I'm no economist. But...isn't this about math? Shouldn't there be just one answer? How/why are there so many different opinions on when Social Security will fail? Well... I could see a why...people with their own mysterious agendas plotting on how the money should be spent. Is this just a case of 2 + 2 = 5? People fighting over what to call the color blue?
Or maybe people with only half the facts or half the education trying to make decisions about a system they imagine they understand?
Oh wise people! Tell me! Posted by Raia (Member # 4700) on :
This may make me sound like a total idiot, but can someone please tell me just what, exactly, the social security problem is?
Posted by ricree101 (Member # 7749) on :
Well, there's a lot of things that make this complex. First of all, you can't perfectly predict future income. We pay money into the social security system to pay for those currently on social security. We do this in the hope that future genreations will be able to pay for us if we need it. Since we don't know how much people will be paying into the system several years down the line, we can't predict revenue. In addition, we cannot predict costs. This is especially true in the case of medical expenses. Medical costs have recently been growing rapidly, but the actual amount of the growth is hard to predict. Likewise, it is impossible to predict the death rates of people on social security, so we don't know how many people will actually be recieving benefits. The only option we have is to try and extrapolate from past performance, but that is not a given. Many estimates agree that there will at some point be problems, but there are just too many unknowns to give an accurate estimate.
Raia- The problem is that many people expect the social security system to run out of money. When this happens the US government will either have to cut back on benefits, draw on money outside of social security, or be unable to pay the benefits that are promised.
[ May 04, 2005, 04:21 AM: Message edited by: ricree101 ]
Posted by Raia (Member # 4700) on :
Oh, I see. Is it not a cycle? Does it not pay for itself?
Posted by ricree101 (Member # 7749) on :
No, it doesn't. When a person contributes to the social security system, they are not actually paying for their future benefits. They are instead paying for those currently recieving benefits.
There are 3 major problems with this:
1) Benefits are increasing (for example, perscription drug coverage). 2) Life expectancy is increasing, so therefore people are on social security a longer percentage of their life. 3) Shifting population percentages. As the boomer generation reaches retirement, the percentage of retired people vs working people has increased dramatically.
So basically, the expenses are rapidly increasing, but there is no similarly increasing revenue source.
Posted by Raia (Member # 4700) on :
Ah, that makes sense. So, basically, in order for this to work, people would just have to pay more and more and more social security, and they don't get to use it?
I see the problem.
Thanks for the explanation, ricree. Posted by ricree101 (Member # 7749) on :
You're welcome Raia. Now if only I knew how to fix it. Posted by Telperion the Silver (Member # 6074) on :
Thanks for that ricree101.
What about drugs? Isn't the high price of drugs our own invention? The rest of the world doesn't have to pay the same price, US citizens pay ten times more (or something like that). Again, I'm no economist, but can't the government force the drug companies to lower their prices? I think Canada did this. Of course the argument is that these huge prices fuel research. OSC did an article about this too...mentioning the fact that part of the problem is people living too long...and the fact that our drugs actually work (as opposed to 60 years ago).
Posted by Telperion the Silver (Member # 6074) on :
Fugu's brilliant. He'll know the answer. Russell! Get in here! Posted by Raia (Member # 4700) on :
Russell, here's the country. *hands Russell the country*
Now fix it.
Posted by ricree101 (Member # 7749) on :
The high prices aren't so much something of our own invention as they are created by those countries that heavily regulate their prices. There is certainly a huge cost that goes into researching each drug that makes it to market, as well as the many drugs that don't. Essentially, consumers in the US (and any similarly priced areas) are forced to subsidize the lower prices that people in other areas enjoy. If they didn't force the prices low, the US price would drop somewhat as it reached a reasonable average. Of course, the low priced countries would see a similar rise in cost. I can't really blame those countries, after all, it is a pretty good deal. That said, someone has to be left holding the bag, and in this case it happens to be us.
Posted by Bokonon (Member # 480) on :
The other issue is that we have been generating large surpluses for years from social security (more people putting in than taking out), but have basically loaned it to ourselves to pay for other government programs. Had we not done this, SS would have been solvent for the foreseeable future.
That was what the "lockbox" argument was all about 5 years ago.
-Bok
Posted by Rakeesh (Member # 2001) on :
It can't be fixed because we're relying on Congress and the White House to do the fixing.
Posted by twinky (Member # 693) on :
Drug prices don't have to be high, you know. You don't need to look any further than Pfizer's annual profits to see that. If America started regulating drug prices I don't expect Pfizer would become insolvent.
In other words, I think the "blame those damn socialists" argument is specious.
Posted by Rakeesh (Member # 2001) on :
*shrug* While I personally think the 'medical industry' needs to be taken out to the woodshed a little bit, so to speak, I confess I'm worried about the long-term ramifications of doing so.
You don't get cutting-edge research and amazing breakthroughs from companies that are merely avoiding insolvency.
Posted by twinky (Member # 693) on :
I don't think medicine should even be an "industry." But that's quite a tangent. Posted by TomDavidson (Member # 124) on :
"A company like Pfizer isn't going to decrease their bottom line because of drug price regulation."
Which is why we need profit controls, not price controls. Posted by twinky (Member # 693) on :
OOOooooOOOOO! I like that. I like it a lot.
Posted by Katarain (Member # 6659) on :
Someone please tell me if this is wrong.. it's what I "heard" years ago...
Originally, wasn't Social Security supposed to be the sort of system that what you pay in is what you get out? And there was a large population paying in, and so a president (I seem to remember Reagan), started spending that money like mad, leaving the mess he created of the SS system for someone else to clean up.
And if that is the case, and the government screwed up the system, shouldn't they pay back the money they stole from the SS system, and we go back to a "you get back what you put in" sort of system?? And how about they do this without laying off government employees, but rather with things like senator/congressman pay cuts, buying bargain green beans for the white house, and shopping at home depot for their hammers?
-Katarain
[ May 04, 2005, 10:11 AM: Message edited by: Katarain ]
Posted by Rakeesh (Member # 2001) on :
Minimize the thing for which people go into business...sounds good!
Posted by Katarain (Member # 6659) on :
Then we won't ever get anything fixed...and we're paying taxes to support a stupid ineffectual government.
Wow.. that's not new, is it?
Posted by Stephan (Member # 7549) on :
Just do what I do. Consider that portion of your paycheck gone forever. Assume you will not get social secuirty when you retire, and save with 401ks and IRAs.
Posted by Jacare Sorridente (Member # 1906) on :
There are a number of things wrong with social security which have fairly easy fixes: 1) The excess funds are invested in government bonds. Think about what this means. You pay social security taxes. A certain amount of that money is more than they currently need. This excess is used by the government to fund other diverse programs. The money which is borrowed by those other programs is paid back with interest> Where does the money to pay off the loan and interest come from? More taxes! So essentially the government gets an interest-free loan of your money (excess social security), lends itself money to fund programs by essentially raising your taxes without telling you (your SS money being lent out) and then you get to pay back both the principal and interest through taxes.
2) The retirement age is set based upon... random whim, really.
3) The benefits are indexed to wages rather than cost of living.
The easy fixes for these issues are as follows: make a law setting the markets in which SS money may be invested- perhaps corporate bonds or domestic stocks or some other economy-fueling market. Index retirement age to life expectation and increases in benefits to inflation or cost of living indices. Give a guaranteed fixed retirement age to people over 50 so they can plan ahead.
Voila! Social Security is fixed!
Posted by fugu13 (Member # 2859) on :
You missed one: Social Security tax is highly regressive, cutting off at a certain, fairly low, income, and harming the ability to save for retirement of those who will need it most.
Solution: remove the income ceiling on the tax and reduce the rate so that the overall amount taxed remains about the same.
Posted by Katarain (Member # 6659) on :
fugu, would you mind explaining your last post? What do you mean by regressive, and what's an income ceiling in regards to this? I'm pretty clueless about the way it works..
-Katarain
Posted by fugu13 (Member # 2859) on :
An earner only pays the approximately 6% (well, its actually over 12%, but the employer pays half making it seem smaller) on the wages he earns up to a certain amount. It goes up each year, I forget what it is now, but I think about $90k.
edit: oh, and regressive just means that people who make less pay a higher percentage of their wages than people who make more.
[ May 04, 2005, 11:10 AM: Message edited by: fugu13 ]
Posted by Katarain (Member # 6659) on :
Oh.. thanks.. so what was your solution to this? -Katarain
Posted by Katarain (Member # 6659) on :
nevermind.. I get it..
kinda. Posted by holden (Member # 7351) on :
quote: You missed one: Social Security tax is highly regressive, cutting off at a certain, fairly low, income, and harming the ability to save for retirement of those who will need it most.
Solution: remove the income ceiling on the tax and reduce the rate so that the overall amount taxed remains about the same
In other words shift the burden of social security to the rich. Remove the last argument that Social Security is a individually funded retirement plan and not a wealth transfer just like welfare. "From each according to his ability, to each according to his need.."
Posted by TomDavidson (Member # 124) on :
"Remove the last argument that Social Security is a individually funded retirement plan and not a wealth transfer just like welfare."
I'm okay with that.
Posted by fugu13 (Member # 2859) on :
Given that the last illusion that its some sort of retirement thing might as well be a toothpick under a mountain, I see no particular reason to leave it there.
The way social security is actually used is to provide a sustenance for people troubled by circumstance. The current system only serves to undermine that actual use.
Better to do that efficiently than to do it badly, since we're already doing it.
And stop with the hyperbole, providing a pretty minimal stipend to people no longer able to work so that they can live their lives without starving to death or losing their home is hardly a particularly socialist thing to do.
Posted by holden (Member # 7351) on :
Despite the sarcasm of my last post, I am too. (I'm sure our reasons are very different. )
I am always in favor of calling a spade a spade. Social Security is a safety net for people that reach retirement with less than enough money to cover their needs. If I could opt our of the system in return for a small income tax increase that would be used to fund Social Security for the truly needy I would do so. On the other hand if we are going to continue to call this a retirment plan for everyone, we should make it so by adding personal accounts we can control.
Posted by holden (Member # 7351) on :
quote:The way social security is actually used is to provide a sustenance for people troubled by circumstance. The current system only serves to undermine that actual use.
What a rare circumstance. I think we are in complete agreement.
Posted by fugu13 (Member # 2859) on :
Not so rare as you might believe.
Posted by holden (Member # 7351) on :
Posted by twinky (Member # 693) on :
Tangent:
quote:Minimize the thing for which people go into business...sounds good!
That shouldn't be why people go into the medical "business."
Posted by holden (Member # 7351) on :
Yes people who go into medicine should have no interest in making money. They should sacrifice everything for the greater good.
If you take away the profit incentive, the speed at which we inovate in medicine or any other field would slow to a crawl. I am not suggesting that money is the only motivation, but I am suggesting that it is an essential one.
Posted by aspectre (Member # 2222) on :
The "high profits are needed for research" is absolute nonsense. Drug companies spend more than twice as much on advertising as they do on research. Which is most of the "research" that US customers overpay for.
Basic drugs research is carried out at universities and government&trustfund-supported institutes such as ScrippsOceanographic or Salk by postgraduate students financed primarily on government grants.
What Research&Development that drug companies actually do are: Clinical(secondary)trials specificly for FDA approval; R&D of manufacturing processes; R&D on isomeric forms of the drug for easier manufacturing&purification -- eg adding three peptides to BGH so the hormone doesn't tangle&clump and clog the filters -- and to either get around someone else's monopoly or to maintain the profitability of their own monopoly; And repackaging their drug -- eg putting it into a 24-hour capsule -- to maintain their monopoly beyond the years provided by the law for the original patent.
The actual efficacy&safety of patented drugs is both dubious and overhyped due to confidentiality agreements censoring researchers and laws allowing prescriptions for non-approved uses.
[ May 04, 2005, 02:36 PM: Message edited by: aspectre ]
Posted by Belle (Member # 2314) on :
I have said this before in other threads, I'll say it again and once more add the disclaimer that I'm no apologist for pharmaceutical companies, I know first hand the kind of outrageous spending that goes on, having worked for one.
However, the US drug prices are not just a whim of the pharmaceutical company. It is actually more expensive to sell drugs in the US than it is in other countries. It's due to a little thing called the FDA which so highly regulates drug manufacture, shipping, and storage that it's highly expensive to make and move drugs across the country. Most pharmaceutical companies spend a lot of their money on regulatory staff whose sole job is to make sure they don't run afoul of FDA regulations.
Sell drugs to a foreign country, and they don't have to worry about paying top dollar for temperature controlled warehouses with the right amount of security and tracking procedures in case there is a recall. You do have to do those things in the US. By the time the drug reaches the retail market, that regulatory cost has to be passed along.
It makes our drugs expensive, yes. It also makes them safe and reliable. Everything has a cost.
Posted by twinky (Member # 693) on :
quote:Yes people who go into medicine should have no interest in making money. They should sacrifice everything for the greater good.
Money should not be the primary motivation. I know you winked, but I want to be clear that what you said is very significantly different from what I said.
Belle, that's a good point, but you make it sound as though no countries other than the US regulate distribution and storage of drugs. In Canada's case, for example, we do have such regulations, but the government essentially eats the cost differential because we have a public system.
Posted by holden (Member # 7351) on :
quote: but the government essentially eats the cost differential because we have a public system.
As long as it is the government paying and not the people than no problem.
quote:Money should not be the primary motivation.
I agree. However, if doctors and other medical profesionals made say as much as construction workers, would that effect the quality of our medical care? Income potential cannot be ignored as an incentive for inteligent people to enter health care. If we had to rely on only those few truly selfless individuals to take care of us when ill I would hate to see the line at the doctor's office.
Posted by Katarain (Member # 6659) on :
quote: As long as it is the government paying and not the people than no problem.
Where do you think the government gets its money???
-Katarain
Posted by holden (Member # 7351) on :
My point exactly. If only there were a more sarcastic smiley.
Posted by fugu13 (Member # 2859) on :
Of course, its overly simplistic to say that the government only gets its money from the people. While this is literally true of the currency representation, the government (in part by its mere presence) creates considerable value in the economy and the currency.
Posted by Katarain (Member # 6659) on :
Well, let's consider your options...
"whatever... like that'd ever happen." "what I just said was so clever" "look at that! it's so ridiculous and funny!" "as if. stupid government." "argh! that makes me so angry! It's so stoopid!"
Those woulda worked better...
-Katarain
Posted by holden (Member # 7351) on :
Thank you for the smiley tutorial. I should have gone with
In my defense, I lean libertarian and nearly all of my few posts have been about the benefits of smaller government. I understand now that I will need a much higher post count before my sarcasm can be implied. Posted by Belle (Member # 2314) on :
Other countries do have regulatory agencies, but none to the extent of the FDA.
I can't stress enough how much money and manpower and effort goes into staying within regulatory compliance in the US. Nothing in any other country compares, and we sold internationally, and even had an international sales department. It had three people in it. To handle everything internationally, all sales, all marketing, all regulatory issues. In contrast, our in-house domestic sales regulatory department had six people on staff. Our marketing staff was only five people, so regulatory trumped marketing.
Posted by Katarain (Member # 6659) on :
I personally don't memorize the views of each member of the board...
You gotta be more obvious with sarcasm in written speech, anyway.
I find it useful to move into valley girl mode. Like that's just the best idea I've heard in like forever. Wow! Right?
-Katarain
Posted by twinky (Member # 693) on :
quote:My point exactly.
Right. We pay higher taxes than you because we have things like public health care. Not sure where you got the idea that I was insinuating something else.
Posted by aspectre (Member # 2222) on :
Which is no point whatsoever, holden. UStaxpayers already pay for basic drug research through the federal government's National Institure of Health, the Center for Disease Control, etc. And UStaxpayers WAY overpay for any R&D done by drug companies: directly through tax write-offs; and indirectly through WAY overpriced drugs paid for by the military's CHAMPUS, VeteransAdministration, CivilService benefits, etc, Medicaid, and soon Medicare.
[ May 04, 2005, 03:51 PM: Message edited by: aspectre ]
Posted by twinky (Member # 693) on :
quote:Other countries do have regulatory agencies, but none to the extent of the FDA.
That's true, yes. I wasn't saying that they were equivalent, just that they exist. Posted by Belle (Member # 2314) on :
Does anyone have a breakdown of, say Pfizer's annual report, with each section of spending separated out so we can look at it objectively?
I hear people say all the time that sales and marketing take up most of their budget - I'm not going to deny that I'm just curious to see the actual numbers. For example, what's included in sales and marketing costs? Is it strictly salary and benefits for salespeople and marketing literature and advertising?
Edit: I should add I'm not asking people to do legwork I can do - I've already looked at the annual report on Pfizer's website, and it does include information about incomes and R&D but I can't find in it the amount spent on sales and marketing costs. Maybe I've just missed it, it's a very long report. I just wondered if there was somewhere else with all this stuff broken down - when people say "Drug companies spend more on sales and marketing than on R&D" where are they getting that information?
[ May 04, 2005, 03:52 PM: Message edited by: Belle ]
Posted by twinky (Member # 693) on :
I don't, but I agree that it would be interesting to see. *goes off to battle with Google*
Posted by twinky (Member # 693) on :
From Pfizer's 2004 financial report:
quote:Advertising expenses relating to production costs are expensed as incurred and costs of radio time, television time and space in publications are expensed when the related advertising occurs. Advertising expenses totaled approximately $3,490 million in 2004, $2,936 million in 2003 and $2,298 million in 2002.
In those three years, R&D expenses were $7,684 million, $7,487 million, and $5,208 million, respectively. "Cost of sales" was $7,541 million, $9,589 million, and $4,014 million over the three years.
Advertising is part of the "selling, informational, and administrative expenses" section of the breakdown. The totals for that section were $16,903 million, $15,108 million, and $10,829 million, respectively.
So the bottom line is that as far as I can tell it depends on the finer breakdown of that secion. We know how much of it is direct-to-consumer advertising but at the moment I'm not clear on what the rest of the section includes.
Posted by holden (Member # 7351) on :
Twinky, when you said "the government eats it" (or something like that)I thought you were implying that the money was not coming out of your pocket. I see from your response that that is not the case. I hereby withdraw my sarcastic remark. Posted by The Rabbit (Member # 671) on :
Why can't we fix the problem with Social Security?
As Mark Twain once said "It's difficult to predict, especially the future"
quote:But...isn't this about math? Shouldn't there be just one answer? How/why are there so many different opinions on when Social Security will fail?
The idea that because math is involved, there is only one answer is a common fallacy. Many mathematical problems have multiple solutions, but even that is not the central problem. In order to predict what will happen with Social Security in the future you need to know alot of things about the future. For example, you need to know how long on the average people will live after they retire. You need to know how birth rates will change, the average age of people when they enter the work force, rates at which people will become disabled or widowed. You need to know how earnings on the Social Security reserve will compare to overall economic growth. And you need to know exactly how these things will vary with time. We don't actually know any of those things so economists have to make educated guesses about dozens of variables before they can even start the mathematical models. Given all the uncertainties, its possible for people to manipulate the models to give an answer that is favorable to their political agenda. I find it curious that none of these groups ever detail the assumptions in their models (at least not in the public debates). It would be much easier to make understand the numbers if groups would say "assuming that the average life expectancy in 2040 is 90, Social Security will be solvent until 2050 but if the average life expectancy rises to 95, Social Security will only be solvent until 2045. I suspect that the differences are caused by much more subtle differences, but still It would be good to know what assumptions are being used in these projections
The best we seem to be able to say is that Social Security will be solvent for something between 40 and 60 years into the future. That still along ways off which is why the predictions are so uncertain.
Posted by The Rabbit (Member # 671) on :
The second part of my answer gets a bit more esoteric.
We can't solve the Social Security problem because we aren't being entirely honest about the nature of the problem. The Bush administration states the future deficit in Social Security as the motivation for creating private accounts even though private accounts will unquestionable increase the future deficit. The mostly unspoken problem with social security is that it has a relatively poor yield when compared with other pension funds. When I look the anticipated pay out for my University pension plan (TIAA-CREF) verses the anticipated pay out for Social Security, I'm getting alot more bang for my buck out of TIAA-CREF. But of course, SS is alot safer and considering how many corporate pensions funds have gone bankrupt over the past decade, safety is not a bad attribute.
I don't know all the reasons that SS performs so poorly. Part of the problem is that SS acts not only as a pension plan but also in many respects as a life insurance policy and a long term disability plan. We expect alot more from SS which is one reason it has lower returns. One possible way to reform SS is to compare it to many of the State pension funds that out perform SS and determine whether SS can be managed to yeild a higher return without turning to high risk investiment strategies. I haven't heard anyone discuss this option in any detail.
Posted by The Rabbit (Member # 671) on :
One last dirty little problem with SS is that the government has been borrowing from the SS fund to cover deficits in the Federal Budget. So while SS is solvent on the books for at least 40 years, the Feds will have to pay off the loans much sooner than that. In other words, our elected officials have been raiding our pension plan. As soon as the SS surplus decreases below some level, the dung is going to hit the proverbial fan and politicians are going to have deal with the reckless fiscal policies that have characterized the last 3 republican administrations.
Posted by aspectre (Member # 2222) on :
SocialSecurity performs quite well. The mistake is in comparing it to pension plans. It isn't one. It is a direct payment from the current generation to the past generation for the capital improvements they have made to the nation.
The "SocialSecurity is a pension fund" is pure hogwash generated by "conservative"s and championed by Reagan to raise taxes on workers while decreasing taxes on the parasitic class: inheritors, trustfund babies, and those who conduct their financial affairs.
[ September 25, 2005, 11:10 AM: Message edited by: aspectre ]
Posted by holden (Member # 7351) on :
quote:while decreasing taxes on the parasitic class: inheritors, trustfund babies, and those who conduct their financial affairs.
Why would you consider those who conduct the financial affairs of the wealthy parasites? Why are those that inherit wealth parasites? Would you consider someone who lives on a welfare check a parasite? Just wondering.
Posted by no. 6 (Member # 7753) on :
Well stated, Rabbit.
Posted by Hobbes (Member # 433) on :
quote:That [money] shouldn't be why people go into the medical "business."
If I get small pox I don't care if the guy who invented the vaccine did it for money or not, just give it to me.
Hobbes Posted by holden (Member # 7351) on :
I'm with Hobbes.
Posted by Hobbes (Member # 433) on :
Of course I'm flattered, but I'm already with someone.
Hobbes Posted by holden (Member # 7351) on :
I guess I'll get in line.
Posted by twinky (Member # 693) on :
quote:If I get small pox I don't care if the guy who invented the vaccine did it for money or not, just give it to me.
And if he charges more than you can afford out of his desire for money, then you die.
Edit: Er, that sounds a bit snarky. I just don't think your example shows anything wrong with my view as you quoted it.
[ May 05, 2005, 01:31 PM: Message edited by: twinky ]
Posted by Hobbes (Member # 433) on :
I'm saying that an argument about how much is reasonable to charge or how what restrictions there should be is fine, I agree, but I don't see why we should question the motives of those who go into a life saving buisness, or why it even matters. If they save my life I don't care if they did it to impress their boyfriend, my life is saved.
Hobbes Posted by twinky (Member # 693) on :
Well, how about a sort of inversely analogous case: does intent matter in a murder? I'm sure it matters to both of us. So then to me, intent matters in all cases, whereas to you it doesn't matter in at least one case (that of a person choosing a life-saving profession). That's fine, but it doesn't make my view at all unreasonable.
Posted by Bob the Lawyer (Member # 3278) on :
quote: The high prices aren't so much something of our own invention as they are created by those countries that heavily regulate their prices.
Note: Canadian prices are (generally) set by taking the median cost of the drug in other developed countries with the stipulation that no drug may cost more than a current drug on the market that does the same thing. It’s not like we pull numbers out of a hat and declare that to be the price.
That aside, the notion that Americans are subsidising lower costs in other countries seems foolish to me. If the drug companies were not making ample money by selling these drugs to other countries even at the lowered prices they simply wouldn’t do it. That the American market will support a higher market price is not the fault of Canada, England, or any other country with price controls.
quote: The problem is corporate culture. A company like Pfizer isn't going to decrease their bottom line because of drug price regulation. They will just focus more on areas that are guaranteed to make a profit, and research will suffer.
This, of course, is already happening. There is a reason that the vast majority of drugs released are “me too” drugs that don’t really do anything new and there is little to no work in developing cures over treatments (ie: Look at the decline of penicillin-type drugs in development now (I believe it is 2) vs. how many were in development 10 years ago (I believe around 100). It’s long, hard, costly, and you only reap profits for a week or two. There’s no money in that. Or look at the global decrease in the development and manufacture of vaccines.)
quote: What Research&Development that drug companies actually do are: Clinical(secondary)trials specificly for FDA approval; R&D of manufacturing processes; R&D on isomeric forms of the drug for easier manufacturing&purification -- eg adding three peptides to BGH so the hormone doesn't tangle&clump and clog the filters -- and to either get around someone else's monopoly or to maintain the profitability of their own monopoly; And repackaging their drug -- eg putting it into a 24-hour capsule -- to maintain their monopoly beyond the years provided by the law for the original patent.
Quoted here because aspectre is very much correct. I believe I’m the only person here who has designed drugs both for Big PharmaTM and for Government Funded UniversityTM. The kind of work most people envision as “R&D” simply isn’t being done by large companies. It’s too risky. Better to take something you already have a patent on, repackage it, and get another patent. Or take two drugs already on the market and package them together, work like that. This is not to say that no real innovation is occurring, but it doesn’t take a genius to look through publications and see how few are by drug companies, or look at who’s presenting at conferences. Granted that’s a somewhat skewed perception as many drug companies won’t let you publish because it can only harm their interests, but it’s all a layperson has.
quote: Sell drugs to a foreign country, and they don't have to worry about paying top dollar for temperature controlled warehouses with the right amount of security and tracking procedures in case there is a recall. You do have to do those things in the US. By the time the drug reaches the retail market, that regulatory cost has to be passed along.
Yikes! What country were you selling to? It sure as heck wasn’t a first world one, I can assure you that. Tracking, temperature control, these are all a matter of course in shipping run-of-the-mill chemicals, let alone something that’s going to wind up in the human body. Which is not to say that the FDA doesn’t make things expensive, but it’s not for these reasons. I think there are two primary reasons why the American system is more expensive: The staff required to keep track of all these regulations and which myriad of forms has to be signed by who, etc. (I remember working on an NDA; it was nuts.) And the extra tests that the FDA requires, both the cost of test and the money lost by not having the drug on the market while you do them. There are certain trials that are required by the US that aren’t required by other countries so it’s not unusual for an American country to have their drug released in the US years after its European release, for example.
quote: It had three people in it. To handle everything internationally, all sales, all marketing, all regulatory issues. In contrast, our in-house domestic sales regulatory department had six people on staff. Our marketing staff was only five people, so regulatory trumped marketing.
This is something of a misrepresentation, Belle. The US is also by far and away the largest market for pharmaceuticals. The sheer volume of orders will require more staff; regardless of how complicated the shipping.
Posted by twinky (Member # 693) on :
I was wondering what you'd have to say on this subject.
![[Wink]](wink.gif)
![[Smile]](smile.gif)
![[Razz]](tongue.gif)
![[Roll Eyes]](rolleyes.gif)
"whatever... like that'd ever happen."![[Laugh]](graemlins/laugh.gif)
"look at that! it's so ridiculous and funny!"![[Grumble]](graemlins/grumble.gif)
"as if. stupid government."![[Wall Bash]](graemlins/wallbash.gif)
"argh! that makes me so angry! It's so stoopid!"