OT| We already knew, or...

[Bruce Morgen]

...at least some of us did:

<http://nymag.com/daily/intelligencer/2013/05/facts-are-in-and-paul-ryan-is-wrong.html>

[RichL]

"Bruce Morgen" <edi...@juno.com> wrote in message
news:1boqo8taeqnddo5ep...@4ax.com...

> ...at least some of us did:
>
> <http://nymag.com/daily/intelligencer/2013/05/facts-are-in-and-paul-ryan-is-wrong.html>

A couple of things. First, Reinhart-Rogoff never served (for most
Republicans) as an ideological justification for austerity. It was more of
a gut, "everybody knows a government budget is like a family budget" thing,
and frankly they never let facts get in the way of a good rant. And the
errors detected in Reinhart-Rogoff have been overblown anyways; they don't
*prove* that it's false that there exists a certain debt-to-GDP ratio is
dangerous. As of now, from a fundamental economics standpoint, it remains
an unsolved problem.

More to the point I believe is the ample empirical evidence from the
European experience that austerity does far more harm than good.
Republicans won't change their ideas based on that, though.

As for the healthcare business, the fact is that *nobody knows* why the rate
of cost increase is getting smaller and whether this is a temporary state of
affairs, and it's a bit disingenuous of the author to try to link this with
Obamacare (since the vast majority of Obamacare hasn't even kicked in yet)
but at the same time acceding that such a linkage doesn't exist.

Fact is, due to its complexity, we really don't know how Obamacare will
impact future medical costs. I'm skeptical in that we still have the same
cast of characters (insurance companies) serving as middlemen, and given
that that framework hasn't changed, I don't expect to get something for
nothing. I think there will be some cost shifting that will allow people to
get insurance who otherwise wouldn't have it (which is a good thing), but I
think it's naive to think the rest of us won't be paying for it.

In the long term, single-payer is the only way to go.

[Bruce Morgen]

"RichL" <rple...@yahoo.com> wrote:

>"Bruce Morgen" <edi...@juno.com> wrote in message
>news:1boqo8taeqnddo5ep...@4ax.com...
>> ...at least some of us did:
>>

[snip]

>
>In the long term, single-payer is the only way to go.

Word....

[Les Cargill]

RichL wrote:
> "Bruce Morgen" <edi...@juno.com> wrote in message
> news:1boqo8taeqnddo5ep...@4ax.com...
>> ...at least some of us did:
>>
>> <http://nymag.com/daily/intelligencer/2013/05/facts-are-in-and-paul-ryan-is-wrong.html>
>>
>
> A couple of things. First, Reinhart-Rogoff never served (for most
> Republicans) as an ideological justification for austerity. It was more
> of a gut, "everybody knows a government budget is like a family budget"
> thing, and frankly they never let facts get in the way of a good rant.

Just so.

> And the errors detected in Reinhart-Rogoff have been overblown anyways;
> they don't *prove* that it's false that there exists a certain
> debt-to-GDP ratio is dangerous. As of now, from a fundamental economics
> standpoint, it remains an unsolved problem.
>

Right.

> More to the point I believe is the ample empirical evidence from the
> European experience that austerity does far more harm than good.
> Republicans won't change their ideas based on that, though.
>
> As for the healthcare business, the fact is that *nobody knows* why the
> rate of cost increase is getting smaller and whether this is a temporary
> state of affairs, and it's a bit disingenuous of the author to try to
> link this with Obamacare (since the vast majority of Obamacare hasn't
> even kicked in yet) but at the same time acceding that such a linkage
> doesn't exist.
>

In general, ready cash is in shorter and shorter supply. There may
well be unmeasured deflation or disinflation. Retailers are seeing
volumes spike on "check day".

> Fact is, due to its complexity, we really don't know how Obamacare will
> impact future medical costs. I'm skeptical in that we still have the
> same cast of characters (insurance companies) serving as middlemen,

that does not have to a bad thing; as with car insurance, simply
let them compete, let them buy medical services companies for
cost control purposes and move on.

But we did not do that...

> and
> given that that framework hasn't changed, I don't expect to get
> something for nothing. I think there will be some cost shifting that
> will allow people to get insurance who otherwise wouldn't have it (which
> is a good thing), but I think it's naive to think the rest of us won't
> be paying for it.
>
> In the long term, single-payer is the only way to go.

Maybe. The NHS in Britain was enacted when there wasn't a lot of medical
spending to begin with*. It's easier to jump on a slower-moving train,
so to speak.

*the post-war period was very poor for Britain for a decade after
the end of the War.

Canada had Provincial healthcare before it was federalized. It
was bottom-up. Canada also has had chronic shortages of doctors.

--
Les Cargill

[Les Cargill]

Why not let insurance companies compete? My understanding
is that the Kaiser system works quite well.

Perhaps it would simply be better is the Federal government
were "underwriter of last resort."

--
Les Cargill

[Bruce Morgen]

Les Cargill <lcarg...@comcast.com> wrote:

>Bruce Morgen wrote:
>> "RichL" <rple...@yahoo.com> wrote:
>>
>>> "Bruce Morgen" <edi...@juno.com> wrote in message
>>> news:1boqo8taeqnddo5ep...@4ax.com...
>>>> ...at least some of us did:
>>>>
>> [snip]
>>>
>>> In the long term, single-payer is the only way to go.
>>
>> Word....
>>
>
>Why not let insurance companies compete? My understanding
>is that the Kaiser system works quite well.

They don't really compete now
and I see no reason to hope
that will change. A single-
payer system is IMO the only
practical counterbalance to
the avarice of big pharma and
the wild discrepancies in the
cost of hospital care -- all
the private insurers can do
is nickel and dime their own
policy holders with nitpicky
meddling, while a single-
payer entity can effectively
twist all the arms in need of
a good twist.

[Bruce Morgen]

Easily explained -- there's
more money (especially for
the hot fields like
neurology and cardiology)
south of the border, and
there's no Berlin Wall to
hinder them following that
money. Competition can
cut both ways -- it can
drive down prices, but it
can also drive up
compensation in a skilled
labor market where demand
for the services that
labor provides is strong,
and MDieties tend to have
student loan debt that
dwarfs that of ordinary
mortals with similar post
grad bona-fides.

[Les Cargill]

Bruce Morgen wrote:
> Les Cargill <lcarg...@comcast.com> wrote:
>
>> Bruce Morgen wrote:
>>> "RichL" <rple...@yahoo.com> wrote:
>>>
>>>> "Bruce Morgen" <edi...@juno.com> wrote in message
>>>> news:1boqo8taeqnddo5ep...@4ax.com...
>>>>> ...at least some of us did:
>>>>>
>>> [snip]
>>>>
>>>> In the long term, single-payer is the only way to go.
>>>
>>> Word....
>>>
>>
>> Why not let insurance companies compete? My understanding
>> is that the Kaiser system works quite well.
>
> They don't really compete now
> and I see no reason to hope
> that will change.

All it would take is a few laws being passed.

> A single-
> payer system is IMO the only
> practical counterbalance to
> the avarice of big pharma

No.

> and
> the wild discrepancies in the
> cost of hospital care --

How's your car insurance cost over what it was
ten-twenty years ago? Lower, I will bet.

> all
> the private insurers can do
> is nickel and dime their own
> policy holders with nitpicky
> meddling, while a single-
> payer entity can effectively
> twist all the arms in need of
> a good twist.

Yeah, that's the problem. The arm twisting.

>>
>> Perhaps it would simply be better is the Federal government
>> were "underwriter of last resort."
>

--
Les Cargill

[Les Cargill]

It's more of a historical thing. Parts of Canada were
still being settled late.

-- there's
> more money (especially for
> the hot fields like
> neurology and cardiology)
> south of the border, and
> there's no Berlin Wall to
> hinder them following that
> money.

I'm not so sure - I know more people who are USA expats
in Canada now than Canadian expats living in the States.

granted,m they're nto doctors, but being a doctor in
Canuckistan is a lot less stressful than in the US, too.

> Competition can
> cut both ways -- it can
> drive down prices, but it
> can also drive up
> compensation in a skilled
> labor market where demand
> for the services that
> labor provides is strong,

Perhaps. The whole industry is ripe for massive
cost reduction, starting with the management/billing
plane and moving up.

> and MDieties tend to have
> student loan debt that
> dwarfs that of ordinary
> mortals with similar post
> grad bona-fides.
>

Absolutely true, and completely unnecessary. Suppose medical
school is a public good... so make for a single-payer medical education
system.

--
Les Cargill

[RichL]

"Les Cargill" <lcarg...@comcast.com> wrote in message
news:kmk2l6$b9q$2...@dont-email.me...

The elephant in the room: per capita medical costs *dramatically* lower in
countries that have single-payer systems.

[Les Cargill]

And as incomes have risen in those countries, so have
healthcare expenditures. Check Switzerland and Germany for that.

--
Les Cargill

[RichL]

"Les Cargill" <lcarg...@comcast.com> wrote in message

news:kmkb5j$d7g$1...@dont-email.me...

They're still considerably lower than ours.

I found this representation particularly interesting:

http://www.petersoninstitute.org/images/fig-kirkegaard20090310-2.gif

[Les Cargill]

RichL wrote:
> "Les Cargill" <lcarg...@comcast.com> wrote in message
> news:kmkb5j$d7g$1...@dont-email.me...
>> RichL wrote:
>>> "Les Cargill" <lcarg...@comcast.com> wrote in message
>>> news:kmk2l6$b9q$2...@dont-email.me...
>>>> Bruce Morgen wrote:
>>>>> "RichL" <rple...@yahoo.com> wrote:
>>>>>
>>>>>> "Bruce Morgen" <edi...@juno.com> wrote in message
>>>>>> news:1boqo8taeqnddo5ep...@4ax.com...
>>>>>>> ...at least some of us did:
>>>>>>>
>>>>> [snip]
>>>>>>
>>>>>> In the long term, single-payer is the only way to go.
>>>>>
>>>>> Word....
>>>>>
>>>>
>>>> Why not let insurance companies compete? My understanding
>>>> is that the Kaiser system works quite well.
>>>>
>>>> Perhaps it would simply be better is the Federal government
>>>> were "underwriter of last resort."
>>>
>>> The elephant in the room: per capita medical costs *dramatically* lower
>>> in countries that have single-payer systems.
>>
>>
>> And as incomes have risen in those countries, so have
>> healthcare expenditures. Check Switzerland and Germany for that.
>
> They're still considerably lower than ours.
>

Absolutely. We don't know what that will be in ten years, though.
The Big Demographic Shift is in play.

It's gonna be weird:
http://fistfulofeuros.net/afoe/the-suitcase-mood/

> I found this representation particularly interesting:
>
> http://www.petersoninstitute.org/images/fig-kirkegaard20090310-2.gif

That's a really good presentation. Please note that the closest to us is
Switzerland :) Some have expressed the idea that we have the money,
we're neurotic about our health ( much more than our parents ) and
we spend it that way.

--
Les Cargill

[RichL]

"Spender" <Spe...@Mars.org> wrote in message
news:2hdto8d1bn1dcjitk...@giganews.com...

> On Fri, 10 May 2013 22:20:19 -0400, "RichL" <rple...@yahoo.com> wrote:
>
>>"Les Cargill" <lcarg...@comcast.com> wrote in message
>>news:kmk2l6$b9q$2...@dont-email.me...
>>>

>>> Perhaps it would simply be better is the Federal government
>>> were "underwriter of last resort."
>>
>>The elephant in the room: per capita medical costs *dramatically* lower in
>>countries that have single-payer systems.
>

> How could you expect anything different? Governments that put an iron
> boot on the throat of the medical industry produce two things:
>
> 1: Lower costs for themselves.

You mean there are actually governments that advocate on behalf of their own
citizens? Mercy me!
>
> 2: Higher costs for Americans.

Yes, our government refuses to negotiate with pharmaceuticals, even for
government-run programs such as Medicare and Medicaid. However, for some
odd reason the Veterans Adminstration is permitted to negotiate, and it
achieves prices that are 48% less than the prices paid for participants in
Medicare Part D.

For Medicare and Medicaid, there is negotiation between private insurance
companies and pharmaceuticals. Wow, what a ringing endorsement for the
private sector running things instead of the government!
>
> If you don't see how that works you need to remember that quite a bit of
> medical technology and pharmaceuticals are produced in the U.S.

Probably not as much as you think. Here are the top 10 pharmaceutical
companies, listed by order of number of employees:

1. Novartis (Swiss)
2. Johnson & Johnson (US)
3. Sanofi (France)
4. GlaxoSmithKline (UK)
5. Pfizer (US)
6. Abbott Laboratories (US)
7. Merck (US)
8. Roche (Swiss)
9. Bayer HealthCare (German)
10. AstraZeneca (UK/Sweden)

(In terms of highest 10 by revenue, it's the same 10 companies, but listed
in a different order.)

> Many
> other countries get them at bargain basement prices by fiat - they simply
> dictate that the products will be sold in their country at the price they
> specify, or (effectively speaking) they will not be sold at all.

No, it's not "fiat" -- it's called "negotiation".

> For
> instance, an American drug not permitted on the formulary in Canada
> because the manufacturer refused to play ball can be too expensive for the
> average Canadian to pay out of pocket. A limited market with very little
> hope of expanding. So the manufacturers *do* play ball.

They wouldn't if they weren't making a profit. They're making a profit.
They're just making much more of a profit from Americans.
>
> Who makes up the difference? Americans. We pay more for drugs so that
> Canadians can pay less. This is made even worse by countries that demand
> that all American drugs must be manufactured in the host country. That
> allows that country to not only get cheaper drugs, but to sell them to
> other countries as well. That is what makes many American-invented drugs
> cheaper in Cuba.
>
> And again, American are the ones who pay the freight. If the
> international market was actually free then the costs for Americans would
> go down.

So most other countries pay much lower prices for pharmaceuticals than we do
in the US, and the solution is for other countries to do as the US does?
Incredible.

I'd think any rational person would look at the US vis-a-vis other countries
and conclude "gee, maybe we ought to be negotiating, too".

Pharmaceutical company profits are enormous, and as it turns out, that old
canard about them needing to make profits to support their R&D is false:

http://onlinelibrary.wiley.com/doi/10.1111/j.1536-7150.2011.00820.x/abstract

"Pharmaceutical firms attribute high prices and high profits to costs
associated with researching and developing the next generation of
life-saving drugs. Using data from annual reports, this article tests the
validity of this claim. We find that while pharmaceutical firms do invest in
R&D, they also enjoy strong rents; between 1988 and 2009, pharmaceuticals
enjoyed profits of 3 to 37 times the all-industry average, depending on the
years, while investing proportionately less in R&D than other high-R&D
firms. Costs of pharmaceutical drugs have successfully flown below the radar
in much of the current health care debate, with producers managing to
obstruct alternative sourcing as well as payment cuts. While health care is
examined for savings in other areas, sustained high pharmaceutical profits
suggest that as a new health care policy develops in the U.S., the
pharmaceutical industry should not be excluded from examination for
significant savings in health care costs."

Turns out they spend twice as much on advertising as they do on R&D.

[RichL]

"Spender" <Spe...@Mars.org> wrote in message

news:gu30p8ptci3lhb115...@giganews.com...

> On Sat, 11 May 2013 21:55:20 -0400, "RichL" <rple...@yahoo.com> wrote:
>
>>"Spender" <Spe...@Mars.org> wrote in message
>>news:2hdto8d1bn1dcjitk...@giganews.com...
>>>

>>> How could you expect anything different? Governments that put an iron
>>> boot on the throat of the medical industry produce two things:
>>>
>>> 1: Lower costs for themselves.
>>
>>You mean there are actually governments that advocate on behalf of their
>>own
>>citizens? Mercy me!
>

> Force is force, not advocacy.

And negotiation is not force.

>
>>> 2: Higher costs for Americans.
>>
>>Yes, our government refuses to negotiate with pharmaceuticals, even for
>>government-run programs such as Medicare and Medicaid. However, for some
>>odd reason the Veterans Adminstration is permitted to negotiate, and it
>>achieves prices that are 48% less than the prices paid for participants in
>>Medicare Part D.
>

> Excuse me for deleting the rest, but the answer here is very simple if you
> stop to think about it. Legalize the purchase of prescription drugs from
> foreign pharmacies, namely Canadian pharmacies. Doing so would reveal the
> true economics behind the market.
>
> The market in America is artificially high *because* of the government.
> Get the government out of the way and you'll see the true market.

Right. Let's get out of a system in which our own government refuses to
participate; let's buy our drugs from foreign countries in which governments
have negotiated prices for their own citizens.

And this would be a "true" market? What are you smoking?

[RichL]

"Spender" <Spe...@Mars.org> wrote in message

news:7na3p8dc0clfl08qa...@giganews.com...

> On Sun, 12 May 2013 18:20:45 -0400, "RichL" <rple...@yahoo.com> wrote:
>
>>"Spender" <Spe...@Mars.org> wrote in message

>>news:gu30p8ptci3lhb115...@giganews.com...

>>>
>>> Force is force, not advocacy.
>>
>>And negotiation is not force.
>

> Regulations which make the sale of anything damn near impossible without
> express permission is not negotiation, it is extortion.

>
>>> The market in America is artificially high *because* of the government.
>>> Get the government out of the way and you'll see the true market.
>>
>>Right. Let's get out of a system in which our own government refuses to
>>participate; let's buy our drugs from foreign countries in which
>>governments
>>have negotiated prices for their own citizens.
>>
>>And this would be a "true" market?
>

> I didn't say it would *be* the true market, I said it would *reveal* the
> true market. Without the protectionism in America, pharmaceutical
> companies could not count on Americans to pay the freight for drug
> research. Prices in America would have to go down. As a result,
> pharmaceutical companies would have to raise prices over the entire (let's
> say North American) market to make the same profits. The Canadian
> manipulation would no longer work because it would effectively be limiting
> the potential revenue over the entire North American market. Drug
> companies would then just refuse to market drugs to Canada altogether and
> focus on the markets where prices are not controlled.
>
> In practice, freeing the market would mean that American prices would go
> down and Canadian prices would go up.

Exactly the same objective would be achieved by allowing our government to
negotiate just like everybody else. That's called a level playing field,
and it has the advantage of still allowing the FDA to exercise its proper
functions. Simpler, better.

[RichL]

"Spender" <Spe...@Mars.org> wrote in message

news:f5d5p8h1bj71ral31...@giganews.com...

> On Tue, 14 May 2013 16:35:17 -0400, "RichL" <rple...@yahoo.com> wrote:
>
>>"Spender" <Spe...@Mars.org> wrote in message

>>news:7na3p8dc0clfl08qa...@giganews.com...

>>>
>>> In practice, freeing the market would mean that American prices would go
>>> down and Canadian prices would go up.
>>
>>Exactly the same objective would be achieved by allowing our government to
>>negotiate just like everybody else. That's called a level playing field,
>>and it has the advantage of still allowing the FDA to exercise its proper
>>functions. Simpler, better.
>

> If every country has absolute power to legislate pricing then there will
> no longer be any real market at all. Innovative businesses can't survive
> in such an environment.

You continue to misrepresent negotiation. Do you really think the
pharmaceuticals are helpless in this process?

No country has "absolute power to legislate pricing". What they do is
dicker -- the epitome of the so-called "free market".

A company must make a profit. All it has to do is set a price below which
it will choose to withdraw itself from a given country's market, and stick
by the decision to withdraw if it can't negotiate a price at or above that
line. The fact that pharmaceuticals operate wherever they can indicates to
me that they're nowhere near that lower limit. And if I'm mistaken about
this, the only reason they go ahead in sell in these countries anywhere is
that they know they'll make up the difference (and then some) from us
suckers in the US.

[RichL]

"Spender" <Spe...@Mars.org> wrote in message

news:tav7p85jvsac3caej...@giganews.com...

> On Tue, 14 May 2013 19:26:18 -0400, "RichL" <rple...@yahoo.com> wrote:
>
>>"Spender" <Spe...@Mars.org> wrote in message

>>news:f5d5p8h1bj71ral31...@giganews.com...

>>>
>>> If every country has absolute power to legislate pricing then there will
>>> no longer be any real market at all. Innovative businesses can't
>>> survive
>>> in such an environment.
>>
>>You continue to misrepresent negotiation. Do you really think the
>>pharmaceuticals are helpless in this process?
>

> When the possibility exists that they will have no market at all in a
> country, yes they are pretty much powerless.

And if prices rise to the degree that I can't afford a given product, I am
powerless. So it's fine for me to be powerless but not for a
megapharmaceutical to be powerless?

One important factor that you fail to mention is that US patent law
essentially grants a monopoly to pharmaceuticals for a grossly long time
period. That monopoly artificially drives up prices and prohibits any
free-market principles from operating in the first place.

>
>>No country has "absolute power to legislate pricing". What they do is
>>dicker -- the epitome of the so-called "free market".
>

> A free market lets the consumer decide what he wants without the
> government artificially raising the price.

What? First off, foreign governments negotiating drug prices *lowers* the
price. Second, there *is* no free market for these commodities (see above).

>
>>A company must make a profit. All it has to do is set a price below which
>>it will choose to withdraw itself from a given country's market, and stick
>>by the decision to withdraw if it can't negotiate a price at or above that
>>line. The fact that pharmaceuticals operate wherever they can indicates
>>to
>>me that they're nowhere near that lower limit. And if I'm mistaken about
>>this, the only reason they go ahead in sell in these countries anywhere is
>>that they know they'll make up the difference (and then some) from us
>>suckers in the US.
>

> Did you fail to notice that that is exactly what I initially said? When
> it comes to drugs, it is the first pill that costs hundreds of millions.
> All the rest are relatively cheap to make. Pharmaceuticals do make a
> profit over their production cost in countries that dictate prices. The
> development costs are made up in countries that don't.

Pharmaceuticals spend much more on advertising than they do on R&D. That
indicates to me that they have cash to spare, especially given the nature of
those advertisements, laden with warnings. No rational person would seek a
prescription medication based on those ads.
>
> It isn't that Canada is doing anything wrong. American protectionism
> makes it a very good move on their part.

I fail to see how America refusing to negotiate with drug companies
constitutes protectionism.

[Claude V. Lucas]

In article <rdeap89miorl9reba...@giganews.com>,
Spender <Spe...@Mars.org> wrote:

>On Wed, 15 May 2013 18:23:34 -0400, "RichL" <rple...@yahoo.com> wrote:
>
>>"Spender" <Spe...@Mars.org> wrote in message

>>news:tav7p85jvsac3caej...@giganews.com...

>>>
>>> When the possibility exists that they will have no market at all in a
>>> country, yes they are pretty much powerless.
>>
>>And if prices rise to the degree that I can't afford a given product, I am
>>powerless. So it's fine for me to be powerless but not for a
>>megapharmaceutical to be powerless?
>

>I would bet there are many things in this world that you can't afford.
>That doesn't make you powerless, it simply means you aren't a part of the
>market. The economics work that way for many things, such as
>Lambourgini's and Ferrari's. There simply is no way for those companies
>to make the product cheap enough for the general market.
>
>Drugs don't work that way. Once the development costs are made up, most
>drugs become just another product, and often relatively cheap to
>manufacture. Holding the price at an exorbitant level would be
>unprofitable. They can make far more in the long run by pricing the
>product for the general market.
>
>And don't forget that while a patent last for 17 years, much of that time
>can be consumed in the process of getting the drug approved for sale,
>before which they aren't making any money. That can leave a pharmaceutical
>company with only 10 years or less to make up the development costs.

>
>>One important factor that you fail to mention is that US patent law
>>essentially grants a monopoly to pharmaceuticals for a grossly long time
>>period. That monopoly artificially drives up prices and prohibits any
>>free-market principles from operating in the first place.
>

>1: That is an earned monopoly, and 2: as I illustrated, the period of time
>they have to make their profit isn't as long as the patent term.

>
>>> A free market lets the consumer decide what he wants without the
>>> government artificially raising the price.
>>
>>What? First off, foreign governments negotiating drug prices *lowers* the
>>price. Second, there *is* no free market for these commodities (see above).
>

>The prices in *America* are artificially raised. If Americans were
>legally allowed to import drugs then they would buy them from the cheaper
>source. That in turn would force drug manufacturers to change pricing in
>both countries.
>
>As for earned monopolies not being a free market. Oh well. That is the
>price we pay for innovation. How much work would you do to develop a drug
>if the very next day anybody could take your formula and manufacture it
>under their own brand name?

>
>>> Did you fail to notice that that is exactly what I initially said? When
>>> it comes to drugs, it is the first pill that costs hundreds of millions.
>>> All the rest are relatively cheap to make. Pharmaceuticals do make a
>>> profit over their production cost in countries that dictate prices. The
>>> development costs are made up in countries that don't.
>>
>>Pharmaceuticals spend much more on advertising than they do on R&D.
>

>Source?

>
>>That
>>indicates to me that they have cash to spare, especially given the nature of
>>those advertisements, laden with warnings. No rational person would seek a
>>prescription medication based on those ads.
>

>Actually a rational person would because they would know how to read such
>data and make an informed choice.

>
>>> It isn't that Canada is doing anything wrong. American protectionism
>>> makes it a very good move on their part.
>>
>>I fail to see how America refusing to negotiate with drug companies
>>constitutes protectionism.
>

>The law forbidding the importation of drugs is what constitutes
>protectionism. But it's all for our own good really. Canadians are known
>for two things, hockey and lacing their drugs with rat poison. Hail the
>FDA for keeping us safe. Unable to afford the drugs... but that's beside
>the point... RAT POISON!!!

Rat poison can be good for you.

[RichL]

"Spender" <Spe...@Mars.org> wrote in message

news:rdeap89miorl9reba...@giganews.com...

> On Wed, 15 May 2013 18:23:34 -0400, "RichL" <rple...@yahoo.com> wrote:
>
>>"Spender" <Spe...@Mars.org> wrote in message

>>news:tav7p85jvsac3caej...@giganews.com...

>>>
>>> When the possibility exists that they will have no market at all in a
>>> country, yes they are pretty much powerless.
>>
>>And if prices rise to the degree that I can't afford a given product, I am
>>powerless. So it's fine for me to be powerless but not for a
>>megapharmaceutical to be powerless?
>

> I would bet there are many things in this world that you can't afford.
> That doesn't make you powerless, it simply means you aren't a part of the
> market. The economics work that way for many things, such as
> Lambourgini's and Ferrari's. There simply is no way for those companies
> to make the product cheap enough for the general market.

So now pharmaceuticals are in the same category as Lambourghinis and
Ferraris? Good grief.

>
> Drugs don't work that way. Once the development costs are made up, most
> drugs become just another product, and often relatively cheap to
> manufacture. Holding the price at an exorbitant level would be
> unprofitable. They can make far more in the long run by pricing the
> product for the general market.

You might convince me that drug costs decrease dramatically when the
development costs are made up (as opposed to when the patent runs out) if
you had a concrete example.

>
> And don't forget that while a patent last for 17 years, much of that time
> can be consumed in the process of getting the drug approved for sale,
> before which they aren't making any money. That can leave a pharmaceutical
> company with only 10 years or less to make up the development costs.

As of 1995, the patent term has been extended to 20 years.

>
>>One important factor that you fail to mention is that US patent law
>>essentially grants a monopoly to pharmaceuticals for a grossly long time
>>period. That monopoly artificially drives up prices and prohibits any
>>free-market principles from operating in the first place.
>

> 1: That is an earned monopoly, and 2: as I illustrated, the period of time
> they have to make their profit isn't as long as the patent term.

What is an "earned monopoly"? Whatever it is, free-market principles only
come into play (if at all) when the patent runs out.

>
>>> A free market lets the consumer decide what he wants without the
>>> government artificially raising the price.
>>
>>What? First off, foreign governments negotiating drug prices *lowers* the
>>price. Second, there *is* no free market for these commodities (see
>>above).
>

> The prices in *America* are artificially raised. If Americans were
> legally allowed to import drugs then they would buy them from the cheaper
> source. That in turn would force drug manufacturers to change pricing in
> both countries.

Well, that would bypass the FDA as well. I'm not willing to take on the
word of some foreign government that a given pharmaceutical is safe, or that
it's actually manufactured by the advertised company.

>
> As for earned monopolies not being a free market. Oh well. That is the
> price we pay for innovation. How much work would you do to develop a drug
> if the very next day anybody could take your formula and manufacture it
> under their own brand name?

The patent period is excessive, and it artificially inflates the cost.

>
>>> Did you fail to notice that that is exactly what I initially said? When
>>> it comes to drugs, it is the first pill that costs hundreds of millions.
>>> All the rest are relatively cheap to make. Pharmaceuticals do make a
>>> profit over their production cost in countries that dictate prices. The
>>> development costs are made up in countries that don't.
>>
>>Pharmaceuticals spend much more on advertising than they do on R&D.
>

> Source?

http://www.citizen.org/publications/publicationredirect.cfm?ID=7065

"The drug industry's top priority increasingly is advertising and marketing,
more than R&D. Increases in drug industry advertising budgets have averaged
almost 40 percent a year since the government relaxed rules on
direct-to-consumer advertising in 1997. Moreover, the Fortune 500 drug
companies dedicated 30 percent of their revenues to marketing and
administration in the year 2000, and just 12 percent to R&D. "

>
>>That
>>indicates to me that they have cash to spare, especially given the nature
>>of
>>those advertisements, laden with warnings. No rational person would seek
>>a
>>prescription medication based on those ads.
>

> Actually a rational person would because they would know how to read such
> data and make an informed choice.

There are no data to read in television and radio ads.

>
>>> It isn't that Canada is doing anything wrong. American protectionism
>>> makes it a very good move on their part.
>>
>>I fail to see how America refusing to negotiate with drug companies
>>constitutes protectionism.
>

> The law forbidding the importation of drugs is what constitutes
> protectionism. But it's all for our own good really. Canadians are known
> for two things, hockey and lacing their drugs with rat poison. Hail the
> FDA for keeping us safe. Unable to afford the drugs... but that's beside
> the point... RAT POISON!!!

So who would be granted authority to import the drugs? Individuals?
Companies?

https://en.wikipedia.org/wiki/Online_pharmacy#Risks_and_concerns

[RichL]

"Spender" <Spe...@Mars.org> wrote in message

news:81ddp8htu9pmsp55m...@giganews.com...

> On Thu, 16 May 2013 18:16:34 -0400, "RichL" <rple...@yahoo.com> wrote:
>
>>"Spender" <Spe...@Mars.org> wrote in message

>>news:rdeap89miorl9reba...@giganews.com...

>>>
>>> I would bet there are many things in this world that you can't afford.
>>> That doesn't make you powerless, it simply means you aren't a part of
>>> the
>>> market. The economics work that way for many things, such as
>>> Lambourgini's and Ferrari's. There simply is no way for those companies
>>> to make the product cheap enough for the general market.
>>
>>So now pharmaceuticals are in the same category as Lambourghinis and
>>Ferraris? Good grief.
>

> When interferon cost $1 million per gram to manufacture, yes.

That's completely atypical.

>
>>> Drugs don't work that way. Once the development costs are made up, most
>>> drugs become just another product, and often relatively cheap to
>>> manufacture. Holding the price at an exorbitant level would be
>>> unprofitable. They can make far more in the long run by pricing the
>>> product for the general market.
>>
>>You might convince me that drug costs decrease dramatically when the
>>development costs are made up (as opposed to when the patent runs out) if
>>you had a concrete example.
>

> It's obviously not just development costs. There is also the boatload of
> money needed to cover the inevitable lawsuits because all drug have
> side-effects.
>
> And the boatload of earned profits to be made, part of which fuels further
> research and part of which pays the big brains and company shareholders.
> That's only fair. How many non-profit pharmaceutical companies are in
> your portfolio?

>
>>> And don't forget that while a patent last for 17 years, much of that
>>> time
>>> can be consumed in the process of getting the drug approved for sale,
>>> before which they aren't making any money. That can leave a
>>> pharmaceutical
>>> company with only 10 years or less to make up the development costs.
>>
>>As of 1995, the patent term has been extended to 20 years.
>

> Even better, and no doubt as a response to pharmaceutical patent holders
> being robbed by the lengthy approval process. The fact remains it is
> *their* drug.

Most new drugs are minor tweaks of the existing varieties. Current patent
practice generally, and specifically as applied to pharmaceuticals, is
absurd. You're not supposed to be able to patent things that are "obvious
to those skilled in the art". Yet the bar keeps being lowered.

>
>>> 1: That is an earned monopoly, and 2: as I illustrated, the period of
>>> time
>>> they have to make their profit isn't as long as the patent term.
>>
>>What is an "earned monopoly"? Whatever it is, free-market principles only
>>come into play (if at all) when the patent runs out.
>

> Only the copyright holders can legally sell Beatles albums. That is an
> earned monopoly. It doesn't matter much if the right is protecting a
> song, a program or a chemical formula. Though patents are shorter than
> copyrights specifically because it is considered a just balance between
> the rights of the creators and the desire to further science generally.

"Considered a just balance" by those whose campaigns are paid for by pharma
and other large companies!

>
>>Well, that would bypass the FDA as well. I'm not willing to take on the
>>word of some foreign government that a given pharmaceutical is safe, or
>>that
>>it's actually manufactured by the advertised company.
>

> Then you are free to buy it at a higher price. Those who trust that
> Canada actually isn't a third-world country with no concept of consumer
> protection could get the lower price.
>
> But you missed the point really. The market would become uniform and the
> drugs would be sold in America for the same price. It would be the only
> economic alternative, short of a government sponsored safety smear
> campaign against Canada.

So having our government negotiate drug prices like all other countries do
isn't an economic alternative?
>
> Granted, the FDA dragging their asses did save the U.S. from thalidomide,
> whereas Canada and Europe were smacked hard. But seriously, are you
> really going to suggest that Canadian and European drugs are generally the
> devil's work? That's a tad paranoid, if not downright xenophobic.

>
>>The patent period is excessive, and it artificially inflates the cost.
>

> It doesn't seem excessive to me at all. It's one generation, minus the
> approval process in which to make a decent profit off of an innovation.

>
>>>>Pharmaceuticals spend much more on advertising than they do on R&D.
>>>
>>> Source?
>>
>>http://www.citizen.org/publications/publicationredirect.cfm?ID=7065
>

> If true, then you would agree that their advertising is necessary in order
> for them to make a profit. What good is a drug if people don't know it
> exists?

Doctors knew drugs existed long before the companies decided to advertise
directly to consumers.

>
>>> Actually a rational person would because they would know how to read
>>> such
>>> data and make an informed choice.
>>
>>There are no data to read in television and radio ads.
>

> Other than "Got a problem, then this drug might help". Don't forget that
> much of the drug advertising is for so-called lifestyle drugs that are
> more or less optional. If those lifestyle drugs make the company a lot of
> money then that means the suggested 12% spent on R&D for the company as a
> whole is a higher number.

>
>>> The law forbidding the importation of drugs is what constitutes
>>> protectionism. But it's all for our own good really. Canadians are
>>> known
>>> for two things, hockey and lacing their drugs with rat poison. Hail the
>>> FDA for keeping us safe. Unable to afford the drugs... but that's
>>> beside
>>> the point... RAT POISON!!!
>>
>>So who would be granted authority to import the drugs? Individuals?
>>Companies?
>

> The whole intent of what I have been saying is that individuals would be
> legally allowed to buy drugs from foreign countries. But they very
> quickly wouldn't need to. Prices would come down in America to compete
> with the prices elsewhere.

So there would be no mechanism to assure that the drugs came from the
countries that were claimed?