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To: Don Lloyd who wrote (183393)2/3/2006 2:03:41 PM
From: Saturn V  Read Replies (1) of 186894
 
Dan,
Your position rationalizes the profit maximisation strategy practiced by the drug companies. I do not blame the drug companies trying to maximise their profits, as all businesses do in a free market system.

However as a part of the free market system, most major companies and the US government have a "standard clause" in their purchase contracts to prevent price gouging. If a XYZ company sells a machine to IBM for example, for $1 million, IBM can demand a refund if XYZ sells the same machine to some other company for less money within a certain time frame. IBM may even demand the right to audit the books of XYZ to put teeth into this clause. Such clauses are items of negotiation between sellers and purchasing agents. Company XYZ may try to wiggle out of this situation by claiming that each machine is custom designed, and the cheaper machine sold to someone else is a different product design.

However the US consumer has no such recourse. The FDA abets the drug industry by claiming that the drug sold in Canada is inferior. The Congress should pass a law either eliminating the restrictions on buying drugs overseas, or pass a low not allowing major differential pricing. In this situation,the drug companies profit maximisation strategy will force them not to agree to price controls imposed overseas. They would delay introduction of new drugs into controlled markets, which is fine with me. The countries which force price controls would not benefit at US expense. Right now the countries which have price controls and the Drug industry are all making out like bandits at the expense of the US consumer.
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