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Wesley Clark
01-18-2004, 12:43 AM
I remember the FDA was/is a big opponent of purchasing drugs from Canada by saying that some of them were fake. im sure some were but a small risk of fake medicines is better than no medicine if you're poor. now i read this report

FDA: Generics Cost Less Than Canadian Meds

http://story.news.yahoo.com/news?tmpl=story&cid=542&ncid=751&e=3&u=/ap/20040117/ap_on_go_ca_st_pe/generic_drugs

It seems like the FDA is trying to encourage the US public to continue to purchase drugs from US pharmacies. Why is this? am i seeing things or is the FDA financially tied to encouraging the purchase of pharmaceuticals from US companies.

friedo
01-18-2004, 07:42 AM
The FDA's mandate is to regulate food and drugs. Their regulatory jurisdiction does not extend beyond US borders. It makes sense for them to encourage people to only use drugs that have withstood their scrutiny.

Most generic drugs are manufactured oversees and imported, BTW. But in order to be sold in the US they have to be approved by the FDA.

Early Out
01-18-2004, 08:34 AM
...is the FDA financially tied to encouraging the purchase of pharmaceuticals from US companies.While friedo is essentially correct, there is some element of self-interest involved. Out of FDA's FY2004 budget of $1.7 billion, $300 million comes from "user fees," which I have to assume represents payments by companies that are regulated by the FDA (they don't appear to be charging us consumers for what they do).

There's also a phenomenon seen in many regulatory agencies in which the regulators, because they deal with the regulated folks every day, begin to identify with the people they're regulating. They become colleagues and friends, so the regulators are more inclined to be receptive to industry's viewpoints. It's almost unavoidable.

if6was9
01-18-2004, 12:13 PM
Ya think????? :rolleyes: Let's see.... drugs cost 10 times as much in the US as anywhere else in the world (a guess, but probably not too far off...) It's probably because of...... shipping costs....... or something.

Wesley Clark
01-18-2004, 02:47 PM
Ya think????? :rolleyes: Let's see.... drugs cost 10 times as much in the US as anywhere else in the world (a guess, but probably not too far off...) It's probably because of...... shipping costs....... or something.

:) Glad you could help. For the record the main reasons costs are higher here is other countries buy in bulk and their governments negotiate lower costs for drugs.

However i dont know what concrete benefits the FDA stands to gain by encouraging US citizens to buy drugs in the US. Thats what im asking, the FDA is supposed to be a regulatory agency, how would they benefit from drugs being bought in the US as opposed to Canada.

curly chick
01-19-2004, 06:10 AM
:) However I dont know what concrete benefits the FDA stands to gain by encouraging US citizens to buy drugs in the US. Thats what im asking, the FDA is supposed to be a regulatory agency, how would they benefit from drugs being bought in the US as opposed to Canada.

I don't understand that at all. The FDA audits manufacturing sites all over the world where drugs are made for the American market.
So even if you have drugs on sale in America which were made in Canada, Ireland, India or the moon, the FDA have been to the factory to audit the manufacturing process. If a drug is on sale in America, the FDA has to have approved it.

The only reason I can think of is that maybe the FDA is being patriotic and wants you to buy products which were made by Americans, rather than foreigners. Maybe the FDA wants to promote keeping the pharmaceutical industry jobs in America.
Or maybe the auditors are just sick and tired of all the foreign travel!

Omphaloskeptic
01-19-2004, 02:54 PM
Ya think????? :rolleyes: Let's see.... drugs cost 10 times as much in the US as anywhere else in the world (a guess, but probably not too far off...) It's probably because of...... shipping costs....... or something.
Worldwide drug pricing has become a complicated political issue. I don't know how much of the price of drugs is from unjustly high profits (so I won't talk about that), but there's a lot more to it than that.

Drugs are similar to computer software in having a high fixed cost (the cost of all the research to decide which drug to make, or the programming and debugging to write the software) and a low marginal cost (the actual synthesis of the drug once its structure is known, or copying the CDs). This is a somewhat uncomfortable position for a company to be in, because it means that it is relatively easy for an unscrupulous competitor to sell cheap knock-offs. This is what patents and copyrights are for, of course. But some countries, trying to deal with the high costs of new drugs, have threatened to reduce drug patent protections or buy from countries with reduced protections, as a bargaining chip when negotiating prices. Since this would make it possible for generic drug companies to produce low-cost versions (remember, the marginal costs are low) of expensive patented drugs, undercutting the name-brand versions, they don't have much choice but to give in. So a lot of countries get drugs at low cost, and the rest are paying for all of the R&D expenses.

This guy (http://www.corante.com/pipeline/) (Derek Lowe) has a lot of interesting articles on the drug pricing/reimportation issues, as well as on drug research more generally. He's works in the industry, so he may have a bias, but I think he's reasonably fair. Addressing the OP: he also thinks the "drug safety" issue is pretty silly. He's much more concerned about the effects of reimportation on R&D budgets. If everyone buys generic (or marginal-cost priced) reimports from other countries, the drug companies that actually do the research to make new drugs won't have any more money to do R&D. No new drugs anymore, sorry!

UncleBeer
01-19-2004, 05:33 PM
I'm sending this thread over to GD. If the hamsters cooperate, that is.

KP
01-19-2004, 06:40 PM
If everyone buys generic (or marginal-cost priced) reimports from other countries, the drug companies that actually do the research to make new drugs won't have any more money to do R&D. No new drugs anymore, sorry!
I'd be more inclined to believe that if their R&D budgets were more than a small fraction of their marketing budgets.

I'm the target of many a drug rep (and a friend of more - a surprising number of my more photogenic and charming med school classmates were former drug reps), a former technician in drug R&D and "education" (just another marketing division), and the secondary target of all those expensive prime time TV ads that urged people to "ask their doctors if Sarin(tm) is right for you" without mentioning what kind of drug Sarin(tm) actually was... in short, I've glimpsed the pharmaceutical companies from many sides, and have a deep personal fondness for several of them (well, before the megamergers, anyway), but I still feel the "if anything cuts our profits, we won't be able to do research" party line is the most cynical lie since the tobacco hearings.

They might as well put a gun to a puppy's head, all the while decrying "what we might force them to do".

I have hundreds of articles where companies cynically brag on the record about marketing triumphing over good patient care.
Here's a excerpt from a from the BMJ (http://bmj.bmjjournals.com/cgi/content/full/326/7381/170/DC1) (British Medical Journal) article:

"Kevin Brode, vice president of sales and marketing at marketRx, a firm that provides strategic marketing information to the pharmaceutical industry, isn’t too worried about who the winner will be. "Doctors say they’ll change their prescribing habits after a negative study," he said, "but their prescription behaviour tends not to bear this out."

Why not? "The reality is no one promotes a diuretic," said Mr Brode. "So you’ve got one study that says yes, you should [use a diuretic], then starting the day after, you’ve got a $10bn [£6.2bn;€9.5bn] industry. . . and 55 promotional events . . . for an ACE inhibitor coming back in and saying ‘Here’s why my ACE inhibitor is safe and here’s why you should be using this.’ I mean, it’s promotion. Can ALLHAT stand up to that?"
I can tell you firsthand that even most of what they list as "R&D expenses" is just marketing

They fund hundreds of studies, knowing that a handful will be statistical outliers that "show" their new variation is better in some picayune way than the older one that's going out of patent protection, or simply doesn't command a premium anymore.
They make funded researchers sign agreements not to reveal any data without their written approval, so doctors never see the 95%+ of the studies that tell you an older, non-proprietary, or established drug is much better.
I've had drug reps present me with thick stock glossy presentations showing that a certain cardiac medicine is superior for some of my sickest heart patients. I requested reprints of the studies cited. They turned out to be unpublished studies of 6-12 patientss with p-values as high as .52. The p-value is a statistical measure of how likely a result is to be false. Reputable journals demand a p-value of .05 (5% or less chance the study is wrong) or less. I hadn't even realized a p-value could go over 50%, but this study, which according to it's own results, had a 52% chance of being wrong, was being used to tout this drug for a specific use, where the established drug would save more lives. That's pretty cynical!
"R&D expenses" include wining, dining, and junketing researchers to "build relationships in academic and clinical communities; etc. No matter how well intentioned a physician or scientist is, study after study has shown that their choices are markedly affected by such 'symposia' and 'relationships'


I could go on and on, but I've ranted enough. The bottom line is:
a) by their own numbers, they spend more on expensive marketing than R&D
b) Only a fraction of what they budget for R&D is actually spent discovering and developing new drugs
c) Most R&D dollars are spent researching "excuses" for drug variants. They slightly modify an existing drug, (add a methyl group or something), test it for human toxicity and side effects, and then try and find some excuse to market it. It's cheaper/more profitable than 'genuine' drug research.

Omphaloskeptic
01-19-2004, 10:00 PM
I'd be more inclined to believe that if their R&D budgets were more than a small fraction of their marketing budgets. [rant elided]I agree with this (though I don't know the actual numbers; pointers to data would be appreciated) and I find, for example, the content-free drug ads to be extremely annoying wastes of money. But... at least they have R&D budgets. If R&D is such a trivial thing to do and such a (relatively) small cost, why aren't more companies doing it--where is the barrier to entry for a small, low-overhead company full of researchers, or an existing generics company, to make lots of money on drug patents? (Or are they out there? Do they just get swallowed by a big company? Maybe I just haven't heard about it. I don't know a whole lot about this.)

occ
01-20-2004, 02:07 PM
Ya think????? :rolleyes: Let's see.... drugs cost 10 times as much in the US as anywhere else in the world (a guess, but probably not too far off...) It's probably because of...... shipping costs....... or something.

Actually, if you want to simplify what is a very complicated situation, most of it comes down to:

(1) The FDA is much stricter than the equivilent agencies in other countries with regards to approving pharmaceuticals. It takes years, millions upon millions of dollars, and countless research studies to win approval for a new drug. These costs are reflected in drug prices.

and

(2) US consumers subsidize drug costs in other parts of the world. A pharmaceutical company which sells to, say, the US, Canada, and Mexico will have much higher prices in the US, largely because they cannot charge as much in Canada and Mexico. The reasons for this are detailed by others in this thread, but needless to say, US drug prices are artificially high because other countries' drug costs are artificially low, and R&D costs need to be made somewhere.

rjung
01-20-2004, 03:42 PM
I could'a sworn I read that the Veterans' Association gets to buy drugs from Canada without any problems. Is that true?

erislover
01-21-2004, 06:51 PM
The FDA is much stricter than the equivilent agencies in other countries with regards to approving pharmaceuticals. It takes years, millions upon millions of dollars, and countless research studies to win approval for a new drug. These costs are reflected in drug prices.Five years, probably more than "millions", damn straight, and no they aren't. Currently, there is no direct link between research spending and the amount of new patents granted, other than in the degenerate sense of "you can't win if you don't play"... some money has to be spent.
(2) US consumers subsidize drug costs in other parts of the world. This is a line that will actually be fairly difficult to support. Pharmas make a lot of money here and abroad. There is research going on in welfare states and the US, and everywhere inbetween (say, Canada). The companies still make money by selling their drugs to countries with nationalized medicine, and their patents are applicable in Europe as well as America. Research is expensive, I agree. But my interactions with the pharmaceutical companies (I manufacture and service instrumentation for their research) indicates that it isn't all about getting FDA approval or finding drugs. Significant resources are diverted to finding ways to obtain reformulation patents so that they may effectively extend existing patents on certain drugs.

The motivation behind this isn't just greed per se. The short story is that big pharmas don't release five or six drugs every other year, even though their research is constant. They find one or two and reap the benefits of those as long as they can and hope that they can find another drug in the meantime. They don't always. A year or so ago, IIRC, DuPont sold to Bristol Meyers Squibb. They left the business. Either it wasn't the cash cow they'd hoped, or that division actually went under (I don't know which, actually, though there was a doper working there who might know, I don't know if he still posts here). Purdue is in some trouble right now, a patent it thought it would maintain on OxyContin didn't take, and the company is scrambling. This isn't a small company we're talking about that rents office space. They spend big bucks on research, and this one patent is completely affecting their company.

Sam Stone
01-21-2004, 08:34 PM
There's also a phenomenon seen in many regulatory agencies in which the regulators, because they deal with the regulated folks every day, begin to identify with the people they're regulating. They become colleagues and friends, so the regulators are more inclined to be receptive to industry's viewpoints. It's almost unavoidable.


This is known as "Regulatory Capture", and it's a little-discussed but very important limitation on the ability of government to regulate business without being co-opted.

The problem is this: The public clamors for regulation of some industry. Government agrees, and sets up regulatory agency. The public is satisfied, and turns its attention elsewhere. In the meantime, the industry being regulated now has great incentive to influence the government. It hires lobbyists, contributes to political campaigns, sponsors think-tanks, etc. Over time, the regulatory agency becomes a tool the industry uses to give itself the power of government.

DSeid
01-22-2004, 07:41 AM
Drug prices have little to do with costs, either of R&D or of manufacture or of marketing. It is price point and what the market will bear. In a world where consumers either aren't paying the price directly for more expensive choices or do not have adequate information to make the choice then there is no reason to price competitively. And we docs are notoriously bad at considering the monetary costs of our decisions. Or at self-regulating ourselves from accepting the dinners and dodads from the reps ("Oh, I don't let it influence my choices" ... not explicitly maybe, but it does)

But the FDA, I think, just doesn't want to be marginalized.