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Politics : Proof that John Kerry is Unfit for Command -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (18817)	10/15/2004 9:30:20 AM
From: cirrus	Read Replies (1) \| Respond to of 27181

Interesting article. However, the key paragraph: But with the (importation) ban lifted, and the threat of underpriced drugs flooding the American market, companies would be "forced" to adjust. They could still try to maximize profits by segmenting markets. But they'd have to guard against parallel markets the right way, through no-resale contracts or supply limits. They could offer a country lower prices, but the country would have to police its exports, since America would no longer be policing imports. That places the incentive where it belongs, on the country benefiting from the bargain. And if that failed, companies could limit supplies, as they're doing now with Canada. That essentially does nothing for the American consumer, replacing a govt ban on imports with drug company "no-resale" contracts. What the author fails to mention is that countries don't simply negotiate a low price for "drug A"... they tie "drug A" to everything else. If you don't sell "drug A" to us at this price we won't let you sell any products, from asprin to vitamins to cough syrup, here. That's a powerful hammer. The segmentation is not driven by pure market forces but by govt intervention, at great cost to the American consumer. This needs to be addressed. ...the only reason a company can sell a drug for $20 in Germany is because it's sold for $100 in America. The bill would actually import foreign price controls, and that would be the end of future R&D and the miracle drugs it produces. That's debatable. Drug companies net profits after R&D and top heavy sales expenses are the among the highest of all companies in any industry. Much basic research is govt and university funded, with promising products then diverted to the private sector for commercialization. That's the history of Imclone's product, Erbitux, for example, and a brief review of Imclone's sorry history suggests that greed and avarice is as much responsible for the drug's high price as pure R&D and FDA related expenses. Free markets are wonderful, but sometimes price controls are appropriate. No one disputes laws barring price gouging for basic commodities after natural disasters, for example. States regulate prices for essential commodities such as electricity, natural gas and water, for example, to prohibit monopolies from extorting unfair profits from consumers. At some point we are going to have to rethink the free market issue and make sure we are really looking at a free market with respect to vital drugs. Good, thought provoking article. Thanks for posting it.