Interesting take on mswas’ theory here: looks like most of the money being spend on R&D by US drugmakers isn’t actually doing anyone any good, anyway.
If it really is true that we subsidize low costs for the rest of the world by paying high drug prices here, then that certainly isn’t fair either. I’m not saying I can vouch for the veracity of that premise, but if it’s the only way we can get the reactionaries to even consider that our system needs to be changed, than that’s something.
Good thing it’s not true, huh?
I don’t think anyone has said that we (United Statesians) don’t deserve low drug prices. Nor has anyone asserted that the Canadians’ access to them is based on what Canadians deserve.
It’s a matter of what the Canadians negotiate (or mandate, if you feel you must put it in those terms), and what the United Statesians don’t that results in the difference.
CAN they jack up those prices, though? ISTM that if they had the ability to jack up the prices elsewhere, their fiduciary duty to their shareholders would demand that they do it, whether the prices paid by Americans go down, or whether they don’t.
The shareholders should really revolt against the boards of directors of the pharmaceutical companies for being so irresponsibly altruistic.
It appears to have been in an editorial in Investors Business Daily, dated July 31, 2009. It has been sanitized (see Editor’s Note).
OK - there are two sides to the supply / demand curve. If the US starts paying less for drugs by reimporting from Canada, all things being equal (the great assumption of all economists), that should shift the Supply curve. This will create a new intersection of S&D at the new global P (price point).
Now - how would a drop in total drug Supply look? Probably by a reduction in R&D towards new drugs. Drugs already developed have a low manufacturing cost - most of the cost is in development.
Finally - profit margins. Here are some numbers for thought from Q2. :
http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=AAPL%3AUS&sid=ajXjK.suuCCQ
I eyeballed the list for those with margins over 20% in Q2. Medical seemed to do well earlier this year, but there are plenty others on the list:
7/30 MA Mastercard Inc 27.27
8/3 TAP Molson Coors Brewing Co 23.44
7/27 AMGN Amgen Inc 34.18
7/21 KO Coca-Cola Co/The 24.64
7/16 GOOG Google Inc 26.88
7/23 WYE Wyeth 22.34
7/22 LLY Eli Lilly & Co 21.89
7/27 LO Lorillard Inc 27.69
7/23 FLIR FLIR Systems Inc 20.02
7/30 SWN Southwestern Energy Co 25.36
7/23 CELG Celgene Corp 22.72
7/14 JNJ Johnson & Johnson 21.05
7/21 FRX Forest Laboratories Inc 26.40
7/21 GILD Gilead Sciences Inc 34.69
7/22 ISRG Intuitive Surgical Inc 23.94
How interesting. This might be exactly what I need.*
Should I ask my gynecologist, orthodontist, or phrenologist?
*I only have access to American TV via satellite. I find it amusing that a lot of pharma-ads don’t even say what the drug is for, leaving me really baffled and confused. Perhaps I need some drug to treat my confusion.
Ask ‘em all. Can’t have too much Gleemonex, and anyone who says otherwise is itchin’ for a fight.
We Canadians deserve low drug prices because we are inherently superior. You Americans do not because you are not. Either that, or it is because we chose not to let the drug companies ream us, whereas you do out of an irrational fear of teh socialism.
And I am enjoying observing you convince yourself that we are fucking you in the ass. Bend over, my little southern colon(y).
What is truly delightful about the re-import scheme is the markup that Canada would place on drugs being exported to American customers. Please pass the lube, eh.
If the USA is paying X for a drug in the USA, one must assume that Canada would charge X when selling that drug in the USA, essentially shifting part of the profits from the drug companies to Canada. That would not help the USA at all. Thinking that Canada would pass on its hard earned savings to the USA is extremely naïve.
If such a scheme were to disrupt the supply or the pricing of drugs in Canada, then Canada would force the drug companies to comply by threatening to weaken patent protection, or simply prohibit drug export to the USA (other than Mary Jane export, of course).
You know, I can honestly say that was the topic of my very first economics lecture in university, which is a depressingly long time ago…and yet even I still remember that the lecture went on to state that supply/demand theory requires a perfect market for P to be non-distorted.
So unless you’re making the claim that pharmaceuticals are an example of a competitive market (despite the highcost to entry, imperfect information, few sellers, inhomogeneous product, etc), your argument that changing market conditions in one territory will lead to a new global price point is false.
Well, I could nitpick about q2 figures rather than using something more meaningful, such as year on year trends, but what the hell, let’s go with your numbers and highlight the pharmas, shall we:
7/30 MA Mastercard Inc 27.27
8/3 TAP Molson Coors Brewing Co 23.44
7/27 AMGN Amgen Inc 34.18
7/21 KO Coca-Cola Co/The 24.64
7/16 GOOG Google Inc 26.88
7/23 WYE Wyeth 22.34
** 7/22 LLY Eli Lilly & Co 21.89**
7/27 LO Lorillard Inc 27.69
7/23 FLIR FLIR Systems Inc 20.02
7/30 SWN Southwestern Energy Co 25.36
** 7/23 CELG Celgene Corp 22.72 **
** 7/14 JNJ Johnson & Johnson 21.05**
** 7/21 FRX Forest Laboratories Inc 26.40 **
** 7/21 GILD Gilead Sciences Inc 34.69**
7/22 ISRG Intuitive Surgical Inc 23.94
Out of your list of 15 companies, we have 7 pharmaceutical companies. Care to tell me what other industry is even close to as well represented? And we’re talking rank and file industry members earning these sort of percentages, not the like of Mastercard, Coca Cola, Google, the the dominant 800lb gorillas of their sectors.
Oh, and as already cited, the r&d expenditure of drugs is much lower than the marketing budget.
Muffin that was a great reply, kudos!
You win the thread!
I love that Molson Coors’ ticker is TAP.
Some comments on GATT, NAFTA and TRIPPS from a very reputable Canadian corporate law firm that puts the patent protection issue into perspective: http://www.blakes.com/english/view_disc.asp?ID=222
Og smash Canada pharma! One has become accustomed to the USA lashing out at other nations when the USA is frustrated by issues unrelated to those nations. A 'tard with an anger management problem on an international scale.
Because you won’t collectively get off your fat asses and put in the effort required to deal with big pharma. Lazy kids, get off my lawn.
superhero looking up into distance arms akimbo
[backgroundflag=stars and bars][music=militaryband Star Spangled Banner][voiceover=heston as babyjebus]
Because it is the price you pay for freedom.
[/superhero][/flag][/militaryband][/heston]
Your meds need adjusting.
Oh, wait a minute . . .