Now It's Drug Companies' Turn To Flip Out Over Legal Parallel Imports
from the exposed dept
Imagine you're an entrepreneur who's able to source a locally available product from a foreign country very cheaply -- so cheaply that you can undercut local distributors and sellers of the product. Sounds great, right? You sell the product and make a profit, consumers get a quality good at a lower price -- so everybody wins. However, what you might see as a normal part of business (finding the cheapest sources for your products), some companies want to make illegal. We've seen the British music industry freak out when a vendor imported legitimate CDs from Asia to the UK, exposing the record labels' price discrimination that resulted in inflated prices for CDs there. The BPI (that country's equivalent of the RIAA) argued that the importer was somehow violating their members' copyrights, even though it was importing legally purchased, legitimate discs, and has been awarded 41 million pounds in damages from CD-Wow, the importer. Now, though, it's drug companies that are starting to get worked up (via WSJ Health Blog) about parallel imports, for exactly the same reason: they expose their price discrimination and threaten their margins. Middlemen in the EU take advantage of price differences throughout the continent, buying drugs where they're cheapest, repackaging them, and then selling them in countries where prices are higher (but still undercutting the manufacturer's price). Drug companies, like the music industry, have concocted a flimsy argument against the practice, saying it contributes to counterfeiting and threatens public safety. Of course, they fail to point out how last week, UK regulators found the first case of counterfeit drugs to go through parallel importers -- but the fakes were discovered only because they were pointed out by the importer. The head of a European drug company says his biggest priority is "the integrity and transparency" of the company's drug supply chain -- but apparently that transparency doesn't apply to pricing. Somehow, it's hardly surprising that two industries that lean on the protectionism of intellectual property laws the most are also fighting the hardest for laws to protect their price discrimination.
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Chinese drugs anyone?
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good for you dorpus
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Re: good for you dorpus
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Re: good for you dorpus
Poison in a bottle - greed takes over
China sentences top drug regulator to death, sets up food recall system
While it's not completely on-topic, Dorpus does have a point.
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Globalism in Reverse?
Globalism only works when everything is open to competition not just the few select things that raise corp profits
My ramblings on macro economics
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Re: Globalism in Reverse?
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It's all about the lawsuits
I've worked for a medical diagnostics company and a pharma company and there *ARE* differences between what a product sells for in one country vs. another - part of that is due to the economy in the target country, part of it is due to legal restrictions in other countries (mostly those with socialized medication - the government is only willing to pay $XX.XX per pill/device/etc.) and you have to adjust your prices accordingly.
It's not a case of "stick it to the Americans!" as much as it's a case of "if we don't let France/Canada/etc. have product Y for $X.XX then we simply can't sell our product in that country. Period."
Anyone with a economics background can tell you its better to sell 100,000,000 of an item at $0.01 profit per item than it is to sell 0 of an item with $10.00 profit per item.
Furthermore it's better to sell 100,000,000 of an item at $10.00 profit per than to sell those same 100,000,000 with $0.01 profit per, and to then let the intended recipient resell those items and keep the $9.99 profit per for themselves.
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Sticking it to the individual again.
When individuals buy from overseas it is undermining the economy and putting people at risk to cheap foreign goods.
If only the rules for individuals were as sweet as for corporations. I'd be able to encorporate in a country that didn't charge me income taxes but still work and live where I do. I'd save a pile of money. "But that would ruin the infrastructure by removing needed money for vital services" ... no duh, then why allow corporations to do it?
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Price Discrimination
Now personally, I could care less, but the major longterm effect of reimportation will be very modest declines in drug prices in the U.S. accompanied by very large increases in prices (or complete unavailability) of drugs to the poorest consumers in the world.
It will also mean that pharmas will have to grow a backbone toward the ridiculous formulary prices that socialized medical regimes in other industrialized countries force on them (in a very real way, American consumers are in effect subsidizing the health care systems in UK, Canada and elsewhere).
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Re:Price Discrimination
The broken piece of this equation is not the government pricing guidelines. Its the fact that most big phara spent an equal amount if not more on their Advertising Budget than on new product research and development (I can't cite this fact, but google it and you will find the supporting evidence). Its not, we are subsidizing them, its we are getting screwed. The Pharas were quick to shut down a law that would allow our government to negotiate with them on Medicaid pricing because it would potentially cost them money. So now more of our tax dollars are used to buy drugs for the people that need them but at inflated or at the very least not the best pricing.
The ones who need backbone here are our elected officials who need to remember who they work for (supposed to be working for anyway).
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Re: Re:Price Discrimination
I've long advocated reimportation of drugs on a free market basis.
Consider: Atlanta Drug Co. develops a cure for AIDS, but it cost them a HUNDRED MILLION DOLLARS to develop. The pill, OTOH, only cost a few cents to make. So they sell them for a thousand dollars a pop in the US to recoup their cost.
Another counrty (let's call it "Canada") decides that they will only purchase the drug if it costs five cents. OK, ADC is making their nut here, why not get few extra cents out of "Canada"?
But, with drug reimportation they don't get to squeeze that balloon. ADC will consider them part of the same market (hey, that's what we're all about, right?) and price accordingly. If that puts "Canada" out of what they're willing to pay, tough.
(And yeah, there's a lot of blowback that follows. "Canada" makes the drug themselves, we import their version, etc. But if you live by Free Trade, you can die by it as well.)
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money,money,money..........MONEY!!!!!!!!!!
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