Re: Re: Re: Re: Re: Re: Brands, their material base?was Re:My Take onCompetition

[Michael Perelman]

Doug Henwood wrote:

> Yeah, pharmaceuticals are often described as the most profitable
> legal industry around. But 1) has profitability increased,

The industry is in flux.  They have few blockbusters on line.  They spend to much
on advertising and not enough on research and the public science on which they
depend has been flagging.  Even Newt is calling for more spending.

> 2) how
> much of the industry's revenue comes from out-of-pocket expenditures
> by final consumers

I don't know -- if you mean from people paying directly rather than via insurance
companies.

> , 3) aren't drug prices lower in countries with
> national health systems, which are in a stronger bargaining position
> than buyers in a fragmented system like the U.S.,

It is not fragmentation.  Even the US gov't pays more.  It is the power that we
give them.

> and 4) isn't demand
> pretty price-inelastic, given what people will pay for health?

Not sure.  Yes, an individual's preference may be inelastic, but the HMOs prefer
generics.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]