The Cost of Prescription Drugs

Does this include research and development.

 

Obviously not.

Also doesn't include the payoffs to Doctors and pharmacists, lobbying in Washington, Mega-million 'prescribe-your-own-meds' TV ads directly to consumers, and other ancilliary costs.

Interesting data, none the less.

 

It's absolutely disgusting that these giant pharm corporations hold sick Americans hostage like they do. A 570,000% mark-up?! Are you kidding me? I can't believe Americans allow these giant corporations to gouge us like that.

Capping pharm corporations profits at even 20 percent above cost isn't unreasonable -- especially considering that many of these drugs were developed with *our* tax dollars.

Companies would still maintain a healthy profit, sick patients could afford decent health care, and a significant tax burden would be removed from our federal and state budgets.

 

But then Pharm companies wouldn't be able to buy boxes at the Super Bowl, fund extravagant retreats, or have enough money to push their favored legislation through Congress.

 

Does this include research and development.

Even more importantly the price does not include FDA required testing/trials which is amazingly expensive.

 

I guess you support the banning of advertisement.

 

But, c'mon, it's just sooooo much easier to blame it all on greedy corporations.

The profit margins on the mass-marketed "mainstream" drugs (viagra, celebrex, prilosec, many anti-depressants, etc....) make up for substantial losses in other areas of research (i.e. drugs for more "obscure" ailments, and drugs that never even make it out of the lab).

How much private-sector money has been spent on AIDS research vs. how much has been recouped in revenue from resulting drugs?

Questions for the panel:

a) How long do pharmaceutical patents last?
b) How long before generic alternatives are allowed to hit the market?

 

You're right, of course.

But those profit margins, based on direct costs, show just how important your later two questions are.

The length of time for patent protection, and possible pricing controls/guidelines, are, literally, the million dollar questions.

500,000% markups, however, highlight the importance of the role of the regulators.

 

My biggest problem with the pharmacons (pharmaceutical conglomerate) is not about the fact that they make huge profits, it is that they gouge Americans. Canadians, Mexicans, and Europeans pay substantially less than Americans for EXACTLY the same drugs. There is a reason that companies are not allowed to lower prices in one part of this country and not another. It should work the same way internationally.

This problem is exacerbated by the laws passed by Congress at the behest of the pharmacons that prohibit drug imports. If a drug is available at a lower price, we should be able to buy it.

Personally, I have a big problem with advertising drugs as well. If someone needs a drug, whether for acid reflux, impotence, or "social anxiety disorder," it should be recommended by a doctor, not Madison Avenue.

 

c) How many years remain after the patent is granted and all of the FDA testing has been completed?

 

I don't know the answer, but it should be a decent amount of time. If it's too short, then people will not take the risk to develop newer, better, safer drugs.

 

If it's in an e-mail, it MUST be true...

 

Or they charge a lot of money while the drug is still under patent.

 

Of course, you can buy Claritin over the counter now. Ironically, I have to pay more because my insurance company no longer pays for it.

 

500,000% markups, however, highlight the importance of the role of the regulators.

But it's only a 500,000% mark-up when a very small part of the costs are considered.

Add in R&D, facilities cost, labor costs, other fixed costs, marketing costs, regulation costs, taxes, etc., what percentage would the mark-up be?

They may still be gouging, in many people's opinions, but using a 500,000% mark-up figure is simply not accurate since it doesn't take into account the other costs of producing a product and operating as a going concern.

 

Mr P:

I didn't intend to suggest the markups are necessarily out of line. The R&D costs and testing are very high. It is just that because, once the product is up and running the profit margin is soooo high, and as these are typically products vital to peoples existence, it highlights the importance of the regulatory framework in this industry.

 

GV, your thoughts?:

Yes, to be sure, there is good news in the fact that the pharmaceutical industry has so far won approval for 80 drugs that fight HIV and the opportunistic infections that thrive alongside it. The latest figures from the U.S. industry group, PhRMA, showed another 83 drugs or vaccines in development. But AIDS drugs development is trending downward.

This is due to continuing attacks on drug patents and prices. This trend must be reversed if AIDS is to be conquered in the next 20 years, and that will only happen if AIDS research can pay for itself.

...The seemingly infinitely adaptable HIV side-steps therapy with appalling speed and every year new drugs must replace obsolete ones just to maintain a steady state.

A successful AIDS drug costs hundreds of millions to bring to market. The chances of a company recouping that kind of money are further reduced by factors other than resistance; notably, companies can no longer rely on full patent protection. Many governments around the world claim the right to override U.S.-style licensing laws, which allow the inventor a period of marketing exclusivity. And even the staunchly pro-property-rights Bush administration is likely to buy generic versions of patented HIV drugs from Canada, India or elsewhere.

...For now the hundreds of millions some big pharma companies are spending on HIV vaccine and drug research every year is economically unjustifiable and probably not sustainable.

Roger Bate, Wall Street Journal, 12-1-03

Why the decline?

Because the drugs companies no longer believe that they are going to get rich out of AIDS research. In fact they begin to doubt they will get any compensation at all. They read the newspapers, they study the speeches of politicians, and they sense that the popular wind is blowing against them. They think, probably rightly, that governments will either force them to sell at a loss drugs that were developed at huge expense or will bypass them and the law entirely by buying generic copies of patent drugs. Governments, after all, are the ones who can change the law when it is inconvenient. One minute the authorities will come down like a ton of bricks on pirate music or pirate videos. The next minute they will say that it is 'unacceptable greed' for companies to actually want to profit from patents on medical discoveries. I accept that there are subtleties and genuine conflicts of principle in the field of intellectual property – but the bottom line is that if pharma companies get nothing but abuse for the work they put in they bloody well won’t put in much more of it.
http://www.samizdata.net/blog/archives/005125.html#005125

Intellectual property, patents, and a free market (with adequite regulation...nods to bnb) are vital to pharmaceutical research throughout the world. Why can't the social justice & anti-globalizaion crowds see this?

 

Hey. Buck, if the drug companies don't want to do reserach on aids drugs due to concern about profits, I think that is a good argument for being sure that we have the Naitonal insitute of health and other gorvernment agencies ready to take up the slack. Don't you think we should try to cure aids even if they can't make a buck off of it.

Why should we as a society just blow if off cause they are worried about profits?

This just shows the danger of having our health just depend on whether someone can make a profit on it.

Health care still remains, along with insurance which is just risk pooling and has nothing to do with rugged entrepeneuralism, as two main areas that need to be substantially socialized.