--- The Fool <[EMAIL PROTECTED]> wrote: > > > > Lilly lost most of its Prozac market share in > > > _weeks_ > > Most likely because of price. You can't tell me > that a company given a > 17 year monopoly can't make a drug just as cheaply > as a newcomer.
It can. But it can't make them _any cheaper_ than a newcomer could. There are hundreds of generic manufacturers. So Lilly could get, say, one half of one percent of the market with its new drug. When it spend _$1BB_ to get that drug to market. Even worse from a drug company's perspective, pharmaceuticals are an almost classic Ec. 101 product. Very low barriers to entry, and drugs made by different companies are indistinguishable. So what happens? The product will be sold very near to the marginal cost of production. In the case of drugs, the MC of production is _extremely_ low. And, in fact, generic manufacturers are far less profitable than the creators of new drugs. > So your saying almost the entire cost of making a > drug is the FDA > approval process w/ clinical trial? Sound like > something the government > should be funding to me. Yes, this is well known. The _second pill_ costs a few cents. The first pill costs a billion dollars. Why? 1. I want _everyone_ to be funding these things - the more money, the better 2. Why should only the government do it, when governments aren't all that good at doing it? Under your argument, the government should be the only people allowed to manufacture the drugs as well. What's the difference? > Surely a government can compete with other > governments?, or with > corporations? Or with itself? But you don't > necessarily need competition > when you are doing something without a strict profit > (research). Why would it do any of those things? The point of competition is that it spurs people/organizations to perform better. In general, the only government organizations that operate with anything approaching private sector effectiveness are the military (which competes with other militaries, but certainly isn't even a tiny bit _efficient_) and the postal service (which competes with private delivery systems). Why would you want to put something as important as medical research and development in the exclusive hands of an organization that is - justly - a byword for slow and inefficient operations? Governments lack competitive incentives. Companies don't. It _matters_ if you're the first drug on the market. For a blockbuster, every week on patent can be worth tens of millions of dollars. Outside of the military, name a government organization capable of operating that quickly? > The Government can throw a much larger amount a > money, and resources at > any given problem, and should, that one of it's > functions. That's kind of debatable, actually. Go take a look at Pfizer, GSK, or Merck's market cap some time. The _American_ government might have more resources than those companies, but there aren't too many others that do. Even more importantly, so what? You can drown problems in money, but that doesn't mean it will be spent wisely. Governments are not famous for their ability to spend money effectively. > And this new > drug just proves my point. Corporations are too > greedy to be in charge > of finding cures and remedies to peoples problems. > In fact it's not > really in pharmaceutical companies best interest for > people to get > completely better, because they can get them fixed > on taking x drug > (which really only treats symptoms) forever, making > them huge amounts of > money. If they got better then they would stop > taking the expensive > drugs, which means less cash income for > multi-million/billionaire CEO's. > Is it in the interest of a democratic government to > things like that? You're kidding, right? In the interest of a government to get its citizens dependent on something that only it can provide? Sure. That's besides the point, though. The government can (and does) conduct all the R&D it wants. But it can't take drugs to market because it's _not any good_ at that sort of thing. Even if the US government chose to do that, the pharma companies would beat its pants off, because they are _really, really good_ at this task. That's why they're worth billions of dollars. Have you ever even _worked_ for a company, Fool? If Merck had a drug that was useful for continual treatment of a chronic condition and GSKthought it could develop a one-shot drug to cure that condition, what do you think GSK would do, exactly? Sit on its hands? Why? There's _money_ to be made in that drug. If you want to argue that intelligent use of tax/financial incentives on the part of the government could persuade companies to look for one-shot cures more, I'd probably agree. But that's a whole different thing from saying that the companies are evil profiteers. They're trying to make a buck, certainly. If you've ever worked with a pharma company, you would also realize that for most of them, they aren't kidding when they talk about trying to save lives. They mean it. You keep talking about the virtues of competition. Why don't you think they apply to R&D? They certainly do. ===== Gautam Mukunda [EMAIL PROTECTED] "Freedom is not free" http://www.mukunda.blogspot.com __________________________________ Do you Yahoo!? Protect your identity with Yahoo! Mail AddressGuard http://antispam.yahoo.com/whatsnewfree _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
