 >  >
 >  > Let me just check if I understand what you're saying with this... what I 
 >  > is you saying that even if these companies did NOT sell their products at
 >  > prices considerably higher than the manufacturing costs, they would still
 >  > gobs of cash laying around to develop new drugs.  Then, in support of tha
 >  > view, you say that they would still have this money because the governmen
 >  > paying the difference between the companies price and what the consumer i
 >  > paying... and the company is still recieveing their outrageous price.
 >  >
 >  > Is that a fair summary?
 >  >
 > 
 > yes.. right on the spot.. I don't know how it works in Canada but people her
 > who are on government assistance get their meds at a free or reduced price
 > (some do) and the government does give subsidies to pharm companys for R&D, 
 > sure it's nowhere near the amount it takes to actually do the R&D but for
 > serious diseases etc where a cure is needed fairly quickly the company do ge
 > subsidies.
 > 
 > To sum it up US pharm companies are charging way too much money for their
 > product still.
 > 
 > based on what I've read this is my opinion.

Ok... so now I can pick it apart a bit.  :-)

1) If the government is paying the difference between what the pham charges and
what the consumer is paying, it means the pharn *is* getting their "outrageous
prices".  These government subsidies just ensure they get it.  Given that over
100 drugs are fully developed and tested for every one that goes on the market
(and another thousand or so are quietly buried during animal tests) the R&D
costs are astronomical.  Considering that the only time they can usefully
recoup their R&D costs is during patent protection, they need to charge big
bucks to develop the 1100 odd drugs that don't make it along with the one that
does.  The actual cost of manufacturing the drug is peanuts compared to the R&D
costs which *much* be recouped.  To help lower the price of drugs then, the
government has extended the patent protection on drugs... they now have 20
years to recoup their R&D costs rather than 10 or so.  Regardless of that fact,
specialty drugs are becoming moer and more common... there is a drug that is
used *only* for exactly what you have and then only in around 20% or cases. 
Assuming a 50mil (I'm sure that's low) development cost, and assuming 50,000
cases of what you have per year, that's $50 per case they need to gouge you
just to stay out of the red.  Of course, "staying out of the red" won't keep
your company going... it has to actually make money.  Plus the admin overhead,
distribution, doctor education, etc... now you get to an extra $100 per dose. 
Tack on the $1.50 it costs to manufacture the drug, and you get the high drug
prices explained.

---
 þ Synchronet þ ``Penguins make tasty snacks''

.