Article

2004-10-18 Great White North

Canada deals blow to cheap US drug imports

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Posted by trailing wife 2004-10-18 1:08:40 AM|| || Front Page|| [11129 views since 2007-05-07] Top

#1 No news here. Anybody who thought little Canada was going to provide drugs for 300 million U.S. citizens was a fool from the start.

Posted by Tom 2004-10-18 8:33:18 AM|| 2004-10-18 8:33:18 AM|| Front Page Top

#2 Tom- that's exactly right. But of course plenty of US politicians are fools. The Canadian system only works because the market is relatively small. Open it to Americans and watch the system implode.

Posted by Spot 2004-10-18 9:10:01 AM|| 2004-10-18 9:10:01 AM|| Front Page Top

#3 They must have got the word from the American drug companies that they were not going to supply them with a unlimited amount of below cost drugs. Tha Canadian government had forced the US drug makers to sell to Canada at a low cost or they would not honor the drug patents. As long as it was for the small Canadian market, they went along with it. I'd wager they just sent a message they weren't gonna go along any more if massive sales to the US continued.

Posted by Steve 2004-10-18 11:00:08 AM|| 2004-10-18 11:00:08 AM|| Front Page Top

#4 In other news, restaurants across the land inform patrons that they must, in fact, pay for their lunches.

Posted by mva30 2004-10-18 12:54:39 PM|| 2004-10-18 12:54:39 PM|| Front Page Top

#5 "I'm John Kerry and I don't approve of this message"

Posted by Frank G 2004-10-18 12:56:50 PM|| 2004-10-18 12:56:50 PM|| Front Page Top

#6 Canadian International Pharmacy Association (Cipa)

OK, now that I've picked myself up from the floor...in Polish, "Cipa" is slang for "Pussy" (the vagina, not the cat). Roughly pronounced as cheepa. So now you know.

Posted by Rafael 2004-10-18 2:12:02 PM|| 2004-10-18 2:12:02 PM|| Front Page Top

#7 None of this would be the least bit important if Medicare had been given the power to negotiate prices with the drug companies. Drug co in the US spent 40%+ of their GROSS income on advertising and profit margins. Don't cry for me Argentina. They could cut profit margins, reduce direct to consumer ads for controlled substances like Ambien, reduce drug prices by 25% or more, and still make plenty of $. Not GWs finest hour.

Posted by Weird Al 2004-10-18 2:14:36 PM|| 2004-10-18 2:14:36 PM|| Front Page Top

#8 Welcome to capitalism, Weird Al. Government manipulation (or lack thereof) aside, the price rises to what the market will bear.

Posted by Tom 2004-10-18 3:02:31 PM|| 2004-10-18 3:02:31 PM|| Front Page Top

#9 The problem is, when you're old and sick, the market will bear just about anything. It's a captive audience. You need the drugs or you die. Not much manuvering room.

Posted by Weird Al 2004-10-18 3:16:07 PM|| 2004-10-18 3:16:07 PM|| Front Page Top

#10 To clarify: no one is suggesting govt price controls. Simply, the govt has in fact taken responsibility for the medicare drug program. Since it has done so, there should be given the right to negotiate bulk prices. If a given co doesn't like this, no one says they have to participate. Every big health insurance co in the country does the same thing. No one accuses them of being anti-capitalist.

Posted by Weird Al 2004-10-18 3:29:21 PM|| 2004-10-18 3:29:21 PM|| Front Page Top

#11 The Canadian system only works because the market is relatively small

And because US and European Big Pharma multinationals foot the bill for all the drug research that produces the drugs the canucks hack and ripoff.

Al, you don't "spend [money] on profit margins." The average drug today costs, from initial research through clinical trials and FDA approval, about $800 MILLION. Pray tell, who the f*** is supposed to pay for that? Eliminate the pharma companies' profits and you eliminate their drug discovery pipeline.

Posted by lex 2004-10-18 3:33:06 PM|| 2004-10-18 3:33:06 PM|| Front Page Top

#12 lex: their profit margin comes AFTER expenses such as research. A NEW drug costs that much to develop. However, 90% plus of all new drugs are in fact "me too" drugs developed to keep pace with expiring patents. They don't cost anywhere near that much.

Once again, the companies can do whatever they like. Like it or not the federal govt has taken responsibility for this program. Responsibility means just that.

Don't tell me about new drugs. I sit in my office all day with drug reps telling me about the "newest" piece of crap that is exactly like the slightly less "New" piece of crap that has it's patent expiring next month. It's particularly amusing when they start bad mouthing their own drug that they've just been pushing for the past 10 years. Happens all the time.

Posted by Weird Al 2004-10-18 3:42:46 PM|| 2004-10-18 3:42:46 PM|| Front Page Top

#13 Al:
The 40% is absolutely false. Only if you consider all of G&A to be "advertising" do you come close to that. Not even Arthur Anderson would believe that.

Oh, and write off the R&D against the "profit" and what do you have left? To bring a drug to market costs $700,000,000 to $1,000,000,000. A drug which doesn't make it to market can still cost a good fraction of that, and there is no product to sell to recover that. The few successes have to pay for the blind alleys.

The drug companies are not ripping us off. The various governments are ripping us off. The foreign governments pay only enough to pay for manufacturing costs & overhead, not to recoup all the hundreds of millions of R&D. Americans pay for R&D for the entire world.

I wonder what would happen if we backed our companies against the EUSSR bureaucrats who want to steal the drugs? If they had to buy them at the open market price? If, when they stole the patent and let one of their companies make them (for a hefty bribe, I'm sure), we filed suit under the WTO?

Posted by jackal 2004-10-18 3:49:57 PM|| [http://home.earthlink.net/~sleepyjackal/index.html] 2004-10-18 3:49:57 PM|| Front Page Top

#14 I didn't 40% profit. I said 40% profit + advertising. R & D is separate, and accounts for roughly 10% of gross. These co have advertising budgets and levels of sophistication that would make your hair curl. And please stop trying to make me cry over the blind alleys and drugs that don't make it. SO WHAT? Isn't that the very capitalism you're talking about? Again and again - any company that doesn't want to negotiate price doesn't have to. Virtually every private health insurance co in the counrty has negotiated prices and preferred drug lists. The drug co haven't gone broke yet.

You're missing the whole point. If you don't think the govt should be in the prescription drug business at all, just say so, and the discussion will end. Once they have taken that responsibility, they should do what every private insurer in the country does. These are after all private capitalistic insurance companies. They're in it for the $. Anyone who thinks they're in it for the patients has been smoking too many of those funny cigarettes. So shouldn't the govt do the same? Be capitalists and work to keep costs down?

Posted by Weird Al 2004-10-18 4:00:48 PM|| 2004-10-18 4:00:48 PM|| Front Page Top

#15 If the govt buys in bulk, then they should be able to negotiate bulk pricing. Happens all the time in lots of industries whether the government is the customer or not. The government is not, however, the entity that prescribes the drugs. Therefore the pharma companies have to market to these decision-makers in the transaction pipeline in addition to negotiating with the govt buyer. Higher volume sales are more critical when the per unit price is lower if a company is to generate an adequate return (the adequacy of which is determined by the market). That means that they must be ever more aggressive in their advertising/marketing. Canada was right to do what they did. They and the Euros know that if the market was operating efficiently across borders, the price of drugs would rise there and come down here reaching a worldwide equilibrium.

Posted by remote man 2004-10-18 4:24:07 PM|| 2004-10-18 4:24:07 PM|| Front Page Top

#16 In other words #15, if we negotiated lower prices for our people, then Canadian prices would rise in due proportion. Makes perfect sense, but why does that matter to our seniors? Or put another way, who in the US cares if Canadian prices go up? The canadians will care, but that's their problem. Capitalism at work.

The bottom line here is the essense of capitalism. The drug cos want the highest possible price for their product, and the consumer wants the best price. The consumer in this case is the federal govt, who as an entity should have been given the right to negotiate. Since the govt wan't given that right, they look like saps. Hell, they are saps.

Posted by Weird Al 2004-10-18 5:20:45 PM|| 2004-10-18 5:20:45 PM|| Front Page Top

#17 Canada deals blow?!? I don't think the narcs are going to like this, Yogi.

Posted by BH 2004-10-18 6:28:33 PM|| 2004-10-18 6:28:33 PM|| Front Page Top

#18 The drug cos want the highest possible price for their product, and the consumer wants the best price

That can't be legal? Aren't there laws to protect the poor in Broward County? We need more money, the hurricanes scared the teeth out of us. Im voting for Pat 3 times this year.

Posted by Famous Roosevelt Gravy Train Graber 2004-10-18 6:55:07 PM|| 2004-10-18 6:55:07 PM|| Front Page Top

#19 Ummm, I'm pretty sure that the government does negotiate the price of drugs. I don't think they pay top dollar. I know that states do this. The Drug Co's have to do/price things correctly in order to be on the approved list of drugs that they will pay for. Am I missing something?

Posted by remote man 2004-10-18 7:42:02 PM|| 2004-10-18 7:42:02 PM|| Front Page Top

#20 Nope. The medicare prescription act does not give the feds the slightest power to negotiate drug prices with the drug companies. The states all do, particularly through their medicaid acts (medicaid=children, medicare=oldsters). Just what I've been talking about. The govts, state and federal, have taken on the role of the consumer looking for the best price. The states are doing their part, the feds can't. Others seem to feel I'm anti-capitalist, but it's the other way around. The consumer should always have the opportunity to haggle. Here they don't, and it's not like a new washing machine. You can't just walk away if you need the drug.

Posted by Weird Al 2004-10-18 7:53:30 PM|| 2004-10-18 7:53:30 PM|| Front Page Top

#21 I just love my Canadian neighbors!! They will always lead me to the straight and narrow path!

Posted by smn 2004-10-18 11:00:08 PM|| 2004-10-18 11:00:08 PM|| Front Page Top

#22 Simple solution often found in intellectual property licenses: a most favored nation clause. That is, the US government simply passes a law that says that in exchange for the authority to peddle their wares in the world's largest and most lucrative market, pharmaceutical manufacturers will wholesale drugs in the US at a price equivalent to the lowest price they charge anywhere on Earth. Generally I oppose all price controls but the fact is that US consumers are subsidizing socialist health care systems all over the world via the higher prices we pay for our prescription drugs. Simple fix: eliminate the subsidy.

Posted by AzCat 2004-10-18 11:07:49 PM|| 2004-10-18 11:07:49 PM|| Front Page Top

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