Quote:
Originally Posted by justplugit
Spence, are you for price control???
You are wrong about negotiations, every hospital in the country, community,
county, state and fed has a formulary and belongs to a buying group who put out bids for all compatiable drugs.
As for the price of exclusive drugs, their price is not set on the active
ingredients but on all the costs from finding a compound to bringing it
to market. It costs many millions of dollars to find a compound, test it,
do clinical trials under FDA regulations and getting approval takes years
under stringent government regulations.
Drugs represent 10.5 cents of medical costs and saves millions in
keeping patients out of hospitals. Diseases like pneumoniae, heart failure,
diabetes, depression etc. can now be treated at home.
Pharma is a big political football because people don't want to be sick and
have to pay for it. Of course they won't think twice about buying a six pack,
$5 a day cigs or a bottle of Jim Bean but moan about paying $5 a day
for a drug that gives them quality of life, keeps them out of the hospital
and prolongs their life. Politicians know it and slam Pharma knowing they can
make points because it is popular to do so by the folks.
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I'm well aware of the business process regarding FDA regulated product development.
Here's the issue. There's competition for drug prices inside the US but the development is done for a global market. All that R&D funding to create the next category killer drug is being subsidized by US consumers because drugs are sold at lower costs (often via price controls) in pretty much every other nation. There really isn't a lot of real negotiation. This is government regulation that the industry is highly dependent on.
Hence my comment being in context of "market forces".
-spence