Pharma Industry: Life-Saving Innovators or Greedy Capitalist Pig-Dogs?

[304065]

Chris Campbell sparked a new topic over on the lawyer-bashing thread that is worthy of consideration by the high-minded denizens of this electronic shag-carpeted conversation pit.

We were talking about the "Greed of the Pharma Industry" and Chris raised the following objections:

(a) their tight grip on the loins (and wallets) of our politicians by virtue of their incredible lobbying power in Washington;

(b) the fact that we in the U.S. pay substantially more for the identical drugs than our European and Canadian friends do, because their governments and populations would not tolerate what we seem to bend over and accept; and

(c) that our nation's patent and trademark system props up the monopoly power of the pharma's by prohibiting competition (i.e., generics) for an excessively long duration.

You'll get no debate from me on (a). Lobbying is a reality, whether the lobbyists are employed by big pharma or "interest groups" like AARP.

(b) The rest of the world imposes price controls. With the exception of some enviable apartments in Manhattan, I can't think of any circumstance where the government intereferes with the market, nor should it. This is related to my point below, which is that. . .

(c) the Patent and Trademark system DOES prohibit competition, and it SHOULD. The drug development process takes literally dozens of years to bring a "blockbuster" drug to market, which costs BILLIONS of dollars. Innovations do not just happen by chance: they are the result of thousands of people working together from compound identification, through three phases of clinical trials, to bring the drug to market. Because we want, as a society, to ENCOURAGE that kind of development, we grant a legal monopoly, the PATENT, which should allow the manufacturer to charge whatever the market will bear. Inelasticity of supply caused by the government protecting your composition of matter means the supply curve is VERTICAL-- you can charge whatever you want, and if the resources are there to pay, that's what you make!

There are folks who think that lifesaving or life-improving drugs should become public domain. Jonas Salk, who is credited with developing the Polio vaccine, refused to patent it, claiming, "There is no patent. Could you patent the Sun?" Pharma companies manufactured it and it was administered around the world FREE of charge. Spurred by Salk's altruism, people think that big pharma companies should do the same.

Efforts by our own government to permit reimportation of pharmacetuicals are being pushed by various senior groups. The trouble is, if you allow reimportation from a country that has price controls, you have effectively implemented price controls here, to say nothing of the clinical danger involved, e.g. we've all read in the NYT about the nice seniors who take the bus, but what about the ripoff shops that spring up in Mexico that will resell potentially harmful knockoffs?

Everyone *****es about the price of prescription drugs as an increasing component of the monthly budget of a person on a fixed income. Where is the lobbying organization to reduce the senior's rent? Where are the price controls for the grocery store or the gas station? Because big pharma is highly visible, it's an easy target.

To me, limiting pharma company profits will remove the incentive for drug development, and that's a lose-lose for the whole world.
If the shareholders of XYZ pharma want to give the drugs away, that's their choice, not the government's.

The new Medicare prescription drug benefit kicks in as a fully funded benefit (not the prescription discount card, which is a transitional mechanism) in 2006. The government may NEGOTIATE the prices of drugs with manufacturers, just the same way that a PBM does now. . . but that's not the same as a cap on profitability.

Any divergent views?

[lendaddy]

Well said John, can't add much. Overdispensing is one area I feel has also increased Insurance costs. Don't get me wrong, it's not the doctors fault, people just won't have it any other way. I mean if I get heartburn I can go and pay my $10 for what like $400 worth of drugs and for what? So I can eat Mexican food? This is considered a neccesity? I personally have over $2000 I am sure worth of drugs in my cabinet I never used or quit using which were prescribed to me, and I'm only 30! Imagine the stashes aunt Martha has. Again I say if you think an industry is gouging you I suggest you offset said gouging by purchasing their stock and cashing the dividend checks. It will likely open your eyes.

[arcsine]

I have spent more than a few years working at biotech/big-pharma companies and there are few things I learned.

It takes 12+ years and approximately $350,000,000 to bring a drug through research and clinical trials to market. So yes, there has to be some sort of profit incentive to the companies to even bother.

One of the first questions asked regarding a new compound prior to even advancing it in the lab is "What is the indication and the market?". So very early on, only drugs that have the potential to be lucrative are allowed to progress through the pipeline. I am bothered with this as if you are an unfortunate soul with a rare disease, then chances of a therapy ever becoming available are slim to none, not because it is rare but because there is no money in it.

But IMHO, the whole system is corrupt. As an example, I recently had a yearly physical. No big proceedures, no pharmacueticals, just check me out and make sure nothing major is wrong. Spent 20 minutes with a doctor, had some blood drawn and some tests run: total cost = $1000. Incomprehensible to me how that cost to me is justified.

[turbocarrera]

I just don't think that the price should be determined by simply seeing what the market will bear. There's gotta be a more humane way that that. Some of new cancer treatments can cost 20k/month or more.. sure the Rockefellers can afford it, but if I end up needing those drugs, well - I'm just gonna die. Not that dieing is so bad, at least I get to stop paying these massive Canadian health care taxes..

[304065]

Hmm, some good stuff here.

Lendaddy, I particularly agree that "lifestyle" drugs should not be eligble for reimbursement unless you've got a real problem, like GERD;;

Gary, what about the Orphan Drug Act, that provides for a tax credit for part of the clinical testing expenses, for drugs targeted at diseases affecting fewer than 200,000 individuals? According to FDA, over 200 drugs and biolgicals have been brought to market since the 1983 passage of the act, vs. under 10 for the decade before.

Or is it still not enough incentive vs. developing a large-market therapeutic, like a cancer drug?

Tony, from the little I know about estate taxes up there, even a visitation from the grim reaper himself won't prevent you from funding Health Canada!

[lendaddy]

Tony, like alot of people, your heart is in the right place, but you shut off the common sense. There is this weird thing going around that everyone "deserves" the best care possible. An altruistic statement to be sure, but illogical to the point of laughter. Why do you think Majic Johnson is still alive and well? I have read but cannot recall the price tag on his life extending cocktail, WOW. Should we all pony up for all the HIV infected in this country? How about the care Christopher Reeves has received? It would literally break the bank. People die, and people who've accumulated more wealth have better access to things of this nature. Thats's life, deal with it. Medicare (you & me) paid over 6 figures to keep my grandfather alive for a couple years extra. I loved the man, but it was asinine. No one deserves anything but freedom and liberty, the rest is what you make of it.

[turbocarrera]

Well Lendaddy, when people are sick, they get desperate. Desperate people do desperate things.. I believe in doing my absoloute best to help people less fortunate than myself, I consider that to be common sense.

[lendaddy]

OK, I can get you in touch with some people who cannot afford some expensive care. Just let me know where to send the bill, or is it my address

In all seriousness, you have good intentions, they just aren't realistic.

[turbocarrera]

hehe, i was waiting for that one

I may not be able to afford to pay that persons bill myself, but you get a bunch of people to chip in and its not so bad.

Here's an idea, quit paying for public education. Quit paying for roads. Quit paying for defense. Disband the FDA. Eliminate the gov't and any public service of any kind. Let capatalism rule with complete autonomy. I mean, Johnson & Johnson knows whats best for you. Or is that being unrealistic?

[304065]

Ahh, "Pharmaceutial Detailers!"

I have known many, one of whom used to be a TV news reporter before she found her true calling!

The average detailing visit is approximately TWO minutes! That's not a lot of time to go through the complete prescribing profile, safety, indications, common side effects, and pharmacoeconomics!

Mostly they give some clinical information, leave some samples, and then are gone. It's unfortunate, but with the advent of managed care, the doc simply has so many patients to see that there's no time.

All right Tony, you are becoming "Openly Canadian!" I take my orders from only ONE Johnson . . . my own!

[turbocarrera]

sorry John, my bad

[Superman]

I thought it was the liberals who were pessimistic. We're suggesting that the technology and the resources are available for pretty much everyone to have darned good medical care. Not ridiculous, but very good medical care. The doctor and phlebotomist had the time for the procedures necessary for Gary's physical exam. That's not the problem. The problem is the $1000 price tag. I am a liberal and I envision good quality health care for every American, at costs we can bear. One of my conservative friends earlier lamented the notion that Magic Johnson might, due to his great wealth, be able to buy (and tie up) medical resources. So, tell me again, who is optimistic and who is pessimistic, and while you're at it also tell me who takes the position that wealth and money should not determine who gets the needed health services?

This morning on NPR I heard about a question under consideration by the AMA. A doctor wants the AMA to opine that it is not unethical for him to refuse to treat medical malpractice attorneys and their families. Apparently, malpractice insurance is solely responsible for certain doctors being unable to provide certain services in certain areas. A ski resort was mentioned wherein the physician cannot afford the malpractice insurance in order to perform certain head injury procedures, for example.

So, we've got profiteering by pharmaceutical companies and by many other for-profit health care corporations (who can blame them....it's only human health we're talking about), we've got opportunism by the legal community...... The resources are there. We can feed the world, and we can provide basic medical care to all Americans. right now, we are looking at the potential for world peace. Yes, I know about terrorism. Shut up for a moment about that. We have the means and the opportunity....the choice....to bring about world peace.

Yeah, I'm one of those pathetic, dark, critical, morose liberals. And very confused.

[lendaddy]

Sup, a serious question. lets say for the sake of argument that the government ran EVERY aspect of the health care system since the beginning. Do you believe that we would have

A- More medical advancements and life saving drugs than we currently have.

B- Less

C- Same

Explain.

[turbocarrera]

Originally posted by john_cramer
..the Orphan Drug Act, that provides for a tax credit for part of the clinical testing expenses, for drugs targeted at diseases affecting fewer than 200,000 individuals? According to FDA, over 200 drugs and biolgicals have been brought to market since the 1983 passage of the act, vs. under 10 for the decade before..

I'll say more, Lendaddy.

[lendaddy]

Because of the highlighted story in your post? That is still the Private companies doing the work. The government gets outta the way and things get done. Though in this case it was through tax incentives, which proves you catch more flies with honey. They coulda taken the Kerry approach and penalized the companies that don't work in these areas

[Superman]

Lendaddy, I said nothing of socialized medicine. So, there is nothing for you to defend. And if there were, you might be wise to offer your own defense rather than ask me to do it for you. Nevertheless, and in the interest of bipartison peace, and since this OT forum seems to be turned upside down this morning I'll offer this (please be seated for your safety):

My answer is "B- Less." Capitalism is an interesting and powerful fuel. Supply/demand and "enlightened self-interest" are useful mechanisms. One of (arguably the only) the benefits of applying capitalism to an industry is the deluge of capital. When the telecommunications industry was deregulated a couple of decades ago (with the promise of lower phone bills due to increase competition and getting GOVERNMENT (spit spit spit) out of the equation), the result eventually has been sharply increased phone bills and tremendouse complexity in trying to understand our phone bills, and the alternative services and costs offered by our carriers' competition. The thing that has spurred this explosion of technology and options is...you guessed it.....PROFITS. Make your own opinion about whether these new phone services (and costs and added stress from having to reply to faxes within one hour and voice mail within fifteen minutes) are a good thing or a bad thing. What I am pointing out is that when the opportunity for profits presented itself, the market was absolutely drowned in investment capital. R&D went wild.

If our health care system had been socialized all along, advances in medicines and medical procedures would not have come as far as they have, not nearly. On the other hand, it might be possible to have both. At any rate, this is my admission. Hope you are still conscious. Probably just a bad dream. A flaming liberal could not possibly exist who understands commerce and government.

Finally, I'm going to remind us once again that I have not figured out how this most important and useful of all capitalist tools, deregulation and the resultant capital injection, can be a good idea for the electric power industry. If our electric power generation and transportation systems are in need of repair or upgrade, let's do it WITHOUT adding profits, unnecessary wars between companies like we have in the deregulated airline industry, etc., etc. And no one has been able to show me how electric power deregulation will help the taxpayer or the residential consumer. It will help the investor. Period. And the extra money he gets will be the extra money you and I pay.

[Superman]

Actually, John's and Tony's are good examples of how socialized medicine can work in harmony with the development of new drugs and procedures. It can work, but we cannot have the discussion while half the country has been taught to hold their hands over their ears and shout "government is bad, business is good."

[lendaddy]

Not bad Sup. I'm proud of you. Not meant to piss you off though I'm sure it will The only thing I would say is that the examples do not show socialized medicine working in harmony with capitalism. It is simply the government getting out the way. I would give you "economical steering" but not socialism.

[turbo6bar]

I don't know any answers, but when I go to the emergency room for x-rays and 1 minute with a doctor, why does it have to cost $1300? I didn't have a stopwatch, but I estimate my stay was less then 3 hours (most of those hours were waiting for the x-rays to come back).

After my emergency room visit, I visited my personal physician to get an opinion on a sore shoulder. His price was $90. I did not complain, but he did tell me he had to hire a full-time paper pusher to handle the volumes of paperwork for filing insurance claims. 15 years ago, this was not the case. Bascially, we have a full-time employee to file the paperwork for a single family physician!!!

I am self-employed with no insurance, so you can bet Bill Clinton's stack of Playboys when I get sick, I tough it out. I do know if I get really sick, I will go to a professional.

I guess my point is where is affordable health care? It's not like you get a menu that gives you an options. It's either pay or get no service. If you can't afford to buy a 4000 SF house, you buy a smaller home or rent, but if you cannot afford medical care, you're screwed.
jürgen

[Moneyguy1]

OK...and just how much research done by the Center for Disease Control has been turned over to the Pharm industry and hence turned into profits?

Sorry, guys, most medicine advances are simply variations on a theme, a modification of existing technology, or the result of promotions making some diseases appear worse than they really are. Before there was Prilosec, did anyone ever hear of the disease? And how did our ancestors handle common heartburn? I know this may not be the best example, but just sit in front of the TV and note the number of "cures" out there that the public has been led to believe are necessary for mental/physical well being? And while you are at it, also note the potential side effects of some which read like being worse than the disease itself. Many medications such as Zoloft, simply mask what may be a far more serious problem.

I am not one for taking anything that is unnecessary. In fact, I tend to avoid Doctors like the plague. When I do visit one, it had better damn well be something non trivial. Sure, there are reasons for increases in medical care costs, but I am convinced that part of the cause are those gullible and paranoid individuals that trot off to the HMO for even a hangnail, lest it get infected and cause gangrene. Over prescription and ignorance of the limitations in medicine lead to problems that result in lawsuits, rewards and additional costs.

An occasional discomfort is to be expected; our bodies are complex machines. Leave the medical profession to serve those truly in need; put a band-aid on that blister and go on with your life. And do not expect miracles from medicine. We all ultimately die.