George Bush Is The Root Of All Evil

[Snow]

By Howard Kurtz

Washington Post Staff Writer

Sunday, October 17, 2004; Page A06

Sen. John F. Kerry jumped on the flu-vaccine shortage yesterday with a new television ad blaming the situation on President Bush.

In what may be the first presidential campaign commercial dealing with the flu, the Democratic nominee is trying to portray the vaccine squeeze as typical of the president's mishandling of health care...

http://www.washingtonpost.com/wp-dyn/artic...av=rss_politics

In an unrelated story John Kerry blamed George Bush for the Hinderburg disaster, Cluster's Last Stand and toxic mold.

Note: Kerry forgot to mention that he voted against legislation that would have helped avoid this kind of trouble.

[the_kid_in_the_korner]

this is the truth!!!!! http://www.StupidVideos.com/?VideoID=861

[Winnie G]

That’s Odd I watched the debates when visiting family, Bush on one hand said Canadian dugs aren’t safe to import to the US then when asked about the flu vaccine he said he was negotiating with Canada to in port vaccine.

Ok am I the only one who saw a flip flop there?

In the words of South Park Kids “Dumb Dumb Dumb"!

[Matt]

Surely this means that Bush Senior would be the Father of All Evil?

[Guest Unorthodox]

Originally posted by Winnie G@Oct 17 2004, 10:08 PM

That’s Odd I watched the debates when visiting family, Bush on one hand said Canadian dugs aren’t safe to import to the US then when asked about the flu vaccine he said he was negotiating with Canada to in port vaccine.

Ok am I the only one who saw a flip flop there?

In the words of South Park Kids “Dumb Dumb Dumb"!

It is a flip...and one in the right direction. Hopefully he won't flop back.

[Guest TheProudDuck]

Originally posted by Unorthodox+Oct 18 2004, 12:40 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Unorthodox @ Oct 18 2004, 12:40 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin--Winnie G@Oct 17 2004, 10:08 PM

That’s Odd I watched the debates when visiting family, Bush on one hand said Canadian dugs aren’t safe to import to the US then when asked about the flu vaccine he said he was negotiating with Canada to in port vaccine.

Ok am I the only one who saw a flip flop there?

In the words of South Park Kids “Dumb Dumb Dumb"!

It is a flip...and one in the right direction. Hopefully he won't flop back.

Winnie's actually talking about two different things.

[Guest Unorthodox]

Originally posted by TheProudDuck@Oct 18 2004, 01:52 PM

Winnie's actually talking about two different things.

Really? I had heard this on the news too, and that is how I interpreted it. In the past, Bush said that we should not import drugs from Canada. Now, in an emergency, he is making an exception.

Sounds like a flip-flop...but sometimes flip flopping can be for our benefit.

[Matt]

Ooh, no!

Can't have Canadian drugs imported into America! No, that's a baaad thing. Very bad, indeed!

Why? 'Cos Big Pharma (the US drugs industry) tells Mr Bush that this is so!

And lower profits for Big Pharma means less money available for bribes. Oh, sorry! Did I say bribes? Of course, I meant to say legitimate campaign donations, of course!

[Guest TheProudDuck]

There are two issues here:

1. Importation of Canadian-manufactured drugs, like the flu vaccine.

2. Re-importation of American-manufactured drugs shipped to Canada, bought by middlemen, and then re-shipped back south of the border.

Nobody's limiting Canadian drugs, as in #1. The issue lies with #2.

What #2 is about, is that Canada has price controls for prescription drugs. The United States doesn't. So in the United States, drug companies price drugs at market, i.e. the highest price the market can bear, while in Canada, if those companies want to sell any drugs at all, they must do it at the price set by the government.

Somebody had a bright idea: if the same drug is cheaper in Canada than in the United States, why not just buy those drugs from Canadians instead of the drug companies themselves? Basically, that would be a kind of regulatory arbitrage, taking advantage of a disparity in legally-enforced regional prices. (Enron did something similar during the California power crisis.) Assuming drug companies sold their product to every Canadian who ordered them (including re-importers), American buyers would get the benefit of Canadian price controls without American law having enacted similar controls.

The problem is, if you're a drug company, do you sell Canadians large amounts of drugs knowing that those same Canadians are going to ship them back into your market and compete with you? If you are, you went bankrupt a long time ago. What would happen would be that pharmeceutical companies would limit the amount of drugs they'd be willing to export to Canada to what they calculated Canada could use domestically.

There is no economic free lunch. American pharmaceutical companies only sell as many drugs to Canada as is consistent with being profitable. Even at the lower, restricted Canadian price, the companies calculate that there are marginal profits to be made from some Canadian sales. If, however, those Canadian sales started to cut into the American market's profitability, the companies would exit the Canadian market.

[Guest Unorthodox]

Ok PD, I understand, and thanks for clearing that up.

I agree that the re-importation of drugs would hurt our drug companies. Although I wonder if these drug companies could still prosper if they lowered their prices to the same price that they charge Canadians.

But I know nothing about the cost of manufacturing drugs and the research involved, so I can't criticize the drug companies...I can only question whether they are charging a fair price domestically for them. And by that I mean: Are the drug companies making a fair amount of money to make their business worthwhile, or are they getting filthy rich off the American prices?

And I don't know the answer to that.

[Jenda]

I can't help with how the drug manufacturers apply costs to drugs except how it relates to research and development, but I can help with the research and development issues.

My former husband is a chemist for a drug company (Wyeth-Aerst), and has, for the last 15 years, or so, worked on an anti-cancer drug. The process starts with discovery of bacteria (or chemical, etc.) with cancer-fighting capabilities. In this case, it was a bacteria found in a sample of Texan soil. They had to isolate and identify this bacteria, then find out how it worked. Once they find the active ingredient, they had to figure out its chemical structure and figure out how to replicate it. Then they had to figure out how to replicate it most cost-effectively. Once they had enough of this compound on hand, they had to figure out how to attach it to something that would get it to cancer cells without it being able to affect other cells.

(In case you don't know anything about cancer treatment modalities, they usually attack every cell in the body. The reason they are so effective against cancer cells is because cancer cells are so rapidly growing (in general) that if the drug is given at the right point in time, it hits the cancer cell in the midst of reproduction (when the cell is at its weakest) and kills them. Regular body cells are so slow to reproduce (comparatively), that only a minimal number of cells are affected (except for like the digestive tract, which is a medium-fast reproduction time, and therefore the digestive tract is much harder hit.))

This drug was soooo toxic that it killed every cancer it was put to, but it also killed all other cells it was put to, also. So, it couldn't be given to the cancer victim the way most normal cancer drugs are. They had to find alternate routes. The most effective way ended up being to attach the drug to tumor-specific monoclonal antibodies. A process that had never been used before. Ever. Since it was a completely new process, the process, itself, had to be created.

Once the drug entered it's final form, it had to go through clinical trials to determine it's efficacy as a drug. Also to determine the strength of the doses. There are 4 steps in clinical trials, each usually about a year long. Only after all this, is the drug considered safe to enter the market.

He started working on this drug about 15 years ago, it hit the market this year. He received (or will receive) an award from the American Chemical Society for his research on this drug. I'd tell you to go to the ACS website and look it up, but I don't remember the name of the drug. LOL.

But that is the process. Now that you know the process, what kind of price would you put on this drug?

[Guest Unorthodox]

Of course it must be a high cost to make drugs like that.

The important question would be: Are the people that your ex-husband works for filthy rich, or just making a good living?

[Jenda]

I really don't know the answer to that question, but my guess would be that they are probably like most huge conglomerates. There are a few at the top that make over-the-wall salaries, and then it drops significantly.

[Guest bizabra]

Originally posted by Unorthodox@Oct 18 2004, 07:10 PM

Of course it must be a high cost to make drugs like that. 

The important question would be:  Are the people that your ex-husband works for filthy rich, or just making a good living?

I heard on NPR in some interview, can't remember when, who, etc., just that the topic was about drug companies and the percentage of their costs for this and that. Some bits of data that stuck with me are these: 1) R & D about 13%. 2) Advertising 31%. Hmmmmmmmm m m m m. . . . . .

Also, the conversation went on to assert that the US gov funds (ie: uses tax $s) a huge proportion of drug studies that the drug companies then use to create and manufacture product.

As for Canadian imports having rebound effect on drug costs, why not do as the Canadian gov does and impose price controls? Eh? What's wrong with that?

[Guest TheProudDuck]

Biz,

Re: price controls -- Why stop with drug prices? Why not slap controls on oil prices, housing prices, college tuition prices, and so forth?

I say no, because there's no economic free lunch. In an efficient market, prices will be set at the most efficient level. Price something too high, and you lose buyers, whose additional consumption would increase your profit even if the price were lower (that is, selling 100 pills at $1 will make you more money than selling 40 pills at $2.) Price something too low, and you'll have excess demand.

The vast majority of new prescription drugs are developed by American companies. Obviously we're doing something right.

Part of the problem with prescription-drug prices is that the whole American medical system is highly inefficient economically because of the prevalence of third-party-payment and the threat of litigation The tax system encourages one-size-fits-all, employer-provided insurance, which results in large numbers of people being overinsured, distorts pricing, and encourages inefficient consumption, especially in the area of defensive medicine, which in turn is encouraged by a broken jury system. It's a perfect storm of inefficiency.

Are pharmaceutical companies outrageously profitable? If so, you ought to sink all your savings into their stocks. The reality is that drug companies' profits aren't out of line from other companies, with the possible exception that their prices are a bit more stable during recessions than companies whose profits depend on more discretionary consumption.

You mentioned that drug companies' advertising budgets are higher than their R&D costs. I need to look into that more, as with most stuff I hear on NPR, which tends to have a certain slant which sometimes leads to facts being stated out of context. But looking at the drug advertising I see on TV, most of it looks to be directed towards more "discretionary" drugs, like drugs for depression, sexual performance enhancement, and competing pain relief drugs. You don't see many ads for cancer therapies, probably because people with serious illnesses don't need much persuasion to want treatment. On the other hand, a guy whose male plumbing could be working better may not be aware of treatment options, or convinced that he ought to bother taking drugs to get fixed.

You have to separate advertising budgets by individual drugs, or at least drug categories. If drug companies are spending 30% of their revenues on advertising certain drugs, you can presume they're making more than 30% of their revenues from those drugs, and that in order to make those revenues, advertising is necessary. Money spent advertising Cyalis, therefore, isn't taking money away from research and development on, say, asthma treatments. Without the advertising, Cyalis wouldn't be profitable, and its profits wouldn't be available to the company for its general budget, which in turn is allocated in part to R&D of drugs that don't require extensive advertising to be profitable.

If those NPR commentators really think drug companies could be more efficient if they spent their money differently, they ought to find some investors and start their own companies. If their business model is really that superior, it should beat the pants off the established companies.

I think the one valid criticism of drug companies' expenditures is in the area of executive compensation, but that's not a problem unique to drug companies. Heck, even do-gooder non-profit organizations pay their CEOs obscene amounts of money. The perception is that excellence is expensive. I happen to think that you could find competent people for a lot less than executives get paid, but then, I'd be happy watching movies full of no-name actors and watching minor-league baseball, and lots of people have different approaches.

[Snow]

Originally posted by TheProudDuck@Oct 19 2004, 10:39 AM

Biz,

Re: price controls -- Why stop with drug prices? Why not slap controls on oil prices, housing prices, college tuition prices, and so forth?

I say no, because there's no economic free lunch. In an efficient market, prices will be set at the most efficient level. Price something too high, and you lose buyers, whose additional consumption would increase your profit even if the price were lower (that is, selling 100 pills at $1 will make you more money than selling 40 pills at $2.) Price something too low, and you'll have excess demand.

The vast majority of new prescription drugs are developed by American companies. Obviously we're doing something right.

Not a perfect argument...

Because of patents, pharma companies enjoy a form of govt protected monopolistic/ogopolistic market power and can set a price not swayed by balanced market forces... and, regardless of the reason, when foreign countries pay less than the U.S for drugs, we are in effect subsidizing their healthcare.

[Guest TheProudDuck]

Originally posted by Snow+Oct 19 2004, 07:09 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Snow @ Oct 19 2004, 07:09 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin--TheProudDuck@Oct 19 2004, 10:39 AM

Biz,

Re: price controls -- Why stop with drug prices?  Why not slap controls on oil prices, housing prices, college tuition prices, and so forth?

I say no, because there's no economic free lunch.  In an efficient market, prices will be set at the most efficient level.  Price something too high, and you lose buyers, whose additional consumption would increase your profit even if the price were lower (that is, selling 100 pills at $1 will make you more money than selling 40 pills at $2.)  Price something too low, and you'll have excess demand. 

The vast majority of new prescription drugs are developed by American companies.  Obviously we're doing something right.

Not a perfect argument...

Because of patents, pharma companies enjoy a form of govt protected monopolistic/ogopolistic market power and can set a price not swayed by balanced market forces... and, regardless of the reason, when foreign countries pay less than the U.S for drugs, we are in effect subsidizing their healthcare.

True, and true. What to do about it?

You could diminish the value of a patent by shortening its length. The likely effect would be that prices would be set higher in the short run, to wring more money out of the shortened monopoly time frame.

Or you could do away with patent protection altogether. But patent protection is what gives inventions the vast majority of their value. Do away with it, and you'll get fewer inventions.

Or you could impose a special tax on profits from patent rents. That might avoid the price distortion of the first suggestion, but as with anything, you lower the return on an activity, you'll get less of it. The same thing would hold if we imposed price controls like much of the rest of the world.

It all comes down to what we think the balance of innovative dynamism vs. low prices ought to be. As a general rule, command-and-control policies don't work as efficiently as market mechanisms, so my default setting is to oppose more controls. The only area where I'd consider bending a little would be in the areas of truly inelastic goods like life-preserving drugs (as opposed to your Viagras and Zolofts). If the government determined that it were important to keep these prices below market levels, the best method would probably be to guarantee the drug companies a set, high rate of return on investment. If the government just provided a direct subsidy, like it does with student financial aid, the companies would probably just raise their prices by an equivalent amount, just like colleges do.

[Snow]

Yesterday Kerry complained that Bush caused the flu vaccine shortage.

Today Kerry complained that Cheney got a flu shot - even though Cheney met the CDC criteria on account of his cardiac hx ( http://www.drudgereport.com/flashfs.htm ).

In an unrelated story it has been learned that tomorrow Kerry will complain that George Bush caused the created influenza in a lab, caused the flu vaccine shortages, gave all available vaccines to his friends and family in hopes that the unvaccinated democrats would get the flu and die, married the devil, sired an army of satanic offspring and listens to Christina Aguilera while high on dope.

[Snow]

PD,

I certainly don't have a solution but the difficulty of applying free-market ideology to the pharmaceutical industry is that the the industry is not a free market. There are significant barriers to entry... cost, regulation, patents. There are all sort of interference on prices, Medicare and Medicaid rates, foreign markets. It is hard to adopt the stance of let the market sort is all out when there are so many barriers to market equilibrium.

[Winnie G]

Canada has price controls for prescription drugs?

Ok that is news to me. Can you give me the link to that?

I ask this not to say your wrong but because if it was not for military and when he retires the VA paying for my hubbys prescription drugs one prescription cost $3000.00 a month and even the low Canadian dollar that’s WAY… to much. He takes five different drugs just to make it through the day with just minimal pain, thanks to a 700-pound tank track injury in his youth. Then two years ago after a battle fitness test he stepped off even ground in to a gopher hole and undid the surgery to rebuild his lag all though years ago.

My drug costs are around $150.00 a month and I only pay 20% because of drug converge from our insurance.

Imatics (sp) the migraine prescription cost $20.00 a pill!

Viox (sp) the arthritic drug ran me $85.00 dollars a month

I could go on but you can see were I ask about price controls.

If Canada has price controls WHAT ARE YOU IN THE US PAYING!

[Winnie G]

I don’t mean this to be mean but I had a flu shot yesterday at work with the rest of the staff and there was no cost to receive one, I have Asthma and our work is a resource center for families. We also house the base day care.

I don’t think Canadian government is going to ship vaccine in to the US till Canadians have theirs. But knowing the Canadian government you’ll receive it because that is what Canadian do.

[Guest TheProudDuck]

Originally posted by Snow@Oct 20 2004, 10:07 PM

PD,

I certainly don't have a solution but the difficulty of applying free-market ideology to the pharmaceutical industry is that the the industry is not a free market. There are significant barriers to entry... cost, regulation, patents. There are all sort of interference on prices, Medicare and Medicaid rates, foreign markets. It is hard to adopt the stance of let the market sort is all out when there are so many barriers to market equilibrium.

True -- but it was getting away from market mechanisms that largely caused the high prices in the first place. Slapping another layer of command-and-control on the process doesn't exactly inspire confidence.