"Kurt Ullman" wrote in message
m...
In article ,
wrote:

stuff snipped

There are so many things wrong with the above, that I don't know
where to begin. First, let's for the moment just accept the premise
given that the govt is going to somehow fix the price of drugs at a
low level producing low or no profits.

No. I don't accept the premise that the government is setting the
price of drugs at a low or high level. The confusing thing (for you)
is the paragraph above:

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).

"Created in 1987 under the federal Patent Act, the Patented Medicine Prices
Review Board is an independent quasi-judicial body responsible for ensuring
that the prices of all patented medicines sold in Canada are not excessive."

http://www.whoswholegal.com/news/fea...-manufacturers

"The PMPRB regulates the price at which patentees or their licensees sell
patented medicines to wholesalers, hospitals or pharmacies - commonly
referred to as the "factory gate" or "ex-factory" price. It does not,
however, have jurisdiction to regulate the prices of patented medicines
throughout the distribution chain (ie, from the wholesaler to pharmacies) or
to the eventual customer, the patient. Nor does it have jurisdiction to
review the prices negotiated with the federal, provincial or territorial
drug plans."

For the PMPRB to review the prices of patented medicines, patentees must
submit specified pricing information at introduction and on a semi-annual
basis. The Board then undertakes both a scientific and a review to establish
whether the price of the patented medicine is an appropriate benchmark price
or whether it is excessive. The scientific review is an evidence-led process
that categorises medicines based on the level of therapeutic improvement:
breakthrough, substantial improvement, moderate improvement, or slight or no
improvement. Following the categorisation of the medicine, a corresponding
price test is then applied to determine if the price may be considered
excessive.

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.

Sanity check. Are you saying that generic osteoporosis meds are going to be
more expensive than the brand names in Canada? What I've read implies in
Canada, generics become available 5 years earlier than in the United States
and must be at least 25% less than name brands. I've also read that
prescription drug prices are lower in Canada because drug companies selling
into Canada are not allowed to advertise their products. God only knows how
much the ads we see for Viagra and Lipitor add to their overall price.

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.


These are not price controls, as you acknowledge by the word "setting." The
government is simply saying: "This is what we are willing to pay if you want
to do business with us." Of course they want to do business with the
largest group of customers in the country. Big Pharma just hates the idea
of not being able to make egregious profits like cell phone companies do on
text messaging or the banks did with overdraft fees and credit transaction
processing fees.

Since there's often very little competition for "blockbuster" drugs on
patent, we're stuck dealing with companies who can set almost any price they
choose free of actual competition. The Canadian model just makes them
present accounting data that I am sure Big Pharma would rather keep "company
confidential" because it's bad business for the customer to find out how
badly they're being gouged.

Most economists will tell you that businesses try very hard to limit true
competition just so they can "name their own tune" and force everyone else
to dance to it. They buy up competitors and end up being so large that the
government has to guarantee their continued existence when they fail to act
responsibly, like the banks did in the lead up to the 2008 bust. When you
get "too big to fail" you've become "big enough" to require the government
to review your operations to protect their forced investment. We're getting
there. People are beginning to understand why oil companies get huge tax
breaks and show record profits when so many people can't find jobs. The
system's badly out of balance. Even economic engines need some sort of
regulator to prevent runaway operation.

The profit motive clashes hard with the basic premise of health care - to
make people well and keep them from getting sick. Sadly, a healthy country
is NOT good for big Pharma. I'm all for the Feds doing drug development
through NIH because of the inherent conflict of "for profit" and "for the
general welfare" of the country's citizens.

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.

You can use tax dollars to fund NIH research and then license manufacturing
of any drugs developed to Big Pharma houses competing for the rights. We do
the same with radio spectrum and with drilling rights, basically. It
wouldn't be hard to bring pharmaceuticals into that same model. The IP
rights, like the country's oil and minerals and the radio spectrum belong to
all Americans. It would drastically decrease the cost of drugs and END the
quest for blockbuster profit centers.

When you tell us that the rich pay more of their income in higher taxes, how
much of the government money that the poor spend go to landlords, doctors,
pharma companies, oil companies, light companies and tons of other
investment vehicles for the very rich? If the system doesn't get
confiscatory at the very end it we may see an economic reaction proceed to a
very bad completion.

First, for the most part, you'd never get to the stage of having
a promising drug to seek financing for. The drug companies
today spend huge sums on speculative research trying to find
drugs. Everything from sending teams into rainforests to
search for plants, to advanced bio labs. Usually, only after
huge expenditures do you get to the point where you THINK
you might have a new viable drug. And even then many, if
not most wind up failures.

And this differs in principle from other industries how? Don't the
extractive industries have the same problem? Lots of dry holes? Have
you not noticed on a much smaller scale someone starting a business
(say a retail store) in the hope of making a profit and finding that
the customers aren't coming in? This is perfectly normal for all
businesses.


Won't.

Won't what?

Thus you see, to use your own example, oil drilling and
exploration go up or down based on the price of oil. WHen it gets more
expensive (outrageous profits) the rigs get going, when it goes down the
drilling does too. Same with most mining operations.

Then let's look at films. Or selling radio spectrum. Much less price
sensitivity there. Films are now mostly financed by limited partnerships
and not by studios exclusively as they were in the 40's. Movie ticket
prices are basically "fixed." How can that happen in a free market? -
Collusion that can't be traced. It's the same reason that all the large
banks are starting to charge fees for debit cards, all the same amount, all
at the same time.

Power concentrated in the hands of a small number of huge companies causes
them to operate just like any OPEC-like cartel. The individual investors in
any particular film are quite wide-ranging with some of the money coming
from previous film successes, but with a lot of money coming from elsewhere.
There's no reason Big Pharma can't work that way EXCEPT they are still in
the luxurious position of saying: "why have partners when you can have it
all?"

Congress broke up the studio system. It can break up Big Pharma or the Big
Banks if there's political will. Congress may have failed us in preventing
BoA and others from eating every small bank in sight by not, as you
suggested elsewhere, enforcing anti-trust laws already on the books.

And given that prices are going to be fixed artificially
low, what entrepeneur is going to seek to go into business
with a new drug?

Why do you keep going on about prices being fixed? I'll do what you do
and say: "Let's just accept that the drug company can set its prices
for what the market will bear just as in any other industry." That's
certainly the case for the drugs I use.

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.

Are usury laws (basically lobbied out of existence by the big banks)
price-fixing? Perhaps there's a compelling social interest in a country not
having its citizens spread-eagled and bung-bunged by companies that are
using monopolistic practices to gouge people. Reviewing is not price
fixing. It's a process whereby a consumer or their representative examines
a non-competitive pricing structure (it does say "Patent Medicine") and
determines whether the prices are so high that the public interest is not
well-served. As much as they may hate it, the drug companies still sell to
Canada and US citizens still go there to get meds cheaper than they can get
in the US. That offends a lot of people. And it should.

I just realized that the diffuse nature of the OWS'ers is mirrored in the
large numbers of situations where people got sold down the river in the name
of bribe (ahem) contribution-making corporations? Who here hasn't had some
(or many, many) benefits cut or lost out in some way to the shift towards
deregulation and sub-contracting. I watched a whole company change in a few
years from a respected research institution into a "we will find a
sub-contractor in your price range and manage them for you" turnkey
consultant whorehouse? (-:

And finally, even if they did seek financing, what fools
would invest knowing the govt was going to screw around
and set the price for the drugs?

And once again you bring in a red herring. But even here where there's
the constant threat of government intervention, oil exploration
companies (for example) continue to search for new fields.

Precisely. Big Oil and Big Pharma have learned to plead poverty all the way
to the bank as they lobby for even more tax breaks. Big Oil constantly
forgets they are extracting something that doesn't belong to them, but to
every US citizen and yet we pay more everyday for our own mineral wealth.
Where's the money going?

If the Feds can run the largest military organization in the world, they're
perfectly capable of hiring everyone and everything they need to extract our
oil for us. Deregulation for some necessities of life has been pretty bad
for the consumer and much better for the stockholder instead of a public
trust. Business has been slowly infiltrating many previously government-run
institutions with less than stellar cost savings or results.

For example, I and many like me, was much better off when the Public Service
Commission determined a "reasonable rate of return" for Pepco, the local
power company. Anyone in DC or Maryland knows that service has declined (by
quantifiable measures and surveys) and costs have skyrocketed. Where are
the big benefits promised from deregulation? They were all lies. But the
power company shareholders are transferring my wealth and that of EVERY DC
RESIDENT'S into their bank accounts. That wasn't happening before and it
should stop now.

Maybe this is the decade where the trend gets reversed and a different kind
of conservatism arises. One where we decide what level of government works
and what doesn't. A government watchdog with a not-for-profit local company
like Pepco used to be served the people who lived in the area, not
shareholders who couldn't care less if service was shoddy. One that
provided steady work for many in the area for a lifetime, too, and is now
mostly contractors with no health benefits in a dangerous job where most go
without things like life insurance because the premiums are too high. We
were lied to, and are now told "We can't go back?" I know just where to
find the consultants to them my state senators how.

Things *can* be changed back, and this may the turning point when people
start demanding that. People are awakening to the many ways the country's
politicians have bent over backwards for Big Business and screwed the little
people. The rent's too damn high.

--
Bobby G.