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Medical Big Pharma - giving to get?

  1. May 30, 2010 #1
    How much money does a pharmaceutical company lose by giving away 1,000,000 pills to the destitute rather than selling them at $10 each to those with insurance?
     
  2. jcsd
  3. May 30, 2010 #2

    Pengwuino

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    Can't be more than $10,000,000 :biggrin:

    Should this be in the math forums?
     
  4. May 30, 2010 #3
    I withdraw this thread.
     
  5. May 30, 2010 #4

    Ygggdrasil

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    Actually, it could be quite a bit more. How do you think investors would react to a company reporting that its profits have dropped by millions of dollars? Wouldn't the stock price of the company go down, lowering the value of the company? It seems like the stock market may offer strong incentives not to give away free drugs to the poor.
     
  6. May 30, 2010 #5

    Andy Resnick

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    Depends if any of those 1,000,000 recipients have a bad reaction and sue the company.
     
  7. May 30, 2010 #6
    The stock price is affected by many things, and $10M is not that much when profits are in the hundreds of millions or billions. Even big corporations can be altruistic (and it's good public relations).

    EDIT: The big cost is drug development. Once a drug is approved, the manufacturing costs are usually pennies on the dollar. After development costs are recovered, the price per pill is somewhat artificial. Companies can recover the costs of give-aways by raising prices elsewhere if they wish.
     
    Last edited: May 30, 2010
  8. May 30, 2010 #7
    It's 1 million pills, not recipients. Whatever the size of the treated population, large pharmaceutical companies maintain full-time legal staffs and retainers. Usually the only real extra costs are if they lose a big case, or much worse, if they have to take a drug off the market (like Merck with Vioxx(c)).
     
    Last edited: May 31, 2010
  9. May 30, 2010 #8
    if it costs $1 to manufacture 100 pills, then you just spent $10,000 on marketing.

    if sales go up because of it, then you profit, and you never would have made a sale to the destitute in the first place (not without government healthcare, at least).
     
  10. May 30, 2010 #9
    Last edited by a moderator: Apr 25, 2017
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