Ferrari Mailing List: Re: Questions about price markups

[ken rentiers (rentiers]

JIm:

As far as medical devices and pharmaceuticals are concerned, the  
actual cost to manufacture is a minor factor.

	1. research and development costs must include all the many failures  
before a success is obtained. Most new drugs come out of America  
these days. In countries where drug prices are held down there is no  
research, example Canada. We underwrite new drug development for much  
of the world, because in America R&D costs can be amortized.
	2. clearing FDA regulations on drugs and devices. These can be many  
hundreds of millions of dollars per drug or device and are a major  
reason why many beneficial drugs with limited application never make  
it out of the lab. It has been written that the FDA has killed far  
more people than it has protected by constructing this arduous  
approval process. Yesterday the Senate passed sweeping increases in  
the FDA's powers.
	3. marketing costs. You have to educate the physician who prescribes  
or uses the product. There is a lot of graft here, we get free ball- 
point pens and sometimes even lunch. Pizzas, sandwiches, all kinds of  
corrupt excess! Because these contacts are now so tightly scrutinized  
the companies have begun educating the end user on TV. That's why you  
see ads for Flomax on ESPN.
	4. legal costs. "Have you ever taken Noassatal? Did your butt fall  
off? Call 1-800-LAWYERS!  Operatprs are standing by" Why there is  
never enough vaccine for certain illnesses.

ken

On May 9, 2007, at 9:24 PM, jim wrote:

> Gang,
>
> I'm working on a project and I need some information on product price
> markups from production to end user. This just has to be 'rough'
> information. More specifically, I'm looking for a couple products  
> in each of
> the following categories:
>
> Medical
> Agricultural
> Military
> Consumer goods
> Education
>
>
> For example, I have a buddy in the manufacturing sector. He says  
> that for
> the construction industry product that his company makes, the end  
> user pays
> typically 300% above the actual cost to manufacture. I'm looking for a
> couple examples within each segment above.
> If anyone has specific examples or knows where I could locate such
> information, I would be deeply indebted!
> I hope this makes sense...
>
> JIM
>
>
>
>
>
> <image001.gif>
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