DIYbanter - View Single Post

Kurt Ullman

In article ,
wrote:

Kurt Ullman wrote:

In article ,
wrote:

No. I don't accept the premise that the government is setting the
price of drugs at a low or high level.

Governents are currently doing that is most countries. Canada, for
instance, sets the price for new drugs based on a basket of other
country's prices (mostly European who also set the prices).
Interestingly enough, at least in the case of Canada, is that generic
prices aren't price controlled and generally higher than the brand name
medications.

I'm sorry (being sarcastic) I thought we were talking about the USA.
AFAIK the US government does not set the prices of drugs. Even the
Veteran's Administration only "negotiates" the price.
We were, you said it wouldn't happen, I mentioned that not only is
already happening elsewhere, but a bunch of elsewheres. This has also
been tossed about around here, so far to no avail.

Also, price setting is the model currently being used in the US to
pay the docs and hospitals under the government programs. Has been since
at least the mid-80s and the institute of Diagnostic Related Groups and
their progeny.

Keep your eye on the ball. DRG's and payments for services of MD's and
hospital are not price setting for drugs.

But again they are precendent that it COULD happen. Given the
history, my guess would be sooner rather than later.

I'm not commenting one way or the other about Medicare, part D or any
similar interference in the market. I'm simply using the post to
correct the two erroneous assertions: that new drugs have to be
financed from inflated prices for old drugs and that we're subsidizing
the drug cost for other countries.

How else are you going to finance the drugs. You have to have profits
from somewhere to pay for it, either in house or some possibility that
the investors will be paid back.

I explained before how the drug companies should be just like others:
go to the market. Of course the investors expect to be repaid and to
make a profit. I have no objection to internal financing -- it happens
all the time in all industries -- but to use the excuse that the
company has to charge an inflated price on an old product because it
has to finance a new one is wrong but apparently swallowed even by the
supposed proponents of a competitive free market (i.e. you lot).
But it is. Your wishing won't make it otherwise. There is no real
method to put together the money needed, especially when the payoff is a
minimum of 10-15 years away and only a few make it all the way. You want
to put one together that actually works, feel free.

In the US, but not always in other places. Canada has a Patent
Medicine Price Review Board. The mandate is to make sure the prices
charged are not "excessive". If that isn't price fixing, I don't know
what is.

And WE'RE NOT TALKING ABOUT OTHER COUNTRIES!!! Sheesh!
You want to guarantee me that it won't occur here? Heck it already
is, as noted by MCare and DRGs. I

But there is not a study showing that that isn't related to the price
of the commodity. WHen the price goes up, so does the number of wells
and people looking for it. WHen it goes down, many pack up and leave. If
the government picks the prices of drugs, you may have a feast or
famine, too.

The price for oil (ignoring price fixing cartels and so-called
speculators) rises and falls based on demand. Demand for drugs in an
oblique way does too. More people with senile decay, more effort to
find and sell drugs to treat it. Fashion and ease of production also
have an effect. For example, at the moment senile decay is fashionable
but BP and Cholesterol are about tapped out.

SOme of that goes back to the low hanging fruit, too. The easy stuff
to work on those two have already been done. The senile market is now
maturing (sorry) to the point where the interest lies.

You saying that the drug companies are jacking things up past what
the market will bear? How do they do that? Maybe past what you offends
your sensibilities, but not above what the market will bear.

Patents! But it's not so much what they're doing (we don't have an
alternate universe so I can't determine exactly to what level prices
would fall) but it's the assertion by the companies themselves and
apologists such as you that the reason for high prices is to finance
future drugs.
ANd yet you haven't actually shown another viable system, your own
alternative universe.

One would have thought that a rabid capitalist like yourself would
understand that what the drug companies do or propose is the socialist
way: eventually make everyone pay the same for their drugs!

Socialism as both a political and economic system focuses only on
the means of production and not the price.

Nonsense. Don't you scream "socialism" when the government tries to
raise the minimum wage (price of labor)?

Price of labor has not been a means of production since when?

Gaining market share doesn't have to be "paid for" elsewhere if you
don't sell below marginal cost. You still make a profit it's just less
per unit but the extra volume makes greater overall profit.
So you lose money on every unit, but make it up in volume (grin)?

What I explained above (the dead horse paragraph) is classic Marketing
101 leavened with a little of Cost Accounting 102. I'm not going to
give you or Trader 4F an entire course on the subject.
Since you did not recognize labor as being part of the means of
production, I am not thinking we are at a great loss.

--
People thought cybersex was a safe alternative,
until patients started presenting with sexually
acquired carpal tunnel syndrome.-Howard Berkowitz