News Is Healthcare Hype Driven by Aging Baby Boomers and Big Pharma's Tactics?

[Smurf]

Being an observer mainly, but recently a campaigner and supporter for the Green Party of BC in the last provincial election I've wondered about the emphasis on Healthcare in the last several elections, federal and provincial. It seems to me this is creating the largest hype these days; what's the best way to deal with healthcare, who should publicize healthcare systems, who's doing a better job at keeping doctors in Canada, et cetera.
The biggest cause for this, I would hypothesize, is the rising age of the Baby Boom children, and respectively their reliance on the provincial healthcare systems and, because they are retiring and not putting back into the systems, putting a strain on the system.
My question is this: When the baby boom generation is gone, will there be the same emphasis on healthcare, and if not, what should be put the money into instead?

 

[vanesch]

The biggest cause for this, I would hypothesize, is the rising age of the Baby Boom children, and respectively their reliance on the provincial healthcare systems and, because they are retiring and not putting back into the systems, putting a strain on the system.

I think that a compulsory military service for the elderly in democratizing missions abroad would take care of the problem

 

[Pengwuino]

I think that a compulsory military service for the elderly in democratizing missions abroad would take care of the problem

Thats a horrible idea! I mean... that's just sickening... do you know how expensive that cannon fodder is?

 

[loseyourname]

As the healthcare industry grows, we'll just be keeping more people alive longer. Doing so ensures that, going forward, we will continue to have more and more elderly people around. It's a cycle. The more there are, the stronger their political power, the more money spent on healthcare to keep them alive. The more that are kept alive, the more there are. The only thing that'll solve this problem is to keep people working longer. The current retirement age is outdated and based on people being expected to die long before they are now dying.

 

[Antiphon]

Even the young have trouble getting healthcare in Canada.

It's the result of socialized medicine and it's associated incapability
of dealing with resource allocation.

Canadians who are desperate and/or know what to do come to the US
and pay cash. There's no shortage of beds and no lines here because
hopsitals are much better at planning their resource needs than a remote
government beaurocrat. There's also competition between hospitals so that
poor service goes urewarded- another missing concept from socialized medicine.

 

[stoned]

anything with soci... in the beggining is bad and evil.

 

[fourier jr]

Canadians who are desperate and/or know what to do come to the US and pay cash.

rush limbaugh tried to claim that once, & couldn't/didn't even come up with anecdotal evidence for that. I've never heard of anybody doing that. sounds like something ann coulter would say.

There's no shortage of beds and no lines here because hopsitals are much better at planning their resource needs than a remote government beaurocrat.

steffie woolhander & david himmelstein wrote in the new england journal of medicine that the per-capita administrative costs of Canada's system are roughly 1/10 of the costs in the US. they attribute the huge costs to the amount of duplicate copies of people's paperwork, etc & admin.

There's also competition between hospitals so that poor service goes urewarded- another missing concept from socialized medicine.

are you trying to be funny, or are you for real? since when does someone "shop around" for the best deal? especially when they're on the way to the emergency room? or maybe someone who is ill for some other reason, or an elderly person? those are the people who would need a hospital's services most, and they can't comparison shop. once they're in there, a patient probably can't determine whether or not 7 days in the hospital or 2 days in the hospital & 12 days in a hospital-owned nursing facility (the better option for the hospital) would be better. hospital chains set up shop where there won't be much competition, and most americans live in areas too sparsely populated to have competition. the US system is so heavily subsidized anyway that a true free market is some kind of fantasy.

 

[Antiphon]

Sorry to hit such an old thread. These objections deserve answering.

rush limbaugh tried to claim that once, & couldn't/didn't even come up with anecdotal evidence for that. I've never heard of anybody doing that. sounds like something ann coulter would say.

Everything Ann Coulter says is correct and/or amusing. What's your point?
The link at the bottom has living breathing anecdotes for you to mull over.

steffie woolhander & david himmelstein wrote in the new england journal of medicine that the per-capita administrative costs of Canada's system are roughly 1/10 of the costs in the US. they attribute the huge costs to the amount of duplicate copies of people's paperwork, etc & admin.

This doesn't explain the reasons for Canada's quality of care being poor.
It only explains that US healthcare could be made yet more efficient.
It's quality of care is not questioned by anyone including you.

are you trying to be funny, or are you for real? since when does someone "shop around" for the best deal? especially when they're on the way to the emergency room? or maybe someone who is ill for some other reason, or an elderly person? those are the people who would need a hospital's services most, and they can't comparison shop. once they're in there, a patient probably can't determine whether or not 7 days in the hospital or 2 days in the hospital & 12 days in a hospital-owned nursing facility (the better option for the hospital) would be better. hospital chains set up shop where there won't be much competition, and most americans live in areas too sparsely populated to have competition. the US system is so heavily subsidized anyway that a true free market is some kind of fantasy.

I assure you I'm not being funny. A hosptial's emergency roon is just
one service. I in fact DO shop around for hospitals by reputation before
I have a surgury performed, etc. Candadians must go where they're told to.

Here's an excellent editorial article about the ills of Candaian health care.

http://www.steynonline.com/index2.cfm?edit_id=23

 

[Smurf]

Sorry to hit such an old thread. These objections deserve answering.

They deserved better answering that what you gave though, this is just ridiculous.

Everything Ann Coulter says is correct and/or amusing. What's your point? The link at the bottom has living breathing anecdotes for you to mull over.

No Offense, but in general people who like Ann Coulter don't understand irony or have any knowledge of politics of economics but DO possesses an extremely good selective memory.

I assure you I'm not being funny. A hosptial's emergency roon is just
one service. I in fact DO shop around for hospitals by reputation before
I have a surgury performed, etc. Candadians must go where they're told to.

Actually for most services we arn't told to go anywhere except Room X on Floor Y. And if we do need special services it doesn't matter that we don't get to 'shop' around because IT'S ALL FREE ANYWAYS. You talk about 'shopping around' as if it's more important than the service it's self.

Here's an excellent editorial article about the ills of Candaian health care.

http://www.steynonline.com/index2.cfm?edit_id=23

Antiphon, that's the most ridiculous article I've ever read about healthcare.

The Canadian columnist Lorne Gunter quoted one of those old jokes intended to reveal national character. This was the one about the American, the Canadian and the Soviet granted a wish apiece. The American asks to be transported to Montana and given the chance to build a huge cattle herd. The Canadian asks that his rich neighbor with the big herd be taxed more so that Ottawa can give him a grant to buy land and cattle just like the rich neighbor.

The genie then asks the Soviet, “Do you want me to give you land and cattle like your neighbour’s, too?”

“No,” says the Soviet. “Just kill my neighbor’s herd.”

What the **** does that have to do with discussing Healthcare.

 

[The Smoking Man]

anything with soci... in the beggining is bad and evil.

'Society'?

'Social Mores'

'Church Social' ... Okay ... I'll give you that one.

 

[Smurf]

Socializing, sociology, social democray

Hey, maybe you can't generalize after all.

Not that they'll stop just because they've been proven wrong.

 

[SOS2008]

As the healthcare industry grows, we'll just be keeping more people alive longer. Doing so ensures that, going forward, we will continue to have more and more elderly people around. It's a cycle. The more there are, the stronger their political power, the more money spent on healthcare to keep them alive. The more that are kept alive, the more there are. The only thing that'll solve this problem is to keep people working longer. The current retirement age is outdated and based on people being expected to die long before they are now dying.

Holy cow, how depressing.

Longer lives versus quality of life needs to be considered as well. So people with arthritis, hearing loss, and problems with bladder control are supposed to keep right on working? Geez. And after working all those years they can't enjoy a little bit of their golden years.

I believe there can be a happy medium between socialized and free market healthcare. I don't see anything wrong with requiring companies to provide health insurance, or insurance companies to provide affordable insurance, or health providers making a reasonable profit--especially the phamaceutical industry. The provision of healthcare, particularly preventative medicine, is much more cost effective than not treating people properly. Just look at Medicaid, which BTW is not just for the elderly. It's bankrupt, and in large part due to exploitation by unethical doctors who are making a little too much money.

 

[Smurf]

That's a horrible solution SOS, you're just going to encourage the problem in a different way.

 

[SOS2008]

That's a horrible solution SOS, you're just going to encourage the problem in a different way.

If you're not joking, please enlighten me and share your solution to the problem.

 

[TheStatutoryApe]

As the healthcare industry grows, we'll just be keeping more people alive longer. Doing so ensures that, going forward, we will continue to have more and more elderly people around. It's a cycle. The more there are, the stronger their political power, the more money spent on healthcare to keep them alive. The more that are kept alive, the more there are. The only thing that'll solve this problem is to keep people working longer. The current retirement age is outdated and based on people being expected to die long before they are now dying.

Holy cow, how depressing.

Longer lives versus quality of life needs to be considered as well. So people with arthritis, hearing loss, and problems with bladder control are supposed to keep right on working? Geez. And after working all those years they can't enjoy a little bit of their golden years.

I believe there can be a happy medium between socialized and free market healthcare. I don't see anything wrong with requiring companies to provide health insurance, or insurance companies to provide affordable insurance, or health providers making a reasonable profit--especially the phamaceutical industry. The provision of healthcare, particularly preventative medicine, is much more cost effective than not treating people properly. Just look at Medicaid, which BTW is not just for the elderly. It's bankrupt, and in large part due to exploitation by unethical doctors who are making a little too much money.

I pretty much agree with SOS. I understand your logic Loseyourname, but you have to consider that the health of most people will definitely be deteriorating by around 60. Aside from not being able to enjoy their golden years they will also have a harder time seeking employment. On top of not wanting an employee to be retiring on them shortly after hire (which with your proposal wouldn't be a problem) they also would probably prefer not to hire someone who will almost undoubted suffer health issues that will effect their ability to work.

 

[loseyourname]

Holy cow, how depressing.

Longer lives versus quality of life needs to be considered as well. So people with arthritis, hearing loss, and problems with bladder control are supposed to keep right on working? Geez. And after working all those years they can't enjoy a little bit of their golden years.

Well, obviously you can't make a person work if they're medically incapable of it. Age has nothing to do with that. I had to stop working recently for medical reasons and I'm 24. Still, healthcare for the retired is going to have to be paid for somehow, and as long as lifespans keep increasing, there will be more retired people to care for and the costs will rise.

I believe there can be a happy medium between socialized and free market healthcare. I don't see anything wrong with requiring companies to provide health insurance, or insurance companies to provide affordable insurance, or health providers making a reasonable profit--especially the phamaceutical industry. The provision of healthcare, particularly preventative medicine, is much more cost effective than not treating people properly.

That's a pretty vague paragraph without any real suggestions. I don't mean to sound rash, but let us take this seriously. More preventive medicine (which I am in favor of, by the way) just means more people staying alive longer and being healthier into the golden years. We have two choices: 1) Continue to place the burden of the expense for their care on those who are younger and still working, whether through insurance premiums or taxes. 2) Transfer some of the cost to the elderly people being cared for. As far as I can see, there are two ways to accomplish 2: 2.1) Instituting some kind of deferred payment program whereby a person pays higher premiums while young, but some of that money is saved away to pay their premiums when they are retired. 2.2) Raise the retirement age.

If medicine continues to do its job and keeps people healthy and capable of working well past sixty-five, I can see no reason not to do 2.2, aside from the natural desire not to want to work after having it done it for the last forty years. Don't get me wrong; I'm not going to want to work any more when that time comes, either. Heck, I don't want to work right now, or ever, for that matter. But we do what we have to do, and I don't think it's fair that I should expect others to care for me when I'm perfectly capable of doing it myself, just because I'm old. Just to make clear again: I'm not saying that we should force people to work who are medically incapable of doing so. If you're in constant pain because of arthritis and can no longer here or hold in your urine, go ahead of retire. But if you're capable of working, do so. I don't consider it a loss in quality of life to have to work. Presumably by the time you're sixty-five, you've had plenty of time to finally get into a position that you enjoy somewhat and perhaps you've even been promoted several times during the forty years you've worked and might be in a lofty position of some sort. Perhaps not, but nonetheless, I haven't seen anyone with a better idea.

 

[Kerrie]

As a 32 year old full time worker, I am already seeing that I may be working well into my 70's, provided that I am in the health to do so. Honestly, I don't have a problem with this, there are many older people even now who work beyond the "retirement age" full and part time. Because it is understood they are "semi-retired", they take the time off they need.

Perhaps expecting a later retirement age for everyone is part of the solution, to help even out the costs and not place the burden of the debt on the young and healthy. If medicine is doing such a good job at helping our longevity and quality of life at an older age, I think it is only fair that those who are benefiting from that longevity and quality put something back into it.

Part of the health care issue America has versus Canada is it seems to me that Americans run to the doctors for more health issues simply because they can, where from what I have heard (and this could be completely false, so please correct me if so), Canadians don't have this "luxury" unless they have a dire need that affects them in more of an emergency situation. We Americans run our children to the doctor if they have a viral fever and request antibiotics for example. Do Canadians have this option I wonder?

We Americans have high standards of living, and that includes the freedom of seeing a doctor when we choose. Many other countries do not have this option or luxury. The fact that costs are going up for all aspects of healthcare shoulding be a surprise to us, we have taken it for granted far too long.

This issue has affected me personally because I pay nearly $4000 annually just in premiums alone for health insurance for myself and children only, and this doesn't include the deductibles, the co-pays, the co-insurance, which isn't paid at the rates it was even 10 years ago. Luckily, my children and myself are healthy, I can't imagine what the costs would be if we weren't.

 

[DM]

loseyourname

If medicine continues to do its job and keeps people healthy and capable of working well past sixty-five, I can see no reason not to do 2.2, aside from the natural desire not to want to work after having it done it for the last forty years.

This may be a preconception but what about employment? Aren't the elderly more vulnerable in becoming redundant?

 

[2CentsWorth]

I interpreted the "happy medium" described as not being socialized medicine, in which it is completely tax supported and operated by the government, but rather that it isn't a complete free market scenario either. Caps on percentage profits on drugs maybe, or better monitoring of Medicaid claims, or incentives for companies to provide health benefits, etc. -- what would be wrong with these things? Let's face it, health care is not affordable for too many people in this country, and they are actually costing us more money because they are not being treated early. And in a country of wealth, it is a shame that people don't have something so basic.

In reference to retirement, the age for Social Security is 65, isn't it? That is plenty old in my view. Moving it 67 or worse 70, well sure we'd save money, especially in view of the life span of men.

Come on, where is the "compassionate conservatism" (an oxymoron if I ever saw one).

 

[Kerrie]

The number of age is irrelevant, medicine has improved the quality of life for many recently then it has even 30 years ago...basically a 67 year old of 2005 can have the vitality of a 55 year old 30 years ago, for example. If costs continue to rise so high, the common middle class young worker will forgo health insurance all together, forcing the issue even more on those who need the medical care the most.

The owner of my company is 71 years old, has had hip replacement surgery, and takes very good care of himself...He has chosen not to retire, and stays active with running the company, yet takes 6 weeks off a year to travel. He does take advantage of medicare, but I admire him for continuing to work despite him being at retirement age. The one issue this can potentially impose however is while he may be physically able to do his job, his mental capacities can deteriorate to a point of being unable to function at work.

 

[Art]

his mental capacities can deteriorate to a point of being unable to function at work.

Like a lot of younger folk after a night on the town

 

[SOS2008]

I would suggest delving into the increase of obesity, diabetes, asthma, etc. Nonetheless, an important point is the choice of being retired, semi-retired, etc., and IMO that should be by available by age 60.

To be more specific about my earlier post:

Even those in group plans will tell you insurance premiums put a dent in the old paycheck. So I can't imagine trying to get affordable health insurance outside of a group plan, and many Americans are in this situation. If you have certain pre-existing conditions, you may not be able to get insurance at all. Insurance is expensive in large part due to fraud.

I've seen what various doctor offices submit to my insurance company--it's usually outrageous. And once I was in a lounge sitting next to a table of doctors who were exchanging ideas for how to increase the number Medicaid patients because they can submit these bills with no questions asked.

I don't recall the percentage profit margin in the pharmaceutical industry, but it's high. Drug companies say it's because of R&D costs. All I know is Americans go to Mexico, or have used Canadian mail order companies because drugs are about one half the cost in these countries. Americans are not subsidizing other Americans--We are picking up the tab for R&D, etc. for the rest of the world.

It goes on and on. These things need to be regulated. When it comes to basic needs like health care, I am against completely free market capitalism.

 

[Kerrie]

I would suggest delving into the increase of obesity, diabetes, asthma, etc. Nonetheless, an important point is the choice of being retired, semi-retired, etc., and IMO that should be by available by age 60.
I don't recall the percentage profit margin in the pharmaceutical industry, but it's high. Drug companies say it's because of R&D costs. All I know is Americans go to Mexico, or have used Canadian mail order companies because drugs are about one half the cost in these countries. Americans are not subsidizing other Americans--We are picking up the tab for R&D, etc. for the rest of the world.

It goes on and on. These things need to be regulated. When it comes to basic needs like health care, I am against completely free market capitalism.

Drug companies are actually not all to blame for high costs, especially when generics are available...a pharmacy that I had recently been purchasing a 30 day supply of generic meds (a very common one too) had charged me $34.99, when I switched the prescription to Costco, it went down to less then $6.00 for the same number of pills and meds. Basically, the retail pharmacies need to take some of the blame.

I also feel that health insurance companies shouldn't just base your premiums on your age either...when you sign up for car insurance, your background is run to see what sort of risk you are. I wouldn't be personally oppossed to having my medical history reviewed if it helped my premiums go down. Preventative checkups would not count against me, but treatments that could have been prevented earlier by me taking better care of myself might count towards a higher premium. I know this sounds harsh, but it is fair for those of us who take care of our health.

 

[loseyourname]

I don't recall the percentage profit margin in the pharmaceutical industry, but it's high. Drug companies say it's because of R&D costs. All I know is Americans go to Mexico, or have used Canadian mail order companies because drugs are about one half the cost in these countries. Americans are not subsidizing other Americans--We are picking up the tab for R&D, etc. for the rest of the world.

It goes on and on. These things need to be regulated. When it comes to basic needs like health care, I am against completely free market capitalism.

I used to date a girl whose father was the CFO of a non-profit kidney research center. He was a pretty big figure in healthcare finance, and according to him, it costs over $300 million to bring a single drug to market in the US, due to the very extensive approval process of the FDA. In short, much of the R&D expenses are because of government regulation, the antithesis of free market capitalism. Of course, companies in other countries can simply sell drugs developed by others in the US, by either skirting or being immune to patent laws, without having to pay any of these costs, allowing them to make plenty of profit while charging a much lower price.

 

[loseyourname]

In reference to retirement, the age for Social Security is 65, isn't it? That is plenty old in my view. Moving it 67 or worse 70, well sure we'd save money, especially in view of the life span of men.

Come on, where is the "compassionate conservatism" (an oxymoron if I ever saw one).

It's pragmatism, neither compassionate nor conservative. I don't know why you think continuuing to allow healthcare costs to spiral out of control is 'compassionate,' anyway. If raising the retirement age can help to alleviate some of these costs, maybe those that are retired won't have such a hard time paying for their meds and can live out their golden years in comfort. Compassion may not be my aim, but is that not compassionate nonetheless?

 

[Manchot]

It goes on and on. These things need to be regulated. When it comes to basic needs like health care, I am against completely free market capitalism.

What's ironic about the prescription drug market is that it isn't a free market. Mass importation of drugs is prohibited by law, essentially acting as an infinite tariff. At the same time, doctors have a tendency to prescribe medications that the pharmaceutical industry advertises, i.e., new drugs protected by monopoly-inducing patents. Yet, the same people who are against any socialization of medicine at all are, for the most part, against the legalization of drug importation. They say that it's about "safety," but the reality is that it's about keeping their lobbies happy.

 

[SOS2008]

What's ironic about the prescription drug market is that it isn't a free market. Mass importation of drugs is prohibited by law, essentially acting as an infinite tariff. At the same time, doctors have a tendency to prescribe medications that the pharmaceutical industry advertises, i.e., new drugs protected by monopoly-inducing patents. Yet, the same people who are against any socialization of medicine at all are, for the most part, against the legalization of drug importation. They say that it's about "safety," but the reality is that it's about keeping their lobbies happy.

Ah, now were getting somewhere--good points Manchot.

 

[TheStatutoryApe]

What's ironic about the prescription drug market is that it isn't a free market. Mass importation of drugs is prohibited by law, essentially acting as an infinite tariff. At the same time, doctors have a tendency to prescribe medications that the pharmaceutical industry advertises, i.e., new drugs protected by monopoly-inducing patents. Yet, the same people who are against any socialization of medicine at all are, for the most part, against the legalization of drug importation. They say that it's about "safety," but the reality is that it's about keeping their lobbies happy.

It is about safety, or at least it's supposed to be. The FDA from what I have read has just gotten way too stodgy and most likely are guilty of playing to the lobbies but that doesn't detract from the fact the the laws are supposed to be about safety and that it's an important issue. Let's definitely overhaul the system, but I don't think it should be abolished.

 

[loseyourname]

What's ironic about the prescription drug market is that it isn't a free market. Mass importation of drugs is prohibited by law, essentially acting as an infinite tariff. At the same time, doctors have a tendency to prescribe medications that the pharmaceutical industry advertises, i.e., new drugs protected by monopoly-inducing patents. Yet, the same people who are against any socialization of medicine at all are, for the most part, against the legalization of drug importation. They say that it's about "safety," but the reality is that it's about keeping their lobbies happy.

You can't just have all generics and imports, though. If that was the case, who would develop new drugs? The fact that people don't want to admit is that the companies developing new drugs are taking all the risk. Three failed drugs will lose your company nearly a billion dollars. On the other hand, if you just copy drugs that have already been developed by others and have already been through the approval process, you incur no risk whatsoever. If we simply flooded the market with imports, domestic companies would go out of business. Then what? It would be left to the foreign companies to develop new drugs. Now they'll have to go through the FDA approval process, spending boatloads of money to bring drugs to market, and losing boatloads for every drug that doesn't work. That means their prices go up, to about what prices for domestic brand-name drugs are now. Well, what do we do then? We can't just continue running in circles and avoiding the real problem. The issue with safety isn't just bad drugs coming across the borders. We all know the stuff coming from Canada is just as good as the stuff we have here; in most cases, it's an exact copy. The real safety issue is that opening ourselves to imports may compromise our long-term ability to innovate.

Don't get me wrong. I'm not claiming that we have a perfect system running here. There is plenty we can change, but if we you really want to drive down drug costs, and do so without ruining the companies that develop new drugs for us, there are two viable options: 1) Use taxpayer money to subsidize R&D expenses for companies with a track record of bringing successful drugs to market. 2) Loosen up the FDA approval process somewhat.

There are obvious problems with both possible solutions. Option 1 doesn't mean we're paying any less, it just means that someone else is helping us pay. Option 2 may very well lead to more bad drugs making their way to the market and more class-action lawsuits against pharmaceutical companies, driving up their legal expenses, a cost which will of course be passed to the consumer.

There is a third option, of course. We simply acknowledge that drugs are expensive. Years of hard work on the part of hundreds of researchers and clinicians, not to mention the very lives of test-subjects (at one stage that all drugs must go through, they can only be tested on terminal patients), go into the creation of a single drug. Many of these drugs that millions of man-hours and billions of dollars go into developing never make any profit or even any revenue, as they are never approved. If those who make the drugs have to incur costs such as these, then those who buy from them will need to realize that they must shoulder some of that cost, one way or another. If you can't pay, fine, allow a person the option of using a drug that has not been through the approval process. Let the family waive their right to sue for wrongful death and use the patient as a test subject in clinical trials normally performed on apes or terminal humans. You have to give up one or the other - your right to be angry should a drug fail or your desire to buy them cheap. You can't have both.

 

[Manchot]

You can't just have all generics and imports, though. If that was the case, who would develop new drugs? The fact that people don't want to admit is that the companies developing new drugs are taking all the risk. Three failed drugs will lose your company nearly a billion dollars. On the other hand, if you just copy drugs that have already been developed by others and have already been through the approval process, you incur no risk whatsoever.

Though your concerns are valid, the evidence indicates that research spending would not decrease as a result of allowing imports. First of all, the pharmaceutical industry has the highest returns on revenue when compared with any other industry. They average 14%, while the average Fortune 500 company averages 5%. They are not in danger of becoming unprofitable anytime soon. Secondly, the drug companies spend almost three times the money they spend on research on marketing. The average software company spends twice the amount on R & D compared with the average drug company. They also don't risk that much when making new drugs. As it turns out, almost 80% of new drugs are just slightly altered versions of already existing ones. Finally, the American public already subsidizes drug development. The private sector finances 52%, the federal government finances 38%, and the rest is financed by miscellaneous groups.

 

[loseyourname]

Though your concerns are valid, the evidence indicates that research spending would not decrease as a result of allowing imports. First of all, the pharmaceutical industry has the highest returns on revenue when compared with any other industry. They average 14%, while the average Fortune 500 company averages 5%. They are not in danger of becoming unprofitable anytime soon.

The thing is, they don't have to become unprofitable to be abandoned by shrewd businessmen. They simply have to become less profitable than the companies that only produce generics and spend nothing on R&D.

Secondly, the drug companies spend almost three times the money they spend on research on marketing.

Where did you get that number? I'd really like to take a closer look at that, but I think it might be misleading because of the way that many companies spend their research dollars. The money they spend is far more than just what they spend on their R&D divisions. They also spend a lot of money to fund the research conducted by hospitals, non-profit research institutes, and university programs. Heck, Johnson and Johnson alone funds almost all of the Rutgers School of Pharmacy, even built all of the buildings, and funds a great deal of many hospitals in central NJ as well. It's also possible that you're only considering the money that goes into actual R&D and not the money that goes into the many stages of clinical testing for FDA approval after the drug has already been developed. That's where the big expenses are - in approval, not development.

Finally, the American public already subsidizes drug development. The private sector finances 52%, the federal government finances 38%, and the rest is financed by miscellaneous groups.

Again, though, who finances the clinical trials? Part of the reason so many doctors push brand-name drugs on their patients is that the drug companies are the ones funding the hospital. Not entirely, obviously, especially in the case of public hospitals, but they are the major source of private investment in healthcare.

 

[Manchot]

Just FYI, some of my statistics came from http://www.karlloren.com/Diabetes/p17.htm, a copy of a New England Journal of Medicine article on this issue.

The thing is, they don't have to become unprofitable to be abandoned by shrewd businessmen. They simply have to become less profitable than the companies that only produce generics and spend nothing on R&D.

The generic market is much less profitable than the new drug market. The generic market is almost perfectly competitive: there's not much money to be made there, and lulls in demand can force companies out of business. On the other hand, if you develop a new, innovative drug, then you can have a temporary monopoly.

Where did you get that number? I'd really like to take a closer look at that, but I think it might be misleading because of the way that many companies spend their research dollars.

According to Frontline, clinical trials make up 75% of development costs, so one would assume that that is counted as part of R & D costs. Unfortunately, there's no possible way to get an exact breakdown, because the drug companies have a disincentive to publish that information.

I'm not suggesting that price controls be implemented. I'm not even suggesting that patents be removed, only that they be enforced correctly. As it stands, the industry is always trying to weasel its way around patent law. For example, when one drug's patent is about to expire, they'll often package it together with another one, and get the combo patented. Then, unsuprisingly, they take the original off the market and rebrand it. Also, the USPTO needs to be far less lenient when it comes to the "me-too" drugs. (This doesn't just apply to the drug market: the patent office is far too lax in general, mostly because they've been overwhelmed in recent years by software patents. For example a few years ago, Smuckers received a patent for a crustless PB & J sandwich, and a few weeks ago, Amazon.com received a patent for being able to remember purchasers' histories.) Also, I think that if our tax dollars are going to subsidize these companies, then at the very least, importation needs to be allowed.

 

[The Smoking Man]

Question: Who here believes that any drug company is in financial trouble or 'would be' if this monopoly was crushed?

Basically, what is happening is that the large corporate drug companies are hitting you with 'bafflegab' via government contributions.

These are the people who have successfully lobbied to have herbs removed from health food shops and then powdered the same herbs to sell you over the counter in capsule form.

 

[alexandra]

If those who make the drugs have to incur costs such as these, then those who buy from them will need to realize that they must shoulder some of that cost, one way or another. If you can't pay, fine, allow a person the option of using a drug that has not been through the approval process. Let the family waive their right to sue for wrongful death and use the patient as a test subject in clinical trials normally performed on apes or terminal humans. You have to give up one or the other - your right to be angry should a drug fail or your desire to buy them cheap. You can't have both.

Phew, loseyourname - this is plain speaking indeed. Totally naked ruthless capitalism, huh? I was especially struck by the phrase "...use the patient as a test subject in clinical trials normally preformed on apes...' I do not (and would never) agree with such ruthlessness - but bravo for putting the case so very plainly.

 

[SOS2008]

Question: Who here believes that any drug company is in financial trouble or 'would be' if this monopoly was crushed?

Basically, what is happening is that the large corporate drug companies are hitting you with 'bafflegab' via government contributions.

Not to mention the immense amount of money they spend on advertisement. Why do they need to advertise? Prescribing medication is a doctor's role.

Aside from that, most of the R&D goes to produce drugs that are highly marketable, such as Viagra, and not trying to find cures for horrible diseases. All of this was brought up during the 2004 election, but was lost in the gay marriage-type of noise.

 

[loseyourname]

Just FYI, some of my statistics came from http://www.karlloren.com/Diabetes/p17.htm, a copy of a New England Journal of Medicine article on this issue.

Thanks. I'll take a look at that and try my best to figure out what the breakdown is and where they're getting the numbers from.

Something that I noticed that I think is worth mentioning right off the bat is the comment the author makes about the riskiness of being in the pharmaceutical industry. The very large companies themselves don't risk much collectively, since they have such a huge number of products on the market and in development all the time. As such, these companies make a safe investment for shareholders and the CEO is probably fairly secure. The careers of lower-level executives, the R&D division chairs and such, is not nearly as secure, however. If one man oversees two or three failed projects consecutively, even though the company overall might be doing quite well, his department just lost hundreds of millions (perhaps even billions) of dollars and is going to be cut. Many doctors also stake their reputation on one or two drugs that they develop, and if these fail, their careers can be ruined. Even if the industry is doing quite well, it isn't all hunky dory for everyone.

Note: While all of the above is probably pretty obvious and mostly not relevant, I just wanted to ensure that nobody gets the idea that there is any such thing as a sure bet in business, even in industries as wildly profitable as pharmaceuticals. The researchers themselves are quite well paid and secure, but the men who attempt to get fabulously rich in the higher positions quite often do fail. I get the impression that discussions of business tend to focus on nameless, faceless corporations and forget that these are populated by individuals.

The generic market is much less profitable than the new drug market. The generic market is almost perfectly competitive: there's not much money to be made there, and lulls in demand can force companies out of business. On the other hand, if you develop a new, innovative drug, then you can have a temporary monopoly.

That's the thing, though. If you take away the monopolies by allowing imports that circumvent the patents, there is no more incentive to innovate. No matter how high their profits may be right now, the patents (along with doctor recommendations) are the sole source of those profits. Take those away and you take away the profitability.

Don't get me wrong here. I'm not making a direct comment on whether or not we should allow any importation. To be honest, I'm not that knowledgeable about foreign pharmaceutical companies and what kinds of laws and approval processes they go through. I'm just trying to say that the current embargo on imports isn't just about maintaining profits for powerful lobbyists. There are two other issues that are very important: 1) Maintaining the patent monopolies that make innovation worthwhile in the first place. If the imports are being manufactured by the same company or manufactured after the patent has run out for the domestic drug, go ahead and allow it. 2) If we allowed US citizens to buy drugs that were not FDA-approved, why have an FDA approval process for drugs in the first place? Of course, people do have this option already with herbal medicines, which are not regulated. I'm sure many work quite well, but naturally there are many that make sham claims and intentionally rip off desperate people.

According to Frontline, clinical trials make up 75% of development costs, so one would assume that that is counted as part of R & D costs. Unfortunately, there's no possible way to get an exact breakdown, because the drug companies have a disincentive to publish that information.

Well, I could ask my old contact (who is semi-retired on permanent disability and has no incentive to lie), but I haven't talked to him in years.

Edit: By the way, I felt I should add that even though I may know people involved in the industry, obviously they can't actually reveal trade secrets or financial records to me. Just in case anybody is getting the mistaken impression that I'm somehow in the know - I'm not.

I'm not suggesting that price controls be implemented. I'm not even suggesting that patents be removed, only that they be enforced correctly.

I can't disagree with you there. I only present the case for the pharmaceutical industry because it seems like everyone else around here is so hellbent on presenting the case against it. The forum requires balance. You've been very fair in your assessment, though. I'm quite impressed. You rarely see fairness in a political discussion.

As it stands, the industry is always trying to weasel its way around patent law. For example, when one drug's patent is about to expire, they'll often package it together with another one, and get the combo patented. Then, unsuprisingly, they take the original off the market and rebrand it. Also, the USPTO needs to be far less lenient when it comes to the "me-too" drugs. (This doesn't just apply to the drug market: the patent office is far too lax in general, mostly because they've been overwhelmed in recent years by software patents. For example a few years ago, Smuckers received a patent for a crustless PB & J sandwich, and a few weeks ago, Amazon.com received a patent for being able to remember purchasers' histories.)

Yes, every industry has its loopholes that it exploits. These financial officers really do earn their salaries. The man I was talking about earlier as my contact actually created a new tax loophole by directly petitioning the IRS (successfully) on behalf of a deaf client to deduct the cost of his pet. As Oscar Schindler's father told him, there are three things every man needs: a good doctor, a good priest, and a good accountant.

Also, I think that if our tax dollars are going to subsidize these companies, then at the very least, importation needs to be allowed.

I may yet come to agree with you, but as of now, the statement "importation needs to be allowed" is vacuous without qualification. It all depends on what exactly is being imported and what rules this importation follows. Has there been any specific legislation proposed to break the import embargo that I could analyze that has a more detailed plan?

 

[loseyourname]

Phew, loseyourname - this is plain speaking indeed. Totally naked ruthless capitalism, huh? I was especially struck by the phrase "...use the patient as a test subject in clinical trials normally preformed on apes...' I do not (and would never) agree with such ruthlessness - but bravo for putting the case so very plainly.

So what would you do if you had a terrible disease that could not be cured by any drugs you could currently obtain? Personally, I would love to have the option of taking experimental drugs at no cost.

Remember, every drug is first tested on animals and then tested on terminal patients. I don't see what is so ruthless about taking a drug in this early developmental stage without having to pay the extraordinary cost of drugs that have already been approved. What I see as ruthless is not giving this option and watching people suffer and die with no hope of cure.

 

[loseyourname]

Not to mention the immense amount of money they spend on advertisement. Why do they need to advertise? Prescribing medication is a doctor's role.

I never understood that either. I can see why they would advertise for things like fertility drugs, impotency drugs, and even new allergy medications. If people don't know these exist, they might never visit the doctor in the first place. What I don't get is all the ads for disease treatments, like the fuss over valtrex a few years back. Like you, I ask: Shouldn't these people's doctors be telling them about this?

 

[Kerrie]

I never understood that either. I can see why they would advertise for things like fertility drugs, impotency drugs, and even new allergy medications. If people don't know these exist, they might never visit the doctor in the first place. What I don't get is all the ads for disease treatments, like the fuss over valtrex a few years back. Like you, I ask: Shouldn't these people's doctors be telling them about this?

I have noticed this too, alongside with a lot more advertisements for private health insurance...I don't seem to remember so much of it 10 years ago.

 

[The Smoking Man]

So what would you do if you had a terrible disease that could not be cured by any drugs you could currently obtain? Personally, I would love to have the option of taking experimental drugs at no cost.

Remember, every drug is first tested on animals and then tested on terminal patients. I don't see what is so ruthless about taking a drug in this early developmental stage without having to pay the extraordinary cost of drugs that have already been approved. What I see as ruthless is not giving this option and watching people suffer and die with no hope of cure.

Unless you get another thalidamide.

The disadvantage of an unapproved drug is that this can always happen.

Heck ... Tholidamide was even APPROVED but with lesser rigid standards.

 

[loseyourname]

Unless you get another thalidamide.

The disadvantage of an unapproved drug is that this can always happen.

Heck ... Tholidamide was even APPROVED but with lesser rigid standards.

That's exactly why you wouldn't have to pay anything. The point I'm making is that you either pay and know that your drug is approved and (probably) safe, or you can take a risk on an experimental drug and not pay. I'd rather have that option than only having the option to take approved drugs that I can't afford and insurance doesn't cover. An experimental drug is better than no drug.

 

[devil-fire]

I also feel that health insurance companies shouldn't just base your premiums on your age either...when you sign up for car insurance, your background is run to see what sort of risk you are. I wouldn't be personally oppossed to having my medical history reviewed if it helped my premiums go down. Preventative checkups would not count against me, but treatments that could have been prevented earlier by me taking better care of myself might count towards a higher premium. I know this sounds harsh, but it is fair for those of us who take care of our health.

this sounds good if your thinking in the lines of "peole who don't smoke, eat well, and exersize regularly should get discounts compared to people who do the opposite" but you have to include cases where people have a vary unhealthy and potentialy long future ahead of them and not having to do with how well they take care of themselves. kids who have degenerative diseases would have vary high insurence rates if subject to backround checks

 

[alexandra]

So what would you do if you had a terrible disease that could not be cured by any drugs you could currently obtain? Personally, I would love to have the option of taking experimental drugs at no cost.

Remember, every drug is first tested on animals and then tested on terminal patients. I don't see what is so ruthless about taking a drug in this early developmental stage without having to pay the extraordinary cost of drugs that have already been approved. What I see as ruthless is not giving this option and watching people suffer and die with no hope of cure.

My solution, that essential medication be subsidised by our taxes, is currently in place in Australia under the Pharmaceutical Benefits Scheme. After all, that is the ‘contract’ citizens have with their governments: citizens pay taxes so that a central regulator – their elected ‘representatives’ in government, who are responsible to them (the voters) - can spend the money on essential services like education and health. When did we lose sight of this contract, everyone? Why do those who argue against this think the government should NOT use tax-payer’s money for the purposes taxes are supposedly collected in the first place? If all essential services are to be privatised, why should we pay taxes at all? I really don’t understand the reasoning behind such arguments.

In any case, getting back to the Pharmaceutical Benefits Scheme. This scheme, that many low-income Australians rely on, is threatened by the Australia-USA Free Trade Agreement, which came into effect on 1 January 2005:

Australia’s 55 year old Pharmaceutical Benefits Scheme is world renowned for subsidising around 600 drugs for Australian consumers.

Under the scheme, low drug prices are negotiated by the combination of stringent cost-benefit (or ‘pharmacoeconomic’) analyses and the market power of a centralised buying system (see Harvey 2001; Wright 2003). The Australian system works. Drug prices in the United States are around 160 per cent higher than in Australia; drugs in Canada and Sweden cost about 50 per cent more (Productivity Commission 2001).

However, the success of the PBS does not please everyone, particularly the American pharmaceutical companies. The Pharmaceutical Research and Manufacturers of America (PhRMA) makes no secret of its dislike of Australia’s scheme, which it argues erodes intellectual property, devalues innovation, and discourages investments in new medical discoveries (PhRMA 2003). But PhRMA’s claims are not easily supported. For example, the Australian Productivity Commission (2001) has found that, comparatively, the largest price differences in Australia applied to new drugs offering few benefits over existing ones (so-called ‘me-too’ drugs). This means that genuinely innovative pharmaceuticals are priced like they are in other countries—and hardly pose a disincentive. When it comes to investment, the Department of Industry, Tourism & Resources (2004) administers a Pharmaceutical Industry Investment Program (PIIP) that rewards pharmaceutical manufacturers for undertaking research and development in Australia.

Even so, PhRMA often vigorously opposes government policies they think hurt the balance sheets of their members. In the current fiscal year July 2003–June 2004, PhRMA will apparently spend more than US $150 million to influence government—a 23 percent increase over the previous year (see Table 1).

Given this political activity, it isn’t surprising to discover that, in January 2003, PhRMA lobbied US trade negotiators to seek an Australian government commitment to ‘refrain from trade distorting, abusive, or discriminatory price controls’ which would include PBS pharmacoeconomic analysis, reference pricing, and restricted listings. Nor is it surprising that President Bush, who benefited to the tune of $14 million from the US pharmaceutical industry during his 2000 campaign, singled out changes to the PBS that would help US companies when he visited Australia last October (Colebatch 2003).

Reference: http://www.econ.usyd.edu.au/drawingboard/digest/0403/harvey.html

 

[Kerrie]

this sounds good if your thinking in the lines of "peole who don't smoke, eat well, and exersize regularly should get discounts compared to people who do the opposite" but you have to include cases where people have a vary unhealthy and potentialy long future ahead of them and not having to do with how well they take care of themselves. kids who have degenerative diseases would have vary high insurence rates if subject to backround checks

this is a very good point, thank you for bringing it to light. with auto insurance you get the best rate when your behavior isn't risky, so if you aren't risky when it comes to your health-such as smoking and eating right, etc-you would benefit from a discount in your premiums.

 

[SOS2008]

I have noticed this too, alongside with a lot more advertisements for private health insurance...I don't seem to remember so much of it 10 years ago.

And now of course there are advertisements about all the R&D they do and the cost, etc., in other words, political lobbying advertisement. Personally I feel advertisement is only applicable to over-the-counter medications, but not anything that is prescribed. They are trying to get the public to place pressure on doctors in favor of their drug, but it is at the patient's expense of course because the cost for advertising will be passed along to the public.

this is a very good point, thank you for bringing it to light. with auto insurance you get the best rate when your behavior isn't risky, so if you aren't risky when it comes to your health-such as smoking and eating right, etc-you would benefit from a discount in your premiums.

Things like smoking is taken into consideration for insurance, certainly life insurance. Even risky behavior such as skydiving. It presents a slippery slope when it comes to where to draw the line. Currently there is discrimination against issues people don't control, such as age, preexisting conditions (e.g., asthma, cancer), etc.

 

[loseyourname]

Currently there is discrimination against issues people don't control, such as age, preexisting conditions (e.g., asthma, cancer), etc.

All insurance works that way. You pay more if you're more likely to be making a lot of claims. You pay more for car insurance if you're male, if you're a teenager, if you live in Los Angeles, if you drive a sports car, regardless of your driving record and accident history. You pay more for fire insurance if you live in Malibu. You pay more for flood insurance if you live in Florida. Eddy Curry of the Chicago Bulls isn't getting any big contract offers as he expected, because the league won't insure the contract due to a heart condition he has. Same thing with health insurance - you pay more if you're more likely to be unhealthy.

Even the good driver discounts don't necessarily benefit only those who are diligent and drive safely. If someone else hits you and you are not found to be at fault, your premiums still go up.

 

[The Smoking Man]

All insurance works that way. You pay more if you're more likely to be making a lot of claims. You pay more for car insurance if you're male, if you're a teenager, if you live in Los Angeles, if you drive a sports car, regardless of your driving record and accident history. You pay more for fire insurance if you live in Malibu. You pay more for flood insurance if you live in Florida. Eddy Curry of the Chicago Bulls isn't getting any big contract offers as he expected, because the league won't insure the contract due to a heart condition he has. Same thing with health insurance - you pay more if you're more likely to be unhealthy.

Even the good driver discounts don't necessarily benefit only those who are diligent and drive safely. If someone else hits you and you are not found to be at fault, your premiums still go up.

So, I smoke and my colesterol is sky high ... do you think I get a break on my retirement contributions!?

 

[Kerrie]

All insurance works that way. You pay more if you're more likely to be making a lot of claims.

Premiums specifically don't work that way for health insurance. They stay fixed within age categories, but on the backend you will pay more for your health issues because you see a doctor more. My objection with this is, if someone who smokes is ill a lot more and needs more medical care, why do I have to pay $200 a month for my premium? My car insurance premium is based soley on my driving habits, thus another incentive to simply drive carefully.

 

[SOS2008]

I don't feel health benefits and auto insurance are good comparisons. I don't feel health care should become more expensive because of things a person can't help, like getting old. With the cost of health care so high that an unfortunate ailment can cause a family financial ruin (this is one reason for the increase in bankruptcies) we need to find a way to provide this most basic need to Americans in a more affordable way.

...If someone else hits you and you are not found to be at fault, your premiums still go up.

I agree this is wrong, especially since it is illegal to be without auto insurance (unlike health insurance). But this is another topic...

 

[loseyourname]

Premiums specifically don't work that way for health insurance. They stay fixed within age categories, but on the backend you will pay more for your health issues because you see a doctor more. My objection with this is, if someone who smokes is ill a lot more and needs more medical care, why do I have to pay $200 a month for my premium?

Well, I actually didn't know that. I've never paid for a health insurance premium and I just assumed it worked like other kinds of insurance. Do they just refuse to insure you then if you have a really bad condition beforehand?

My car insurance premium is based soley on my driving habits, thus another incentive to simply drive carefully.

It isn't, though. It varies according to age, gender, location, and the make of your car. Driving history alone doesn't determine the premium. If you were a 21 year-old male driving a Ferrari, you'd pay more than you're paying now, even if you had a perfect driving record. My cousin pays more for insurance each month than he does for his car payment, on a small pickup truck. The reason? He's a teenage male driving in Los Angeles that has had a car totaled before? Even though somebody else hit him, he still pays.