Drug price gouging

[KeithE]

Now no one should think that the cost of the active ingredient is the total expense.

And to counteract the expected response from the defenders of Corporate America:
is at most 20% (Pharma estimate), 10% (NSF estimate). Look at Fig 2.2.

was 24.4% in 2004 probably more now.



Yet the defenders of laize-faire economics/government says continue the "deregulation baby!".

[Gene Scarborough]

Let's widen the scope to "medical price gouging!"

I have a relative in Accra, Ghana, who recently suffered a stress-induced 70% bockage in her main coronary artery. She got a stint---on promise to pay---with the same procedures and success as in the US.

Guess what it cost?????

Would you believe $1,500!!!!

She had excellent hospital care / a good surgeon / the latest meds and aftercare. So are we paying too much for standard procedures with non-invasive chest cracking or what?????

You be the judge! Maybe they don't have the ambulance-chasing lawyers there that we have here. It certainly has to do with some kind of real reasons not known in the borders of the USA! In Canada meds certainly cost enough less for border state people to hop on chartered buses / gamble at the Casinos / enjoy a night or 2 out---all at a lesser cost than visiting the local drug store across the streets of Detroit, for example.

[ET]

Keith....and the regulatory solution is? What will we lose as a result of that solution and will it be worth it? There are no solutions in economics - only tradeoffs.


Gene, the reason drugs are cheaper in Canada is this. Canada has a single-payer system. They tell pharmaceutical companies what they will pay for those drugs. If the companies do not wish to pay that price, then the drug is either not approved for sale in Canada or the patent is not enforced and other drug companies are allowed to basically steal the medicine. So in order to not lose their rights to the drug they developed, the U.S. drug companies eat the loss on their investment or recoup it through higher prices here. I thought I had a bookmarked article on this issue, but can't find it or deleted it.

[Gene Scarborough]

Well---ET

I recognize development costs are high, BUT are they high enough to support the continuous high cost of drugs????

Strangely, the Canadian drug companies stay in business = proof positive than the meds can be sold more reasonably.

I cited above the rediculous cost of medicine in the US. A stint costs only $1,500 in Ghana. The same procedure in the US is more likely $15,000-150,000!!!!!

Is it the malpractice costs / Doctors getting rich quick / insurance companies willing to pay regardless of cost (mean old "controlling insurance companies" / the unchecked list of costs which shows and asperin at $10 a pop / the "consulting Physician sticking his head in the door to get another $1,000 added to the bill / or WHAT?????

Ball in your court, old buddy!!!!

[ET]

[KeithE]

[Gene Scarborough]

ET---

I join Keith in agreement with "too little competition / too much government interference." Right on!!!!

We have two kinds of economy: simple and small competition based / large and complex profit based.

I pefer the first because it is far more natural. The farmer who grew better crops in small farm days got the attention of others who asked him how he did it. My grandaddy was such a farmer who became the first County Agent for Pickens County, SC, as they promoted Soil Conservation with terasing of red clay hills / crop rotation / market knowledge as to what would bring good prices. If greed creeps into cotton farming, for example, too much is produced and the price drops. Some farmers had put back enough to see then through or had enough credit to keep on. Poor decisions / bad weather / bad prices all contribute to whether a farmer succeeds of fails.

The opposite is what we have going now, known as Agribusiness = large corporate farms. Foolishly, the subsidies meant to help the small farmer come out of the Depression are still in place. A man who can borrow $1-5M to start his year, hardly needs us taxpayers supporting him in hard times. All Industries getting so big / investors expecting profit EVERY year / bailouts to keep them afloat are no longer "fair competition." Yet, the very people who rage about "less government" are the ones who expect their Auto Giant to succeed no matter what! The difference between Agribusiness and Autos is that each farmer has only 1 investor = his bank. In turn, that bank has investors, but a Wall Street Banker knows nothing about farming. Anyone who expects and demands "progress without any failure" is a fool.

Price gouging is another phrase for "progress without any failure." The price of a successful drug should simply be it's efficacy to produce safe results. I fail to see why a modern new car should cost twice what I paid for my first house in 1970! With easy credit, anyone can buy one, but in recent years they have added the negative numbers of trading into the new loan and extended it now to 5-6 years. To smell new paint, fools no longer realize most cars will go 100-200K miles with no major repair issues. Insurance companies are now demanding lower prices on drugs and medical care because they are growing at 3-4 times the inflation rate.

The further you get away from simple forms of smaller oporations, the more the government interfers. The average person wants to earn big wages with no experience nor failure. We have gone from a Henry Ford or my Grandaddy Williams experimenting with new technology to Clemson University and white coat clad "scientists" developing elaborate chemicals to kill weeds. They get into the food chain and---with hormone raised animals---we have girls developing breasts at age 6 / people developing cancer of the lung who NEVER smoked!

This is a little rambling, but I'm trying to point out the value of KISS = Keep It Simple Stupid.