OT Food for thought

From: "B J Conner"

As a US comsumer of drugs you get to pay more of the
developement and research cost.

Not to mention the obscene cost of advertising on TV, and perks to the doctors.
Now there's a place where significant cuts can be made with no sacrifice to R&D
or quality.

Ever wonder why Viagara is so expensive? You can't watch TV for an hour without
seeing at least one ad for some sort of limp dick medication.


George Adams

"All good fishermen stay young until they die, for fishing is the only dream of
youth that doth not grow stale with age."
---- J.W Muller

George Adams wrote:

From: "B J Conner"


As a US comsumer of drugs you get to pay more of the
developement and research cost.


Not to mention the obscene cost of advertising on TV, and perks to the doctors.
Now there's a place where significant cuts can be made with no sacrifice to R&D
or quality.

Don't forget political contributions, which are actually a drop in the
bucket. No other investment by drug companies gets more bang for the buck.

--
Cut "to the chase" for my email address.

A couple of the previous responses are in the ball park, but the
notion that drug prices are high to pay for the expensive ads is
bass-ackwards. The money spent on advertising is what MAKES POSSIBLE
the high prices. In simple terms, a firm spends one buck on ads and
raises the price by two bucks.

It is Bayer's advertising that cons consumers into spending about five
times as much for Bayer aspirin as they would have to spend to buy
generic or private label aspirin which is identical.

What's going on with the prices of Canadian drugs is known to
economists as "pricing discrimination" but is popularly called
"dumping."

When US drug manufacturers sell drugs in Canada at prices lower than
in the US, it is essentially the same in principle as renting hotel
rooms in Miami at lower rates in July than in January, or letting kids
into movie theaters at lower prices than adults, or letting tourists
(who can plan head and buy tickets early) on the airplane for less
than businessmen (who need to go NOW) are charged.

It has to do with what economists call "elasticity of demand."
Businessmen MUST get to Tokyo tomorrow to close a million-dollar deal;
they will pay what it costs. Their demand is INelastic. Kids have
less money than adults (at least when I was a kid); their demand for
movie tickets is ELASTIC.

Production costs are minimized when the firm produces at "capacity,"
which is not the maximum amount that can be produced, regardless of
cost, but that level of output at which unit costs is minimized. (That
is usually less than the greatest amount that can be produced.)

That quantity cannot be sold at the price that maximizes profit. So
rather than sell at a lower prices, which would increase quantity sold
but reduce profits, the remainder is sold in other countries. The
price in each country is set to maximize profit on sales there.
Personal income levels in each country are an important factor in
estimating that price. In simple terms, the richer the country, the
higher the price.

So US drug firms are not losing money by selling drugs in Canada at
reduced prices, they are INCREASING their profits.

Most of the private label products you see in the supermarket and
other stores are made by the same firms that make the higher-priced
"national brands." Sometimes, both the private labels and the
national brands are made by some small firm you never heard of.

For example, Mylan Pharmaceuticals and Barr Labs make drugs for
various "big name" firms.

This information is available if you know where to look. I have a
copy of the *Pennsylvania Formulary*, which lists all prescription
drugs licensed for sale in PA, along with the name of the
manufacturer.

Of some 85 brands of erythromycin stearate listed, under many
nationally advertised names and some as generic, all but a handful are
made by Mylan and Barr. All 27 brands of brompheniramine maleate are
made by one firm--National Pharmaceuticals.

The reason is that it makes economic sense for one or a few firms to
set up to manufacture a drug in large quantities and sell it to the
others, whereas it's inefficient and costly for each firm to set up to
manufacture a small amount.

It's the advertising that causes consumers, and physicians, to think
there are differences and that some are supeior to others.

(The gullibilty of MDs to drug company promotions is so scary I won't
take time to mention it here.)

I hope this is clear enough. It takes several class periods to teach
this to economics majors, so this is pretty sketchy.

And the drug companies keep selling to them. I doubt they're taking a
loss on the deal.

I hope I've shown they do not. But they would PREFER you pay the
higher US price.

This implies that the drugs are made here, sold to Canada,
and then come back here.

Exactly.

So why should they be dangerous? Do they have special factories that sell
substandard medications to Canadians?

No. It's cheaper to make the same drug for everyone than to make a
"different" drug for Canadians.

There MAY BE, however, some risk of buying from a fly-by-night
internet firm that is selling counterfeit drugs. You run the same
risk buying from US internet sellers, too.

Drugs from Canada are no more "dangerous" than drugs from a US firm.
But the FDA is "friendly" to US drug manufacturers and so it puts out
that propaganda.

If you want to know more, read _Pills, Profits and Politics_, by
Milton Silverman and Phillip Lee. They are professors of medicine and
pharmacology who both have long experience with the regulation of the
drug industry.

Another good source is _200,000,000 Guinea Pigs_, by John G. Fuller.

Hope this helps.

vince

From: rw

George Adams wrote:

From: "B J Conner"


As a US comsumer of drugs you get to pay more of the
developement and research cost.


Not to mention the obscene cost of advertising on TV, and perks to the
doctors.
Now there's a place where significant cuts can be made with no sacrifice to
R&D
or quality.

Don't forget political contributions, which are actually a drop in the
bucket. No other investment by drug companies gets more bang for the buck.

Actually that can be said for nearly all industries, and the contributions
feather the nests of right, left, and middle.


George Adams

"All good fishermen stay young until they die, for fishing is the only dream of
youth that doth not grow stale with age."
---- J.W Muller

George Adams wrote:
From: rw

Don't forget political contributions, which are actually a drop in the
bucket. No other investment by drug companies gets more bang for the buck.

Actually that can be said for nearly all industries, and the contributions
feather the nests of right, left, and middle.

The political contributions of industry feather the nests of most
*politicians* of the left, right or middle, but the quid pro quo
has a tendency to flow rather more substantially to the right.

The right is crookeder than the left, that's why they're rich.

--
Ken Fortenberry

In article ,
says...
Aren't the Canadian and US beef industries very
interrelated ?


Cattle have been moved back and forth across the Canadian
border since the old west days, so trying to distinguish
between "Canadian cattle" and "American cattle" is specious
at best.

Kevin

"Jeff Miller" wrote in message
news:M7G0c.19765$TT5.18521@lakeread06...


Peter Charles wrote:



Provided the auction isn't rigged and there are enough bidders, an
auction is usually a good indicator of fair market value.


Indian Joe remembers---don't know whether you would called "rigged" or not
but better not attend any Duck's Unlimited banquets if you are looking for
fair market value. You have a few drinks--you eat and drink a little more--
then the auction starts and the cute little wives bring you drinks and
encourage you to bid--" oh Joe you are not going to let harry have that
print are you?"
Next morning you wake up with a sorry print of 12 flying ducks for which
you paid$82 dollars each.
Two years later at divorce hearing she says part of your half of estate is
a $984 dollar art work--and she has tax deductible receipt from Ducks
Unlimited to prove that value.

On Mon, 01 Mar 2004 15:30:55 GMT, (Greg Pavlov)
wrote:

On Sat, 28 Feb 2004 21:05:50 -0500, Peter Charles
wrote:


Nothing goes straight up forever, especially in economics.


True, but on a per-person basis China does not
have to go anywhere near as far to become a larger
economy.

One of the fundamentals propping up the US economy
is the sense that it is a safe place to invest
money. Once that is questioned, and I think we're
getting close to that point, the US will be in very
serious trouvle economically.


I'm mostly thinking that they might get themselves into some serious
inflation problems, requiring tight money policies that will choke off
their growth. On the flip side, their large population means that
with reasonable fiscal management, they won't reach full capacity for
a long, long time internally. We're already seeing our steel
companies hitting their customers with a $95.00 CAD per ton surcharge
due to scrap metal shortages thanks to China's demand for scrap. If
this becomnes typical in commodities markets in general, then
inflation is likely to rise globally and especially in China.

What are they at now, 1.2 billion? The planet cannot produce enough
resources to service that many consumers at anything approaching
Western levels. This growth will top out. Whether through internal
fiscal mismangement or by reaching the limit of the carrying capacity
of the planet, it will come to an end.

Peter

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not sure peter qualified his auction contention, other than to say it
shouldn't be "rigged" and there should be enough bidders. reputable
real estate appraisers in this area don't use auction sales as a guide
or comparable sale in determining fair market value. typically, real
estate auctions here are forced events... foreclosures & liquidations.
purchasers are motivated to attend and to bid by the "get it cheap"
mindset. frequently, banks buy at auction for amount owed on the
mortgage payoff, not the fmv if listed on the open market. the ad
valorem property tax base here would go to hell in a handbasket if the
auction bids determined real estate values. no responsible government
would allow that to happen. g

jeff

Ken Fortenberry wrote:

Apples and oranges. There is a difference between a "vanity" auction
fundraising event where the proceeds go to charity and a hardnosed,
strictly business auction. In Illinois when you buy a property at
auction the value of that property for tax purposes is set to exactly
the auction price by law.

On Mon, 01 Mar 2004 18:44:57 -0500, Jeff Miller
wrote:

not sure peter qualified his auction contention, other than to say it
shouldn't be "rigged" and there should be enough bidders. reputable
real estate appraisers in this area don't use auction sales as a guide
or comparable sale in determining fair market value. typically, real
estate auctions here are forced events... foreclosures & liquidations.
purchasers are motivated to attend and to bid by the "get it cheap"
mindset. frequently, banks buy at auction for amount owed on the
mortgage payoff, not the fmv if listed on the open market. the ad
valorem property tax base here would go to hell in a handbasket if the
auction bids determined real estate values. no responsible government
would allow that to happen. g

jeff

Consider the nature of the bidders -- cattlemen with 1,000s of head of
cattle and in need of a place to graze them. That's way different
than a charity or liquidation auction. If he has no place for his
cattle, he is out of business.

Keep in mind that when I mayde that comment, I'm an ex-banker with
plenty of expereince in liquidating assets and I spend plenty of time
on ebay so I do have some idea about these things.

Y'know, it's just possible that the Canadian beef industry isn't
subsidized. Funnier things have been known to happen.

Peter

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