> From: Gautam Mukunda <[EMAIL PROTECTED]> > > --- 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.
And it would make every cent back eventually. If they weren't price gouging in the first place maybe they wouldn't have driven off all their customers when their patent expired. > > 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. And how is that a bad thing? It's a good thing. > > 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. > > Why? > 1. I want _everyone_ to be funding these things - the > more money, the better I can accept that. But isn't it easier to raise to taxes of the richest people by a couple of percent and progressive raise the tax burden of the rest by a fraction of a percent, so that the government can fund as much R&D as it needs to? > 2. Why should only the government do it, when > governments aren't all that good at doing it? Under > your argument, the government should be the only > people allowed to manufacture the drugs as well. > What's the difference? Because the government is (at least for now) elected by the people, and CEO's from multinational corporation aren't? I think that if the government wanted to be very good at it very well could be. By moving the cost of trials and R&D from the companies that make the drugs, which then aren't as you say spending a billion dollars on the first pill, and makes them more competitive with each other which leads to better products and lower prices? > > Surely a government can compete with other > > governments?, or with > > corporations? Or with itself? But you don't > > necessarily need competition > > when you are doing something without a strict profit > > (research). > > Why would it do any of those things? The point of > competition is that it spurs people/organizations to > perform better. In general, the only government > organizations that operate with anything approaching > private sector effectiveness are the military (which > competes with other militaries, but certainly isn't If the U.S. can spend 350 Billion on defense each year, it can also spend 350 Billion on medical R&D. Properly set up, each individual government lab can compete with each other. And why would they compete like that? Because the government can provide incentives for each lab to be competitive, like giving the designers of better solutions, much higher pay raises. And since they are all government labs a breakthrough at one laboratory is a breakthrough at all govt labs. Something you don't see in the private sector, because greedy corporations protect their methods and breakthroughs at all cost. > even a tiny bit _efficient_) and the postal service > (which competes with private delivery systems). Why > would you want to put something as important as > medical research and development in the exclusive > hands of an organization that is - justly - a byword > for slow and inefficient operations? Governments lack > competitive incentives. Companies don't. It Governments can make competitive incentives. But it also has something that you don't generally see in private corporations: every breakthrough at every lab is a breakthrough for all labs. Competition is good, but so is cooperation, and greedy corporations don't like cooperation. > _matters_ if you're the first drug on the market. For > a blockbuster, every week on patent can be worth tens I'm saying we should eliminate this system where it does matter. Drugs should not be about profit for greedy CEO's they should be about raising the level and quality of health for all citizens. It shouldn't matter when a drug comes to market, and better drugs should replace inferior drugs, not continue to given out because of name recognition. Drug companies now routinely retire useful drugs when their patents run out, only to replace them with different patented drugs that may or not be inferior. And they all kinds of kickbacks to doctors to change to the new patent-bearing drugs, when the old drug worked fine. > of millions of dollars. Outside of the military, name > a government organization capable of operating that > quickly? > > > The Government can throw a much larger amount a > > money, and resources at > > any given problem, and should, that one of it's > > functions. > > That's kind of debatable, actually. Go take a look at No not really. Drug companies spent ~140 Billion on drugs. They spent _more_ than that on advertising alone, not to mention juntas, 100 million dollar congressional lobbying efforts, and doctor kickbacks. > Pfizer, GSK, or Merck's market cap some time. The > _American_ government might have more resources than > those companies, but there aren't too many others that > do. Even more importantly, so what? You can drown Microsoft. Walmart. > problems in money, but that doesn't mean it will be > spent wisely. Governments are not famous for their > ability to spend money effectively. But it doesn't vary because of stock market collapses, bankruptcies, MCI/Enron style fraud... > > And this new > > drug just proves my point. Corporations are too > > greedy to be in charge > > of finding cures and remedies to peoples problems. > > In fact it's not > > really in pharmaceutical companies best interest for > > people to get > > completely better, because they can get them fixed > > on taking x drug > > (which really only treats symptoms) forever, making > > them huge amounts of > > money. If they got better then they would stop > > taking the expensive > > drugs, which means less cash income for > > multi-million/billionaire CEO's. > > Is it in the interest of a democratic government to > > things like that? > > You're kidding, right? In the interest of a > government to get its citizens dependent on something > that only it can provide? Sure. You are saying the U.S. government is seeking authoritarian control over the american people? > That's besides the > point, though. The government can (and does) conduct > all the R&D it wants. But it can't take drugs to It can fund, test, do R&D, and conduct trials. Others companies or contractor can then come in and make the products so people can buy them. > market because it's _not any good_ at that sort of > thing. Even if the US government chose to do that, > the pharma companies would beat its pants off, because > they are _really, really good_ at this task. That's > why they're worth billions of dollars. They are only worth that much because of patents. > Have you ever even _worked_ for a company, Fool? If > Merck had a drug that was useful for continual > treatment of a chronic condition and GSK thought it > could develop a one-shot drug to cure that condition, > what do you think GSK would do, exactly? Sit on its > hands? Why? There's _money_ to be made in that drug. You are mixing up the problem here, replace the word 'GSK' with merck, and what happens to your statement? > If you want to argue that intelligent use of > tax/financial incentives on the part of the government > could persuade companies to look for one-shot cures > more, I'd probably agree. No, I'm saying that manufactures should manufacture, and government should do R&D. > But that's a whole > different thing from saying that the companies are > evil profiteers. You mean like say: Dow, Dupont, IBM, Ford, GM, Etc... As they aided and abetted the Nazi regime? Or perhaps IG Farben (Bayer - Bechtel - BASF) which was the backbone the Nazi Regime? Or Monsanto which is trying to introduce 'Terminator' Genes into all the food crop seeds they sell so they can have absolute control over the entire world crop/Food market? Or... There is a reason why I trust the Government 1000 Times more than I trust Greedy Multinational Corporations. > They're trying to make a buck, And Thats it. And I don't trust the government. > certainly. If you've ever worked with a pharma > company, you would also realize that for most of them, > they aren't kidding when they talk about trying to > save lives. They mean it. I don't think any corporation will do anything which is against its own interests: making the CEO's wealthy, Raising the stock price, Undercutting the competition and creating monopolies, Preventing The U.S. government from enacting reimportation legislation with 100 Million dollar lobbying campaigns to keep the cost of needed prescriptions high, preventing people from third world nations from having access to therapies when millions of their people are dieing. Yeah, I'm gonna trust them. Uh huh. As millions die in africa from hiv while we have drugs that fight hiv. Yup. They sure are good and pure aren't they. It's not like they have done anything at say the WTO to try and maintain the status quo either, I mean these are the _most_ trustworthy companies there are. > You keep talking about the virtues of competition. > Why don't you think they apply to R&D? They certainly do. They do but they don't. Having a centralized research infrastructure provides cooperation in addition to competition. Every discovery can equally beneficial to everyone, raising all boats. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
