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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (3457)	12/24/2007 2:27:02 PM
From: Road Walker	Read Replies (1) \| Respond to of 42652

It would vastly reduce the cost of marketing/advertising. ----------------------------------- They would still need to market. What is it about the term "vastly reduce" that you don't understand? The huge advertising budgets are larger than R&D budgets. It they were reduced by 90% that would be money used for R&D. and shows that the margins are out of the ballpark. ----------------------------------- It shows nothing of the sort. Of course it does. Standard business rule... if you have great gross margins advertise the piss out of the product. Expensive advertising is no concern only if you have great gross margins on every incremental sale. Been there done that. Because of government subsidizes of basic research. ----------------------------------- Yes they subsidize basic research but they don't pay for all of it. And more importantly they don't to any great degree subsidize the large cost of developing, testing and approving drugs once they get past the basic research phase. This cost is often much larger than the basic research cost. Force down costs with national market monopsony buyers and there won't be much incentive to meet this huge cost, unless you get much larger subsidies from government. The government or other institutions pay for almost all basic research. Testing and approving drugs is basic bureaucrat crap, not high on the 'intellectual property' scale. When you say "force down costs" I think you mean "force down average selling prices". Listen, the drug companies are one of the most profitable industries in the world. They spend huge amounts on advertising; some would say creating demand where no real health problem exists. If they have to rse prices in other markets to end the US subsidy, so be it. I can't believe you would be against that... considering your opinion on US subsidies. The outlier is the US, which chooses not to participate in the efficient marketplace. -------------------------------------- National monopsony buyers aren't examples of efficient markets. Of course they are... that's why drugs are cheaper in other countries. Efficient markets always strive for scale and buying power (Walmart). Manufacturers always strive for inefficient, disparate and smaller markets because it produces greater gross margins. What we have in the US is a disadvantaged market caused by our politicians. They intervene and pass laws saying that government CAN'T negotiate price... in a world market where every our country does negotiate price. You need to think about this a little more...