TorteDeForm

Justinian Lane

Offensive Medicine is Profitable

I recently wrote about the possibility that the pharmaceutical industry has been paying doctors to expand disease guidelines in order increase the number of people who "need" prescription medication. I was reminded of that post when I read this article that appeared in December in the San Jose Mercury News:

"Drug companies continue to spend more than $150 million a year on their lobbying efforts. Just how brazen are they? They didn't hesitate at all to make Billy Tauzin, the former Republican House representative from Louisiana who negotiated the $500 billion bill to expand Medicare drug coverage, one of the industry's chief lobbyists...

But the pharmaceutical industry remains near the top of Fortune 500 magazine's ranking of the most profitable industries in the United States, realizing a 15.7 percent profit as a percentage of its revenues. That's significantly higher than the electronics, entertainment, insurance and home builders industries.

At the same time, the prescription drug costs to American consumers are out of control. Americans spent more than $240 billion on prescription drugs in 2005."

For the record, that $240 billion is a little low. A later article put the figure at $279 billion and noted pharmaceutical sales were up 7% globally.

If that 15.7% figure is accurate, that means pharmaceutical companies earned around $40 billion in profit last year. I guess that means they actually can afford to fairly compensate the victims of defective drugs.

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Posted at 12:57 PM, Apr 09, 2007 in In the News
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Comments

Justinian: If you want to stick to Bigpharma and help the patient, reduce the life of the patent by one year each year, until it reaches 5 years. The rate of innovation is greater if a patent lasts 20 years, the pace of change during the age of guilds and the passage of the Statute of Monopolies, or 5 years, the turnaround time of today?

The patent is in Article I Section 8 of the Constitution, and permanently ensconed. Its parameter are statutory. I support making patents last one year. To force innovations turn arounds to spin faster.

Posted by: Supremacy Claus | April 9, 2007 9:40 PM

Oh no! If we were to shorten the length of patents, there would be no incentive for pharmaceuticals to develop new drugs. Such a drastic change would mean our only treatment options would be aspirin or leaches. (That was sarcasm, btw.)

Posted by: Justinian Lane | April 10, 2007 1:06 PM

Justinian: There would be no incentive to file patents, just to develop new methods and products ahead of the freely copying competition. See fashion, cars, architecture, medical care (patents unenforceable when it comes to life saving surgical methods, by statute). Doing fine, spinning along in double time compared to CD's and pharmaceuticals.

What would there also not be? The patent law scam, and no patent lawyers, and their corrupt running dogs on the DC Circuit bench. The SC will rule, hopefully, put these bunko artists out of business, this year.

Nations that disrespect intellectual property have growth rates of 9%. Those that do are lucky to have 3% yearly growth.

Posted by: Supremacy Claus | April 10, 2007 9:27 PM