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Tuesday, September 21, 2004

Have I said this before?

For all the wailing and moaning coming from the drug companies, it's not the cost of drugs in America that bothers me, exactly. It's that with those costs being less elsewhere, we're expected to pay U.S. prices just because we live here.

To the drug companies, I say, Welcome to the Global Economy, baby!

The same situations that make it cheaper to offshore your production facilities outside of high priced American workers' hands work equally easily for Americans to buy the products from other countries. You can't have NAFTA working for you and against consumers. The world just doesn't work that way. When a computer manufacturer outsources to Korea, he sells his product to Americans at a cheaper rate, keeping some of the profit for himself and giving some of it away in discounts to make the product more attractive to the consumer. There's a basic check and balance in place because if one manufacturer's product isn't priced well, then the consumer will choose another manufacturer's computer that is. But drug companies don't have this pressure. Most of their medications are patented, so normal market pressures don't apply. But if a consumer is savvy enough to shop elsewhere, there's no excuse for legislating against doing so. I've bought books from Amazon.co.uk because they have something at a better price, or an edition I can't find in the states. I've bought shoes from Russia since they don't distribute them in the U.S. and comparable shoes cost two or three times as much. The web makes such transactions simple and easy. I just can't for the life of me figure why the drug companies believe they have a legitimate claim to cry foul just because their consumers know how to do basic comparison shopping. That Wal-Mart is as huge as it is should turn on the lightbulb for them. Americans always choose cheap over quality, given half a chance. The web gives the average American ample chance to become a global consumer. That the drug companies didn't see it coming and equalize prices between Canada and the U.S. at least enough to make shipping costs prohibitive to large savings is silly. So please pipe down and quit your whining. You thought we were just dunces who would pay whatever was asked, but we're not quite as gullible as you thought. Too bad for you.

7 Comments:

  • So, the fact that Canada has a national healthcare system that pressures the drug companies into making lower prices and doesn't have the strigent health standards that the US does is irrelevant?

    I mean, US consumers voted for the FDA to protect them and make a bunch of paperwork and prove things through various clinical trials (costing millions/billions of dollars). And yet, they should be able to buy drugs from other nations who don't hold drug companies to those standards, power the companies into lower cost deal for bulk?

    Yes, the drug companies charge more here than in Canada. Yes, people are smart enough to buy the drugs elsewhere. But by forcing the cost of drugs to go down that forces companies to cut back their budgets. Which means less R&D money, which means less drugs on the market and drugs brought slower to market due to the HIGH cost of working through safety and efficacy.

    If America wanted a national health care plan, they could negotiate better prices. But Americans don't want that. They just want cheaper drugs that work better and more of them.

    By Blogger Zhaneel, at 3:55 PM  

  • We shop at Wal-Mart. We will sooner drive our country into the ground than pay the real price of what it costs to do something. The drug companies outsource their production to cheaper labor markets. It's not fair to cry foul when consumers outsource their purchases to cheaper drug markets. It just doesn't work. These roads go both ways.

    By Blogger Ammy, at 4:03 PM  

  • Actually, Pharma is looking into outsourcing BECAUSE of the pressure to lower the costs of drugs (http://www.equitymaster.com/DETAIL.ASP?story=1&date=8/25/2003). So the idea that Americans should be able to buy drugs at a lower cost because they were produced for lower isn't true, yet.

    And I don't understand why people are willing to pay 50% of the cost of something that is less than 50% of the quality. Especially when it comes to your health care.

    By Blogger Zhaneel, at 4:11 PM  

  • They're willing to pay less and get less because health care isn't fun like spending money on a new car or a Playstation.

    Also, the result of the cash outlay isn't something they can appreciate in many cases ("I don't feel $80 better.") and sometimes genuinely can't afford (1 drug = entire food budget for the month).

    By Blogger Ammy, at 4:23 PM  

  • They're willing to pay less and get less because health care isn't fun like spending money on a new car or a Playstation.

    Also, the result of the cash outlay isn't something they can appreciate in many cases ("I don't feel $80 better.") and sometimes genuinely can't afford (1 drug = entire food budget for the month).

    Real wages haven't gone up in the country for the last few years. People are cutting corners whereever they can. Still, people are generally more likely to buy from Canada instead of Mexico since it's more "trusted" as providing safe, regulated drugs.

    By Blogger Ammy, at 4:25 PM  

  • And many times those drugs aren't necessary (doctor's being bullied into perscribing because the patient thinks he/she needs them). And others, those drugs are the response to diseases that wouldn't have been around 30-50 years ago because the person would have simply died.

    The people do still simply die in other countries. But not here in America, so those drugs are considered "necessary". I'm not saying I'm in favor of being martyrs. I certainly wouldn't want to die of AIDS or have my father die because he couldn't buy the drugs after an organ transplant or anything else that is personal. But I do recognize the cost of saving a life and it is. Should health care be a right? Many people seem to believe it should be (I want my drugs now!) but aren't willing to fund it (either through taxes/legistlation/out of pocket).

    As for the lack of salary increase, the article you linked about Walmart clearly shows why that is: Companies can't afford to pay the salaries people want.

    In China/India, most of the country does not enjoy the standard of living that Americans do. Hence, the companies can pay less there. I'll bet the Indians who help manufacture the drugs couldn't buy them for their children. The drugs may not even be brought to that market for 2-5 years after release in the US. Is that right or fair? No.

    Does that make it fair to blame the companies? I'm not sure. I don't think so, because I know the cost of drug research. It is going to cost my company over 5 million dollars to do a Phase 2 clinical trial. And even more for a Phase 3. This doesn't even include the salaries of the people who developed the technology or the Phase 1 trial. 5 million dollars is a FRACTION of the total cost that will be borne by my company. Today's world does not allow for drug companies to develop on the cheap.

    By Blogger Zhaneel, at 4:38 PM  

  • So, the fact that Canada has a national healthcare system that pressures the drug companies into making lower prices and doesn't have the strigent health standards that the US does is irrelevant?

    Canada sets it's prices and the companies can take it or leave it. I can reasonably imagine companies are eager to get into the Canadian market and willing to pay lower prices for the privilege. They are simply upset when their deals had unintended consequences.

    In many cases, these drugs were manufactured in the US, in facilities approved by our FDA, imported to Canada and then sent back to the US. They are the exact same drugs.

    From this article http://todaysseniorsnetwork.com/canadian_drugs_safe.htm
    "A recent report by the Congressional Research Service supports the safety of drugs from Canada. It found that medications manufactured and distributed in Canada meet or surpass quality control guidelines set by the FDA. The service is the Library of Congress source that Congress turns to for objective information"

    A informative article that covers both sides also appears in MSN (of all places). http://moneycentral.msn.com/content/Insurance/Insureyourhealth/P91657.asp

    They make the point that the more likely danger involves ordering drugs from any website without somehow checking out their legitimacy. You shouldn't order Viagra from an email spam just because it has a maple leaf on it. But if you find a legitimate dealer (and I don't know the steps to take to verify one), you should be just as fine as if you were ordering them from Oregon.

    By Blogger Chris S, at 6:27 PM  

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