There is no room in the middle!!! Its sheer stupidity to think that 99% of meds have anything to do with "saving lives". They are a commodity..like faster cars, bigger houses, fancier clothes...they are primarily "feel better sooner" goods. No reason at all, except a socialist philosiphy to think that anyone is entitled to commodities simply because they breathe air. Ah yes..the magic word..ENTITLEMENT !! They live therefore they are entitled!! Do without or beg from your doctor like you beg for everything else in life. We can't expect you to do without you HD TVs, caddies, cell phones, booze, cigarettes etc etc etc. "Personal Responsibility" and "Freedom of Choice"...wooden daggers thru the hearts of the blood sucking vampire liberals!
This is a world economy we live in. Not much is made in just one place any more. Drugs are no exception. Why the big deal here? There are contract manufacturers for most things in this world and drugs are no exception. All the major drug companies have facilities in India and other foriegn countries. As a matter of fact Cipla, Ranbaxy and Dr. Reddy all contract manufacture in FDA approved Facilities in India for th big Pharma companies. The safety is not a issue. You are making it a issue for you have no other argument to use. The drugs are the same as here in the states. Sometimes they look axactly the same. The reason for the similarity in appearance is because the "official" drug is made there.
I want to address one specific statement of yours: "If un-regulated internet sales of prescription drugs is allowed to become a reality, it will be an enormous business,"
There is no way to combat drug sales over the internet. There is no way really to combat any kind of sales over the internet. The transaction is conducted in the ether, often with a seller in another country and a product such as drugs enters the U.S. as one of millions of packages coming in each day.
It is a simple fact that prescription drugs cost about twice as much in the U.S. as they do in Canada and other developed countries. It is an economic fact of life and, increasingly a necessity, that people will spend as little as possible for the same value.
Therefore, people will buy through the internet to achieve a better value. It will also be incumbent on them to determine who they are dealing with and the likely safety and efficacy of the drugs they purchase.
As long as purchases from regulated pharmacies in the developed world (such as Canada) are denied, the opportunity for criminal enterprises will surely thrive.
"Since GSK, Merck, Phizer, J&J etc. signed manufacturing contracts with major India RX/OTC Drug Companies. Does the FDA do on site inspections of manufacturing plants to verify quality control and product purity??"
Yes, it does. Regardless of what country a drug manufacturing plant is located in, if the drug is to be marketed in the USA, it must meet the same standards, keep the same records, and pass the same inspections as those located in the US.
You are correct that the FDA does not regulate vitamins. Vitamins are not drugs and do not come under FDA responsibility. You may recall that there have been numerous cases of dangerous levels of toxic contaminants in some vitamins and herbal remedies. In addition, vitamins and herbal remedies are highly variable in their content and quality of active ingredient.
OTC drugs that were once prescription drugs are subject to the same FDA requirements for quality control in manufacture as when they were prescription drugs. OTCs that were never prescription drugs are certainly subject to some quality control, but probably not as rigorous as the FDA.
The negative noise (an ever-so-slightly biased phrase) you refer to comes from many different concerns. There is no concern about the quality of drugs made outside the US in FDA-inspected plants under contract to pharmas. There is great concern about quality of drugs made in knock-off labs, with no control, for unregulated sale on the internet. There is certainly concern about people by-passing the physician and self-medicating with prescription drugs bought without prescription off the internet.
If un-regulated internet sales of prescription drugs is allowed to become a reality, it will be an enormous business, and I would expect criminal cartels to get into it. If you want your prescriptions filled with the same quality materials as you get buying street-drugs, go ahead. But I think it is not a good idea.
American Companies such as Sams, Costco, Walmart, Kmart, Target etc. are importing OTC products from India RX/OTC Drug Companies. Who inspects these products to varify quality control and product purity? These same companies purchased vitamins made with product imported from virtually every country in the world ... who inspects the vitamin ingredients???
Since GSK, Merck, Phizer, J&J etc. signed manufacturing contracts with major India RX/OTC Drug Companies. Does the FDA do on site inspections of manufacturing plants to verify quality control and product purity??
Anybody know the answer to these questions?
Seems to me tons of unregulated "foreign made" vitamins and OTC products have been on the retail shelf for years?? You, as a consumer, have unknowingly been buying and using these very same "foreign made" products for years. The FDA doesn't inspect these products.
Why all the negative "noise" about Canadian Prescription Companies and India Imports??
The common denominator is dollars. HP spends a higher percentage of its gross margin dollars on R&D than the average of the top ten drug manufacturers.
The point is that lower net profit returns to the drug companies is not going to result in lower investment in R&D.
I don't have to say, again, that there's absolutely no relationship between R & D at a company like HP and a drug company. Drug companies have discovery, development, clinical trials, safety testing, etc, etc, etc.
I don't have a clue why you keep bringing up that comparison. The fact that HP made 3% is is THEIR problem, not GSK's.
The contracts GSK and other American Big Pharma recently signed with India RX manufacturers indicates a few (or many???) drugs will be made by India RX Companies. This would confirm part of Sacblis1 theory and could indicate layoffs at RX manufacturing level should occur next 6 to 12 mos.
Any industry that controls center stage in the political arena isn't managed by the feebleminded. Big Pharma & GSK will micro manage its way out of all difficult situations and maintain profit margins. The RX companies that can't will be bought by GSK, Merck, Pfizer etc.
Good for stockholders ... bad news for Big Pharma employees.
Also, my comment about 15,000 people responding to a Walmart ad for 300 jobs was, as someone indicated, a statement on the real unemployment numbers in America ... much higher then 6.1% ....and growing. The Bush Adminstration policies are a giant smoke screen ment to benefit the 5% of the population that wants the other 95% to work for them ... at minimum wage.
Unfortunately for the drug industry, there is a tremendous amount of "compression" possible without affecting current R&D dollars (as reported on financial statements) much.
The average of the top ten drug manufacturers breaks down this way...sales 100%, COGS 33%, selling, information and administration, 29%, profit before tax 26% and R&D 12.5%.
The R&D dollars could stay static and 4.5 times that amount (SIA & profit) can be whittled down...and that is exactly what happened in the computer industry.
Because of the economic and regulatory climate we are entering, I think you can expect drug profits to drop significantly AND the drug companies will respond by cutting SIA dramatically.
It's just simply the drug industry's turn in the barrel.
Thanks for the interesting post. I am trying to understand your comparison between pharma R&D and computer hardware R&D. In particular, your prediction that "the costs after R&D will be compressed dramatically."
As I am sure you know, in the pharma industry, "R" refers to "Research", the discovery of the novel chemical compound that may ultimately be a drug. "D" refers to "Development", the clinical studies that determine whether the compound is beneficial and safe. For many compounds, the initial "D" studies are only the beginning. After FDA approval, there are often additional years of clinical studies to demonstrate additional uses of the drug, respond to safety concerns, or demonstrate superiority to a competitor. Thus, "D" in pharma, for a given drug, can last from 2-3 to as many as 10-15 years. Nothing in the computer industry can be related to this.
Regarding "after R&D" as I understand the term, the only things to be "compressed" would be things like marketing and advertising, and I guess detailing to MDs - the business side of pharma. To the extent that "compressing" these activities would reduce sales and profits, I would predict that R&D would also have to be reduced in absolute amounts, perhaps not in percentages.
When you talk about R&D, do you mean what it really comprises? Or do you refer only to Research? If the latter, can you explain how Development (clinical trials) costs can be "compressed?" Thanks.