Rangel wants to Bargain with Pharm Cos

[MoTaVa]

Rangel is now talking about the government bargaining with pharmaceutical companies to try and lower the cost of prescription drugs.

Not a bad idea maybe, as far as toying with free market economy.

The dems seem to be all over the place. They're going to try and rally behind some issue and try to save face by bragging what a great thing they did, so why not pick an easy one. What a joke.

[SpicyMcVoodoo]

Originally Posted by MoTaVa

Rangel is now talking about the government bargaining with pharmaceutical companies to try and lower the cost of prescription drugs.

Not a bad idea maybe, as far as toying with free market economy.

The dems seem to be all over the place. They're going to try and rally behind some issue and try to save face by bragging what a great thing they did, so why not pick an easy one. What a joke.

Why is bargaining with pharma companies a joke?

[6SpeedTA95]

Originally Posted by SpicyMcVoodoo

Why is bargaining with pharma companies a joke?

Because it doesn't treat the problem, it treats the symptoms of the problem.

[SpicyMcVoodoo]

Originally Posted by 6SpeedTA95

Because it doesn't treat the problem, it treats the symptoms of the problem.

What's the problem?

[6SpeedTA95]

Originally Posted by SpicyMcVoodoo

What's the problem?

Because if you just treat the symptoms the problem can get worse...if your arm kept hurting and you took some tylenol and it kept hurting and all you did was up the dosage to treat the symptoms and it turns out your arm is broken then you've done yourself a dis service. So how about we treat the root of some of these health problems not just the manifestation of the problem?

[Thorgrim]

like all analogies, it only works if it is accurate

you are assuming that treating the symptoms is going to lead to a dramatically worse situation

I don't see the healthcare community crashing in two years (once we get Hillary installed as new dictator as George II abdicates)

[MoTaVa]

You missed my point. I wasn't implying that bargaining with pharms was a joke. My point is that congress can muscle the pharms around easily and there is no glory in it. There is good in it for the folks that need those scripts, but wouldn't you agree that this issue is not something to toss around in the face of, lets say.....party meltdown.

Rangel Dangle is what we should call him. He dangles all this crazy far fetched crap to take attention away from the fact that his partys' faces are freaking out like 5th graders at recess time.

Take Pelosi. Now she wants to put a corrupt ex-judge in a seat that will have direct oversight on the safety of my ass. This makes me incredibly uncomfortable. Is she retarded? This judge was impeached for bribery. Is this the kind of man that should be Chair of The Intel Com. ?

[SpicyMcVoodoo]

Originally Posted by 6SpeedTA95

Because if you just treat the symptoms the problem can get worse...if your arm kept hurting and you took some tylenol and it kept hurting and all you did was up the dosage to treat the symptoms and it turns out your arm is broken then you've done yourself a dis service. So how about we treat the root of some of these health problems not just the manifestation of the problem?

No, I'm asking what the root is.

[Thorgrim]

Originally Posted by MoTaVa

You missed my point. I wasn't implying that bargaining with pharms was a joke. My point is that congress can muscle the pharms around easily and there is no glory in it. There is good in it for the folks that need those scripts, but wouldn't you agree that this issue is not something to toss around in the face of, lets say.....party meltdown.

Rangel Dangle is what we should call him. He dangles all this crazy far fetched crap to take attention away from the fact that his partys' faces are freaking out like 5th graders at recess time.

Take Pelosi. Now she wants to put a corrupt ex-judge in a seat that will have direct oversight on the safety of my ass. This makes me incredibly uncomfortable. Is she retarded? This judge was impeached for bribery. Is this the kind of man that should be Chair of The Intel Com. ?

No one has the intel chairmanship yet

However, if you are displeased with your new Democratic Leaders of Congress, I suggest you donate to the RNC and go out phone bank for Republicans next election

[6SpeedTA95]

Originally Posted by SpicyMcVoodoo

No, I'm asking what the root is.

Many of the treatments offered here are NOT offered under any socialized medicine/government run healthcare systems. Why? Because they're deemed too expensive.

You wanna know why drug prices are higher here? Because we subsidize drug prices for hte rest of the countries on the face of the planet. Here's a quick lesson in how it works.

Company XYZ has spend 1.5 billion on R&D for their new pill, lets say they expect to have a approximately 200 million in distribution costs associated with this pill. This brings the total up to 1.7 billion. This company expects to distribute 1 billion pills before their patent runs out in 5 years. The cost excluding distribution and R&D to produce each pill is estimated at 25 cents and the company estimates they will distribute the 1 billion pills adding another 250 million dollars to the cost of the pill. Necessary cashflows for this particular pill are 2.5 billion dollars to make a profit and meet R&D demands for the future.

Now the company goes to Canada and says hey we have this new pill that could greatly aid in helping people in your country. The price is 2.50/pill, Canada says no way it cost you 75 cents to produce each pill we're not giving you 10 times that! So Canada offers 40 cents for 25 million pills, at this point the R&D is "sunk cost" and if you know anything about business you pretty much have to ignore it at this stage of the game.
40 x .75 = 30 million dollars

Next the company moves on to the EU (I'm lumping the entire EU in here because each country would be different and I'm not writing this for 11ty billion countries). The EU says this is a great pill we will give you 1 dollar per pill and we want 400 million of them.
400x1 = 400 million dollars

Next on the list is Australia. Australia wants 30 million pills at a cost of 1.33 each each.
30 x 1.33 = 40 million

Next up is Asia (once again lumping some countries here) They want 180 million pills at 1 dollar each.
180 x 1 = 180 million dollars.

At this point a total of 650 million pills have been purchased for a total of 650 million dollars. That means to meet cashflow goals the company needs 1.85 BILLION more dollars. Why? Because no one has paid them for their extensive and tedious R&D.

Finally the US comes along and theres demand for 350 million pills. 350 million pills and with 1.85 billion dollars left to raise the US gets charged 5.28/pill. Why? Because the companies would lose money, do you know what happens when a company continually loses money? They go out of business!

1) The system as refused to modernize and is for the most part extremely ineffecient in dealing with patient data and records.
2) We need to leverage technology to help streamline the manual process throughout much of the medical system.
3) We need to make sure other countries are paying OUR companies fair prices for our drugs.
4) You can't merely treat symptoms of our medical problem and expect it to go away.
5) Put consumers back in the loop on what it actually COSTS for medical care. Sure premiums have gone up but many americans are buffered by excellent insurance and dont see the real costs just a "premium"
6) Charge all everyone at least 20 bucks each time they go to the dr for anything other than a yearly physical.
7) Not everyone can have the "senators" package because the congress has 300 million people funding the healthcare for 535 individuals, do the math


edit: Spicy this is by no means the entire problem with the medical system, but as it relates to Rx drugs this is why we're getting screwed in the pooper.

[DosEquis]

Originally Posted by MoTaVa

You missed my point. I wasn't implying that bargaining with pharms was a joke. My point is that congress can muscle the pharms around easily and there is no glory in it. There is good in it for the folks that need those scripts, but wouldn't you agree that this issue is not something to toss around in the face of, lets say.....party meltdown.

Rangel Dangle is what we should call him. He dangles all this crazy far fetched crap to take attention away from the fact that his partys' faces are freaking out like 5th graders at recess time.

Take Pelosi. Now she wants to put a corrupt ex-judge in a seat that will have direct oversight on the safety of my ass. This makes me incredibly uncomfortable. Is she retarded? This judge was impeached for bribery. Is this the kind of man that should be Chair of The Intel Com. ?

I think it is appropriate to bargain first. It is supposed to be a "free market" system after all. Lets play by those rules first and see what we can come up with. If we get a satisfactory result everyone across the board will be happy. People will be happy they have cheaper drugs, democrats will be happy because they can take credit for it, and republicans can be happy there was not an increase in government to get the job done. There is nothing wrong with negotiating first.

I like his idea of bringing the draft and other "crazy things" into the relm of possibilities.

I don't know enough about the third issue so i will not comment.

[SpicyMcVoodoo]

Originally Posted by 6SpeedTA95

Many of the treatments offered here are NOT offered under any socialized medicine/government run healthcare systems. Why? Because they're deemed too expensive.

You wanna know why drug prices are higher here? Because we subsidize drug prices for hte rest of the countries on the face of the planet. Here's a quick lesson in how it works.

Company XYZ has spend 1.5 billion on R&D for their new pill, lets say they expect to have a approximately 200 million in distribution costs associated with this pill. This brings the total up to 1.7 billion. This company expects to distribute 1 billion pills before their patent runs out in 5 years. The cost excluding distribution and R&D to produce each pill is estimated at 25 cents and the company estimates they will distribute the 1 billion pills adding another 250 million dollars to the cost of the pill. Necessary cashflows for this particular pill are 2.5 billion dollars to make a profit and meet R&D demands for the future.

Now the company goes to Canada and says hey we have this new pill that could greatly aid in helping people in your country. The price is 2.50/pill, Canada says no way it cost you 75 cents to produce each pill we're not giving you 10 times that! So Canada offers 40 cents for 25 million pills, at this point the R&D is "sunk cost" and if you know anything about business you pretty much have to ignore it at this stage of the game.
40 x .75 = 30 million dollars

Next the company moves on to the EU (I'm lumping the entire EU in here because each country would be different and I'm not writing this for 11ty billion countries). The EU says this is a great pill we will give you 1 dollar per pill and we want 400 million of them.
400x1 = 400 million dollars

Next on the list is Australia. Australia wants 30 million pills at a cost of 1.33 each each.
30 x 1.33 = 40 million

Next up is Asia (once again lumping some countries here) They want 180 million pills at 1 dollar each.
180 x 1 = 180 million dollars.

At this point a total of 650 million pills have been purchased for a total of 650 million dollars. That means to meet cashflow goals the company needs 1.85 BILLION more dollars. Why? Because no one has paid them for their extensive and tedious R&D.

Finally the US comes along and theres demand for 350 million pills. 350 million pills and with 1.85 billion dollars left to raise the US gets charged 5.28/pill. Why? Because the companies would lose money, do you know what happens when a company continually loses money? They go out of business!

1) The system as refused to modernize and is for the most part extremely ineffecient in dealing with patient data and records.
2) We need to leverage technology to help streamline the manual process throughout much of the medical system.
3) We need to make sure other countries are paying OUR companies fair prices for our drugs.
4) You can't merely treat symptoms of our medical problem and expect it to go away.
5) Put consumers back in the loop on what it actually COSTS for medical care. Sure premiums have gone up but many americans are buffered by excellent insurance and dont see the real costs just a "premium"
6) Charge all everyone at least 20 bucks each time they go to the dr for anything other than a yearly physical.
7) Not everyone can have the "senators" package because the congress has 300 million people funding the healthcare for 535 individuals, do the math


edit: Spicy this is by no means the entire problem with the medical system, but as it relates to Rx drugs this is why we're getting screwed in the pooper.

Interesting, except Pfizer, for example, made something like 8 billion in profit last year. So there's a lot of room to bargain down prices without making medicines unprofitable and the company go out of business.

[6SpeedTA95]

Originally Posted by SpicyMcVoodoo

Interesting, except Pfizer, for example, made something like 8 billion in profit last year. So there's a lot of room to bargain down prices without making medicines unprofitable and the company go out of business.

You bargain down prices and you bargain down future R&D keep that in mind.

[SpicyMcVoodoo]

Originally Posted by 6SpeedTA95

You bargain down prices and you bargain down future R&D keep that in mind.

Not necessarily. That would only be true if 100% of profits were reinvested back in to R&D. Are they?

[6SpeedTA95]

Originally Posted by SpicyMcVoodoo

Not necessarily. That would only be true if 100% of profits were reinvested back in to R&D. Are they?

So you cut out your investors and offer them little or no return on their money? Thats a horrible idea then you'll lose investment revenue.

I'm ok with the government conducting real negotiations with the companies but that means they need to udnerstand that someone somewhere is going to pay for the lost revenue. Either you and I because we have insurance and can afford to pay or the company, its employees and shareholders will pay. There are no free rides, we need to get together with all these other countries and force them to pay a reasonable price for these drugs.

[SpicyMcVoodoo]

Originally Posted by 6SpeedTA95

So you cut out your investors and offer them little or no return on their money? Thats a horrible idea then you'll lose investment revenue.

Why does it have to be rolling in profits vs. no return on investor's money? If Pfizer made 5 billion instead of 8 billion last year, the company wouldn't suddenly become worthless to investors, and the R&D budget could very well go unaffected.

[6SpeedTA95]

Originally Posted by SpicyMcVoodoo

Why does it have to be rolling in profits vs. no return on investor's money? If Pfizer made 5 billion instead of 8 billion last year, the company wouldn't suddenly become worthless to investors, and the R&D budget could very well go unaffected.

They wouldn't lose investors? Suddenly the competition would look much better for investment purposes that or an entirely different industry.

Again I have no problem with the government trying to negotiate but they need to look at the whole picture not just "prices".

[SpicyMcVoodoo]

Originally Posted by 6SpeedTA95

They wouldn't lose investors? Suddenly the competition would look much better for investment purposes that or an entirely different industry.

Again I have no problem with the government trying to negotiate but they need to look at the whole picture not just "prices".

Here's the way I'm thinking, tell me where I'm wrong:

If the profits went from 8 billion to 5 billion as a result of negotiation, certainly the stock price would take a dive from investors readjusting their valuation. However, that wouldn't necessarily affect Pfizer's financial situation. Couldn't the company simply carry on exactly as it has been, only the end result will be 5 billion profit instead of 8?

I thought that when investors buy and sell shares of Pfizer on the open market, that doesn't affect Pfizer's internal budget. This isn't an IPO. They already got their capital when they issued the shares. Now people outside of Pfizer are just trading with each other.

And since there is still a profit to be made from carrying on exactly as they have been, they'll keep doing exactly that, and nothing will be affected. The only difference is that the company makes 3 billion less in profit per year.

[6SpeedTA95]

Originally Posted by SpicyMcVoodoo

Here's the way I'm thinking, tell me where I'm wrong:

If the profits went from 8 billion to 5 billion as a result of negotiation, certainly the stock price would take a dive from investors readjusting their valuation. However, that wouldn't necessarily affect Pfizer's financial situation. Couldn't the company simply carry on exactly as it has been, only the end result will be 5 billion profit instead of 8?

I thought that when investors buy and sell shares of Pfizer on the open market, that doesn't affect Pfizer's internal budget. This isn't an IPO. They already got their capital when they issued the shares. Now people outside of Pfizer are just trading with each other.

And since there is still a profit to be made from carrying on exactly as they have been, they'll keep doing exactly that, and nothing will be affected. The only difference is that the company makes 3 billion less in profit per year.

The problem is if demand sinks far enough for their stock they'll be forced to buy it back, or a portion of it back requiring significant capital outflows.

You're not necessarily wrong, my point is that it is essential we look at the entire picture and not just patch the result of the problems.