On 6 Nov 2003 at 0:31, William T Goodall wrote: > > On 5 Nov 2003, at 6:59 pm, Gautam Mukunda wrote: > > > --- The Fool <[EMAIL PROTECTED]> wrote: > >>>>> Lilly lost most of its Prozac market share in > >>>> _weeks_ > >> > >> Most likely because of price. You can't tell me > >> that a company given a > >> 17 year monopoly can't make a drug just as cheaply > >> as a newcomer. > > > > It can. But it can't make them _any cheaper_ than a > > newcomer could. There are hundreds of generic > > manufacturers. So Lilly could get, say, one half of > > one percent of the market with its new drug. When it > > spend _$1BB_ to get that drug to market. > > > > Even worse from a drug company's perspective, > > pharmaceuticals are an almost classic Ec. 101 product. > > Very low barriers to entry, and drugs made by > > different companies are indistinguishable. So what > > happens? The product will be sold very near to the > > marginal cost of production. In the case of drugs, > > the MC of production is _extremely_ low. And, in > > fact, generic manufacturers are far less profitable > > than the creators of new drugs. > >> So your saying almost the entire cost of making a > >> drug is the FDA > >> approval process w/ clinical trial? Sound like > >> something the government > >> should be funding to me. > > > > Yes, this is well known. The _second pill_ costs a > > few cents. The first pill costs a billion dollars. > > I don't know much about economics so feel free to educate me, but > isn't a big chunk of the wealth of 'Western Industrialized' countries > (USA, Europe, Japan) actually IP ? Levis, Nike, Coke, Raybans is all > stuff that costs very little to make (and is made in countries with > cheap labour if possible) but has a high value because of IP. 'Fakes' > are illegal, even if those 'fakes' came out the back door of the same > factory that makes the 'real' product.
They're generally NOT illegal over here, and indeed companies are allways getting fined for stamping down on "grey market imports". > A Sony TV or Walkman has a premium price because it was designed in > Japan and has the brand name even though it may be built in Mexico or > Korea. You're paying for reputation, quality and service as well. If the generic products are as good, they sell. I'd restrict IP to products with an true inivotive (sp) step, and only actual products rather than methods or ideas. The European patent model is a lot more like this than the American one, but has a lot of details I object to. Things like books, I'd like a different category of protection of, and I'd eliminate the "protect it or lose it" part of the IP laws and replace it with "make it or lose it". Andy Andy Dawn Falcon _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
