Ferrari Mailing List: Re: The Price of Pharmaceuticals

[BRIGANDBAR (BRIGANDBAR]

Ken is correct that the actual cost of producing a unit of a medication is  
only a nominal cost of the drug itself for the reasons that he has clearly  
articulated.
 
I would, however, question why the patient in the U.S. is expected to  
subsidize the socialized medical programs of the rest of the first world, as  
well 
as patients in the third world. There is absolutely no reason why the costs  
detailed by Ken should not be fairly distributed amongst all of the end users 
of 
 the world, first and third. And the simple, while I generally eschew 
government  intervention it is justified in this instance because other 
governmental  
entities are intervening to create artificially low prices in their  
nations/markets.

This simple solution would be to place an export duty on all  pharmaceuticals 
exported or produced under license from the United States equal  to 200% of 
the differential between the mean price in the U.S. and the price to  be paid 
by the purchaser nation. Perhaps more simply explained by example, if  Canada 
pays one dollar per dosage unit for a specific pharmaceutical while the  mean 
price in the U.S. is five dollars per dosage unit then the export duty  would 
be eight dollars ($5.00-$1.00=$4.00 x 2 = $8.00). This would result in a  cost 
to Canada of nine dollars per dosage unit. Of course, it might be  preferable 
to price this pharmaceutical uniformly at say three dollars per  dosage unit 
eliminating any export duty yet resulting in a price to the producer  of six 
dollars for two dosage units, precisely what they are receiving under the  
current price model in the example. And, the price would be uniform for both  
Canadians and Americans and each would contribute fairly for the fixed cost of  
the 
pharmaceutical at time of production, including an amortized cost of  
research and development.
 
Of course this is an oversimplification of the economics of medicine and  
pharmacy, but it is only submitted as an example of what could be done using  
similar numbers and pricing structures. The bottom line would be that American  
consumers would not be subsidizing the socialist world in the venue of  health.
 
Dr. Steve  

1964 Rolls  Royce Silver Cloud III    1975 Pontiac GV Conv.
1980 MB  450SL                 1982 RR  Corniche
1988 Rolls Royce Silver  Spur         1994 F-350 Powerstroke  4x4          
1996  Bronco                                  2000 Lincoln Town Car
1995 Ferrari 348  Spyder                 2004 Excursion
+ Audrey's 2x MB's

Dr. Stephen B. Spies, CES,  CFI
Director, Forensic Sciences Laboratory
Explosives Engineering  Technologies

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