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Pharmaceutical companies
Zainy (IP Logged)
05 April, 2012 16:52
Just heard a disturbing story from a friend in South Africa. He received a phonecall from a doctor who had a patient who she had diagnosed with essentially a heart attack. Now pre hospital care in the first world should include nowadays a drug called tenecteplase (trade name Metalyse) which has shown to reduce mortality in acute coronary events. The science behind this is pretty incontrovertible - the drug works. very well.
However this patient did not receive the drug pre hospital - he couldnt afford it. In the US, a single dose costs over $1500, in the UK 550 Pounds. In SA over R10000. So very few people can actually afford the medication in SA.
Two things struck me. Surely the doctor should have given the drug anyway? But how many times could that doctor swallow that cost when a single dose is probably a third or quarter of her MONTHLY take home salary.
Secondly, how do pharmaceutical companies justify the costs? The research costs story doesnt hold much water in my books especially with the profits announced by big pharma companies every year.
The problem isnt that pharmaceutical companies dont produce excellent and effective drugs, because they do, quite a lot, but rather the pricing. Once they hit on something that works really really well, the price is exorbitant.
This is another reason why I also dont buy the conspiracy theory that pharma companies are witholding cures for various pathologies like cancer. If someone comes up with a treatment to cure even one type of major cancer it would be its own minting machine.
This is the problem when health care becomes a business.
But what is the solution?

Re: Pharmaceutical companies
05 April, 2012 23:46
Random thoughts Zainy cos im half p#ssed.

Conspiracy theory: why come up with a complete cure if you can provide a medicine that will improve quality of life and prolong it for a reasonable period.

Involvement of insurance companies and national health services keep the price of medication artificially high as they just pass the cost on through taxes and premiums. Im not particularly poor but if I had to directly pay say £500 p.w. for a drug to keep me well I would run out of cash pretty soon. Thats not good business for the Pharmas.

Re: Pharmaceutical companies
Zainy (IP Logged)
06 April, 2012 11:17
You are right with private health care (insurance companies) driving the cost of health up.
However, the government negotiates tenders with pharma companies and medical device companies independently and in some cases (NHS) the cost is reduced but in others (HSE - Ireland) the price is increased.

As for the conspiracy theory, there are many diseases with we simply cannot erradicate. Even if we cured everyone in the world of cancer today, tomorrow people will still be born with cancer and adults will acquire cancer from their environment. The same with diabetes, people are born with a genetic predisposition or they acquire it through sedentary lifestyle and poor diet. So a cure is certainly cost effective because they could charge what they want (as they already do with drugs that save lives) because there will be new customers each and every day.

Communicable diseases like HIV could potentially be erradicated and a conspiracy could be crammed to fit in scenarios similar to that. The issue with that is that countries like South Africa have a lot of research in that area and the epidemic is crippling on the economy so their is a lot of incentive to actually cure the disease.

Its all quite sad really, but how can things change?

Re: Pharmaceutical companies
Billythekid (IP Logged)
06 April, 2012 14:12
The truth

Prescription drugs kill some 200,000 Americans every year. Will that number go up, now that most clinical trials are conducted overseas—on sick Russians, homeless Poles, and slum-dwelling Chinese—in places where regulation is virtually nonexistent, the F.D.A. doesn’t reach, and “mistakes” can end up in pauper’s graves? The authors investigate the globalization of the pharmaceutical industry, and the U.S. Government’s failure to rein in a lethal profit machine.....

Right here

Prescription drugs are now killing far more people than illegal drugs, and while most major causes of preventable deaths are declining, those from prescription drug use are increasing, an analysis of recently released data from the U.S. Centers for Disease Control and Prevention (CDC) by the Los Angeles Times revealed.

Pharmaceutical drugs kill 3 times more people than all illegal drugs combined !!

Re: Pharmaceutical companies
Zainy (IP Logged)
06 April, 2012 14:36
That unfortunately has less to do with the pharmaceutical companies than the distribution and how people are gaining unauthorised access to these medications. Prescription meds again unfortunately are easier to acquire even illegally or through loopholes.
Prescription meds need to be respected.

As long as the end goal is money for big pharma companies I wouldn't be surprised if ethical issues re being circumvented in the chase for the dollar.

Re: Pharmaceutical companies
Ares (IP Logged)
06 April, 2012 21:18
its simple really.

Five or so big countries have to get together, strip all tax shelters for drug companies and raise the tax rate on the drug companies right up to 50 to 60%

At the same time selectively raising taxes on legal drug imports.

Customs and Excise can be instructed to ignore tax proccessing for products from selective companies and to not hold back on companies that play hard-ball.. which they do anyway, but not as much as Inland Revenue.

This kind of set up will not put the pharmaceuticals out of business and it won't cost taxpayers a thing.

Governments worldwide do this with the Oil / Fuel industry and individual Oil/Fuel Companies without putting companies out of business.

Re: Pharmaceutical companies
Zainy (IP Logged)
06 April, 2012 21:50
It would take some pretty big cahoonas to do that. Bi companies like that with astronomical profits bring in a lot of tax dollars as it is. Might simply force them out of the country. They aren't limited by geography like oil companies.

Re: Pharmaceutical companies
SuperRob (IP Logged)
07 April, 2012 11:41
I have no idea if this is true or not but wouldn't big companies like that be registered in tax havens anyway. For example Luxembourg, which has more registered compnaies than it does people.

Re: Pharmaceutical companies
Zainy (IP Logged)
07 April, 2012 13:07
You are probably right rob.

Re: Pharmaceutical companies
Ares (IP Logged)
10 April, 2012 04:23
Then its simple

Pass laws to remove those tax shelters.

Re: Pharmaceutical companies
Zainy (IP Logged)
10 April, 2012 10:47
It can be that simple, but you have to understand, govenerments pass those laws precisely to attract big companies into the country. Even though they dont pay as much tax as they would in other countries, they still pay more tax than a great huge chunk of the population combined. They are getting (a lot) of money where they would not of if they didnt have the the tax breaks.
So which government is going to say no to pharmaceutical companies and yes to further austerity? I think think the answer rhymes with Nero.

Re: Pharmaceutical companies
SuperRob (IP Logged)
10 April, 2012 11:15
I was talking to my brother and he said it isn't that simple. Apparently i was wrong and there are laws and stuff that prevent big companies from simply registering in whatever country they like. He works at one of the big four financial firms whose london branch is registered in the uk and pays tax in the UK. So I would assume that the money pharma companies earn in whatever company they have offices in is taxed in that country.

For example I know GSK has offices in london so I guess they pay Uk tax.

The trouble is, that tax positions of these major companies is so complicated that the people at HMCR don't just set a tax rate and that's how much they pay. HMRC have a meeting with the board of big companies and they agree an amount they will pay because to work out, for example, how much 60% of the companies earnings (what type of earnings etc) is just too complicated.

Re: Pharmaceutical companies
Billythekid (IP Logged)
10 April, 2012 11:33
All of that and the fact that their product kills more people than all illegal drugs combined, fact.

Re: Pharmaceutical companies
Zainy (IP Logged)
10 April, 2012 12:58
Billy, the amount of people who use illegal drugs is a is much much smaller than those who use prescription drugs illegally (because that is what the deaths you are referring to are- as a result of addiction and overdose). So that statistic is not as potent as im sure you want it to be.

Re: Pharmaceutical companies
Zainy (IP Logged)
10 April, 2012 13:54
Makes sense rob but at the same time it's an arrangement that is very open to corruption.

Re: Pharmaceutical companies
Ares (IP Logged)
10 April, 2012 14:43
zainy it doesn't matter if companies say bah we're relocating our head office to sierra leone.

They can't take their primary source of revenue with them.

Which means they will have to reach their buyers via border control

In my earlier post I said a tax raising strategy accompanied by a selective/ banded import duty proccessing system will reduce prices.

With drugs valued at over £1000 per pop attracting a 75percent duty processing fee.

drugs valued at £500 or so per pop attracting a 50 to 60 percent duty processing fee

and for companies who get the idea:

which is not very hard to get:

Drugs valued at £100 per pop or less completely ignored for tax processing.

with statutes put in place to grant discretionary powers to tax proccessing departments to make everything nice and legal.

btw the actual research labs don't make money. I.E: labs are purely loss making departments within a company so I don't see why pharmaceuticals would benefit by removing labs in lets say England when they're trying to develop drugs which will meet the approval of the English Medical Council, etc..

as a way to limit outrageous mark ups charged by the big drug companies oftentimes in excess of 10 000% of the cost of production this would work imo, because its tough but it gives a very clear out to drug companies:

lower your prices to something reasonable and you can forget about us charging you a pennny in tax.

Play hardball and we'll tax you to death.

Re: Pharmaceutical companies
Zainy (IP Logged)
10 April, 2012 15:08
The problem I see with that ares is that when tax on meds went up here so did the retail value. The companies simply won't bite the bullet and take a loss. Government increases taxes, they increase their prices. And is the patient who loses out.

Re: Pharmaceutical companies
Ares (IP Logged)
10 April, 2012 17:55
pharmaceuticals cannot exist without paying patients.

I think you're missing the part where I said,

such a scheme should have "A Discretionary Element"

set in statute to allow pharmaceuticals to be dealt with on a case by case basis:

ie So Governments/ Health Ministers can target individual companies and individual drugs where the developers are taking the p.i.s.s.

Exactly in the same way as Inland Revenue have statutes in place which enable them to pursue individuals and individual companies which like to play hide and seek like bloodhounds, while giving special dispensation to companies and individuals who are more compliant aka inland revenue versus arsenal and everton.

versus inland revenue v portsmouth (and rangers)

and of course

Inland Revenue v Redknapp + Milan Mandaric

And Inland Revenues selective approach to individual image rights tax breaks.

where they have powers to override legislation on tax shelters without challenge when they are positive that despite everything adding up and being all nice and legal, an individual is playing the system.

If customs had these powers And the governments of at least 5 out of the top 10 biggest economies in the world (with or without China, Russia or The U.S.'s participation) were united in this it would be the easiest thing in the world to reel in extortionate pricing for drugs.

Edited 1 time(s). Last edit at 10/04/2012 18:41 by Ares.

Re: Pharmaceutical companies
Zainy (IP Logged)
10 April, 2012 18:58
I understand what youre saying but again, if companies are dealt with on an individual basis 2 problems occur:
i) it sets a dangerous precedent for the governent to start interfering with any companies pricing policies - which the public will have none of.
ii) the bigger companies offer bigger bribes to get leniency in their taxing - show me a single country where officials havent taken bribes for less and ill eat my words.

But youre right, somethin has to be done even if it has a high likelihood of failing. Its better than just standing back and saying 'oh well'

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