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Re: CHEAPER DRUGS?

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It is certainly true that a big chunk of the R&D money goes on drugs that
never make it to market, but it is still within the 15% of total revenue.
It is also true that they spend way more on pretty girls in short skirts
hawking samples to doctors than they spend on clever people in lab coats
developing the next big breakthrough drug.

Michael


                                                                           
             Charley Hamilton                                              
             <chamilto(--nospam--at)uci.edu                                             
             >                                                          To 
                                       seaint(--nospam--at)seaint.org                   
             11/15/2004 06:09                                           cc 
             PM                                                            
                                                                   Subject 
                                       Re: CHEAPER DRUGS?                  
             Please respond to                                             
             <seaint(--nospam--at)seaint.or                                             
                    g>                                                     
                                                                           
                                                                           
                                                                           




> 2) Drug companies tried to defend higher prices in Australia on the basis
> that R&D costs should be distributed equally amongst all consumers. This
> ignores the fact that only 15% of the cost of a drug is R&D, whilst 40%
is
> marketing (ref: the Economist a few months ago). Australians would be
happy
> to share the R&D costs equally if they didn't have to pay for all those
> dumb Purple Pill ads on American TV that don't get aired in Australia.

I would add to the Economist's analysis the following data
point:

The majority of the retail price of a drug is cost recovery from
prior investments in drugs that *didn't* make it to the
counter (either over or behind).  I'll dig up the reference, but
it came to me via my wife, who is a pharaceutical chemist, from
her Medicinal Chemistry class.  I'm sure she still has the
original reference.

So when one buys purple pills, one is paying for prior pills
that turned out to be *really* expensive rat poison.  ;-)

Charley

--
Charles Hamilton, PhD EIT               Faculty Fellow
Department of Civil and                 Phone: 949.824.3752
     Environmental Engineering           FAX:   949.824.2117
University of California, Irvine        Email: chamilto(--nospam--at)uci.edu




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