Will ObamaCare kill new drug advancements?

Discussion in 'Healthcare/Insurance/Govt Healthcare' started by Wiseacre, Jul 2, 2012.

  1. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Obama Care Will End Drug Advances and Europe's Free Ride (Unless China Steps in) - Forbes

    snippet:

    Ninety five percent of the new drugs coming on the market are developed for sale in the United States. They are paid for by American consumers, while other countries, such as Canada, Germany and France, free ride at our expense. The United States is the last major country that allows the market to set prices high enough to compensate pharmaceutical companies for their R&D investments. Obama Care will increasingly control pharmaceutical prices as costs rise and federal and state funds fall short. Major pharmaceutical advances will stop (How well will government labs work?), and the rest of the world will lose along with Americans.

    When President Eisenhower suffered a massive heart attack in September of 1955, his doctors could only inject a pain killer and prescribe bed rest. When Vice President Cheney suffered heart attacks almost a half century later, he was given powerful blood thinners, a stent was inserted, and he was released from the hospital shortly thereafter. Before acid inhibitors, ulcer sufferers had only operations that cut off ulcerated portions of their stomachs. Before AZT drugs, an HIV positive test was a death sentence. tPA saved millions of heart attack and stroke victims. HPV is an effective vaccination against cervical cancer. Anti-psychotic medications allow patients with schizophrenia to live productive lives. The list goes on and on, but, in the future, it might get shorter and shorter.

    According to the Britannica Encyclopedia, a new drug requires that 5,000–10,000 chemical compounds undergo laboratory screening for each new drug approved for use in humans. Of the 5,000–10,000 compounds that are screened, approximately 250 will enter preclinical testing, and 5 will enter clinical testing. The process from discovery to marketing takes 10 to 15 years, and only one out of every ten thousand discovered compounds gains approval. Although pharmaceutical companies routinely claim that new drugs cost an average of a billion dollars, the true figure is between $4 and $12 billion when the costs of failures are included.

    Pharmaceutical companies finance new product development by devoting a higher percentage of their revenues than any other major industry (an astronomical 20 percent) to R&D. It is the American consumer who pays these costs by buying the new drugs at prices that cover these R&D expenses. Free-riding Canadian, German, French and Dutch consumers buy at much lower prices and avoid contributing to the costs of product development. China, Russia, India and most of the developing world ignore intellectual property rights and knock off the drugs for sale in domestic markets with no compensation to the developer.

    In the United States, by and large, the market still sets prices of pharmaceuticals. In the United Kingdom, Canada, and Europe, the state either regulates prices or is the sole buyer, as studies by the AARP and the Senate Committee on Aging show. The Congressional Budget Office (CBO) finds that average prices for prescription drugs in the United States are 50 to 100 percent higher than in other industrialized nations, even though generic drugs sell for less. A single dosage of Nexium (the Purple Pill) sells for $4 in the United States and for under a dollar in France and Germany. According to OECD statistics, Americans spend $983 per capita on prescription drugs, including cheaper generics, while the Germans and French pay $680 and $634, respectively. Americans do not appear to be over medicated as Pharma’s critics charge. They just pay higher prices.


    Me: You have to wonder how much Big Pharma will drastically cut back on it's R&D, thereby limiting the drug benefits that everyone might've received in the future. The left always assumes they can reduce the big profits that big corps make without any consequences. But those corps always adject, usually by reducing streamlining costs even more to just those endeavors that are the most profitable. I don't think you can cut R&D costs much unless you cut back on the testing req'ts; not sure anybody wants that.

    So, less innovation, and health care will not be as good as it might've been in the future. And we lose more jobs in the sector too, but what the hell, we cut into their profits, right?
     
  2. Staidhup
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    Staidhup Gold Member Supporting Member

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    Good question, my guess is that Pharma will move the balance of production off shore, and retain R&D at current levels.
     
  3. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Seriously? You want your heart meds developed and tested in Guatemala?
     
  4. theDoctorisIn
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    theDoctorisIn Senior Mod Staff Member Senior USMB Moderator

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    Well, another reason why most new prescription drugs are developed in America is because of the 35 billion dollars in federal grants that the government gives each year.
     
  5. tererun
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    tererun BANNED

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    I often wonder about these supposed claims, and the idea that pharmaceuticals are hurting. If they are hurting then why do they give out so much free shit, and lobby with so much money? Why do they pay doctors to prescribe their medicine over their competition when they supposedly barely make enough money to get by? Why are they even bothering to sell on foreign soil where they should be taking a loss if we are to believe this article?

    Now the reason is the markup. It does not take a lot of money to make a gram of their material. I don't know any pharmaceutical that costs more than 1 US dollar to make a gram of pure. I know, that uis pure manufacturing costs, but think about the realities of that. Many medicines are measured out in pills are less than a gram. You might be talking 5 or 10 mg of the stuff in a single pill. You are talking about pills that may cost a cent or two to actually manufacture at the high end.

    Let us say you have a month prescription to something. Let us say that is one pill a day, 30 pills. Total manufacturing cost .30 cents. let us say the prescription runs 60 dollars retail. This is actually very low if you consider the cost of new drugs in america. Each prescription nets a profit of 59.70. Now let us say you get a million people in the us taking them. Then you end up talking 59.7 million dollars of profit a month. You multiply that by 12 and you have 716.4 million in profit. How long does that take to total the estimate of 1 billion, or even 4-12 billion? That is not counting government reearch grants, and charity research grants which often offset the costs of research. your own article says a pharmaceutical puts 20 percent of it's profits into research. This leaves 80 percent of the mony it earns for other things. Considering research would really be the cost of materials for another business types, 20 percent is pretty decent when you consider you might be talking about a 30 percent profit marghin over costs of materials for other businesses. You are talking an 80 percent profit margin on sales. That is fucking awesome.

    Sorry, but you are going to need to do a little better than an article made to provoke sympathy for the pharmaceutical companies who do really great in america and just great in other countries. What they do to people is to hold them hostage by their health. If you want to survive you will pay us whatever we ask for our product. There is a reason pharmaceuticals are a great investment, and it is not because they are hurting. They would make profit if they sold each pill for a dollar, they just want more, and they use people like you to threaten americans into thinking that if we do not shell out huge money to them we are all going to die. There is another industry that has this insane markup and also gets a lot of government money, it is called the professional sports industry. At least there if you don't buy their shit you don't die. you just can't have cable or satellite, purchase a lot of clothing, or buy any alcohol.
     
  6. tererun
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    tererun BANNED

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    You mean the 35 billion in money they never have to give back that covers their R&D costs, along with the money you could get from charities that do the same thing. Wait, i thought they just had to put out all that R7D money and never got any help.

    I always love the bullshit whining of the rich as to why we should let them keep raping others.
     
  7. tjvh
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    tjvh Senior Member

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    Like a monkey trying to explain how to make a banana split.
     
  8. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Never said they were hurting, just saying they'll do whatever it takes to maximize profits. If you screw with 'em, there will be consequences that you should think about. And BTW, they put 20% of their REVENUES into research, not profits. If you cut the revenues, guess what? Less research. Less innovation and better drugs down the road. But you don't really care about that, do you? For you it's all about fucking the rich guys and big corps.
     
  9. old navy
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    old navy <<< Action Figures

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    The high costs of R&D and executive salaries have been overtaken by advertising. In the 1990s, congress allowed Big Pharma to advertise their products. Not only do the commercials cost lots, but the patient demands the latest and greatest drug they saw on TV and doc complies. Three minute commercials on Cymbalta or Viagra are not needed. Add to that the GSK scandal and the industry is shooting themselves in the foot.
     
  10. onecut39
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    onecut39 VIP Member

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    "American" drug companies spend 3 times as much on marketing as they do on R&D.
     

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