(no subject)

[wildflowersoul]

So this is something I don't quite get. Big pharma companies are taking a lot of hits when their drugs lose exclusivity and generics for their drugs go on the market. Because generics are cheaper, and most insurance companies will only pay for the cheapest option, and most people only want to pay for the cheapest option. So why aren't big pharmas lowering the price for their brand-name drugs when generics become available? Or why aren't they making a second version of the drug themselves, calling it generic, and slapping a lower price tag on it? They could make up for the lower price with the greater quantity sold. *shrug*

Comments

[bushidokelt.livejournal.com]

they have to pay for their marketing somehow.

In truth, most pharma insists that the high costs are associated with R&D which is ridiculous, since most of th new developments are done, in part at universities and small private biotech firms. Big pharma then gobbles up these firms with their warchests...or atleast what is leftover from their advertisements and dividends..

I think it would be interesting to see just how much, i.e. percentage of Pill is retained earnings attributable to new product R&D

[wildflowersoul.livejournal.com]

I totally hear ya.

And marketing meds... grrr.

[watchamacallit.livejournal.com]

they do indeed make a new version but they then market it as an improved or totally different drug so that they can keep their hold on a patent and prevent someone else from making a generic version.

read this. it's really quite disturbing and makes me think twice about joining 'the industry.'

[futurenurselady.livejournal.com]

Some insurance companies do pay for brand name drugs if the doctor prescribes them. This is part of the reason for the Medicare Prescription Coverage Reform. The Drug Companies lobbied very heavily for it.

The difficulty they are having is in getting the doctors to write "brand name only" on the prescription slip. Some doctors have a moral objection to this, or they are angry at the insurance companies for covering less services. Some doctors just continuously forget to write that even if the patient requests because they are busy.

The point is, big pharmas want to corner the market and keep making a ton of money. They know they have contacts and connections in the government and they send their sales force out to influence the doctors.

Big pharmas and big insurance companies want to continue to charge more while offering less, and will do whatever they can get away with in order to do so. I don't see an end to the overinflation of medical care until doctors start refusing to take insurance and charging all the patients the same amount the actually get from the insurance companies (which is usually around $40 for a visit). They currently have to bill the insurance companies between $150 and $200 worth of services, and law requires them to charge the same amount to cash customers that they charge to insurance customers. Then the insurance companies only pay a fraction of the amount billed.

Can you guess why the law requires doctors to do that? Lobbyists from the insurance companies. Suckage!

[fuck-hugh.livejournal.com]

The reason for this has to do with the nature of price. We take price as a signal for a lot of things but in something that isn't a commodity like oil or coal we assume that changes in price reflect a difference in quality. This is the same reason why Ben Affleck movies cost just as much as movies you might be interested in seeing. If you saw that movie was charging 1.50 and the rest of the movies are charging 7.00 you would just know that you are in for trouble if you go the cheaper route.

The generic drug's price is lower because the cost manufacturing is so little and of course they have a slight (or perhaps large) credibility gap due to their lack of marketing. It's also a market with no real barriers to entry due to the expired patent. The brand name price is higher because they set their price based on the idea that while they are selling fewer they will make more money because they are making a statement about their quality. They go for the market that either has a lot of money and doesn't want to fool around with a generic brand or is pretty stupid and think that they don't want to fool around with a generic brand. A drug's inventor might eventually get out of the market for their drug if the rich and the ignorant are not in the market for the drug any longer.

The fact is that there are a lot of problems with the prescription drug supply in this country. Because of the high price and fixed demand a black market has been created for people who can't afford the high prices but still need it. This happens most often in thefts at the pharmacy itself or of the trucks delivering the drugs in the first place. I'll leave it to your imagination to decide how people cover their tracks in the first case and why the second case is probably the better things for consumers. So you might as well go with generic because chances are no one is going to tamper with it to make a quick buck on the black market.