Democratic win could be bad news for pharma industry

The rewards for winning an election is that the name on the check changes.

This is all part of the "gotta have it now" mentality. All these expensive drugs will eventually go off patent and become cheap, but will in the meantime fund research for even better drugs. Without that, today's drugs will be the best we ever have. Do people seriously find it acceptible to have more access to drugs today (many of which only have a modest effect) at the cost of better drugs in the future? It reminds me of someone fresh out of college who charges up credit cards for some fancy (but intrinsically worthless) "bling bling" today at the cost of being able to own a house in the future.

This argument is incoherent.

If the expensive drugs of today indeed have only a "modest effect" with respect to much cheaper drugs available today, why is a premium charged for them?

Of course one can blame doctors and patients for being willing to pay a premium for moderate improvements, but give me a break here. Does pharma really want to work by the adage, Tthere's a sucker born every minute"? Just who is it that's "gotta have it now"?

And Medicare D is indeed seriously bad law, What sane business would tie its own hands and say "I'll pay whatever you ask." Of course Medicare should be allowed to negotiate price. It's like backward socialism -- aka corporate welfare, for one of the biggest purchasers of a product to be forbidden from negotiating. Sheesh.

Many of the quarterly earnings for pharma that I have read have cited significantly higher profits this year than last time around, and specifically credit Medicare for that.

No wonder pharma is giving tons of cash to the republicans. Bush is a CEO like Skilling was a CEO -- let's make our boys rich! To heck with the shareholders (read taxpayers).

The prices of new drugs are high due to the expense of all the research that went into bringing that drug to the market. From the time the drug is patented, the pharma company has until the end of the patent to do all the testing (sometimes close to a decade) to get the drug to market. Once it is on the market, the company has only a few years to make back the money spent on said drug, as well as make a small profit, before the generic form is marketed. At that point, pharma no longer makes any money off of their brainchild (said drug).

Now, Part D is a horrific law, and has some to do with greater pharma products, but has little to do with the overall price of drugs.

And, while some drugs are mediocre - not much better than what is currently on the market - many are knockout drugs that have amazing potential.

Thanks for posting about this issue.

What irks me is that the Eli Lilly company's blockbuster Zyprexa has been implicated in causing TEN times greater risk of developing type 2 diabetes.
They then turn around and sell other blockbuster drugs to treat the same diabetes.
--
Daniel Haszard

When I said "modest effect", I was simply saying that there is some "ideal" effect of which to compare, and we are still very shy of that. Drugs ARE improving, as can be seen by cancer and heart disease mortality rates, but they are far from where we would like them to be. If democrats have their way, we will never get there because funding will drop off. Is that what democrats want? I think the blocking of government stem cell research funding is minimal in effect of human health compared with what destroying the pharmaceutical industry would have.

Let's separate things out here.

1) Pharma is a business and like other businesses exists to make money.

2) Pharma is in a very capital intensive, risk intensive business, and so high profits are necessary on the back end to justify the risked capital.

3) There is some sense that many people share, that as a society we need to figure out ways that everybody can pay for medicine they need. Many ways to do that...based on your political hue.

4) Drugs that only provide a modest improvement to current standards of care but are priced at a premium level are something a lot of people scratch their heads over, when you look at overall healthcare spending in the US.

5) Drugs that have a significant impact and are priced at a premium can be justified by just about anyone in the mainstream, under the US way of doing things.

6) Medicare is a key way that the US helps poor people get access to healthcare.

7) Under Medicare Part D, many more poor people have access to drugs.

8) Under Medicare D, Pharma has made bigger profits this year due a) to the expanded consumer pool created by Medicare D; and b) the prices that pharma has been able to get for those drugs.

(Note that these profits are ALL BONUS -- these are customers that pharma never had. So the argument about pharma not being able to pay for its research to create a future for itself if MediCare D changes is ALL BOGUS.)

9) People on both sides of the political aisle have scratched their heads over the wisdom of the Medicare D plan, on many levels.

10) One of the most head-scratching elements of Medicare D is the huge expansion of government spending for something that the government has tied its own hands to negotiate the price of.

Maybe that is more clear.

I'm pretty sure Medicare only helps out the elderly and disabled and NOT poor people. That's what Medicaid is for.