succumbing to peer pressure

Monday, March 13, 2006

Also, another example of why I couldn't work for a pharmaceutical company:

On Feb. 3, Joyce Elkins filled a prescription for a two-week supply of nitrogen mustard, a decades-old cancer drug used to treat a rare form of lymphoma. The cost was $77.50.

On Feb. 17, Ms. Elkins, a 64-year-old retiree who lives in Georgetown, Tex., returned to her pharmacy for a refill. This time, following a huge increase in the wholesale price of the drug, the cost was $548.01.


The increase has stunned doctors, who say it starkly illustrates two trends in the pharmaceutical industry: the soaring price of cancer medicines and the tendency for those prices to have little relation to the cost of developing or making the drugs.

(emphasis mine)
(procrastination much?)


Anonymous Anonymous said...

Well you have your fixed costs and your variable costs.. right? And I have to assume the fixed costs are pretty straightforward - the relatively inconsequential material and packaging costs etc. The variable costs are a totally different ballgame. You have all your administrative overhead - employee salaries, shared assets expenses etc.. but then you have all that damned R&D. We know it's mad-expensive. But how do you chop it up? Do you allocate the R&D just to the specific drug it was spent researching, or do you aggregate all the r&d on all the projects and then spread it over all drug prices however you can to keep the average price down? Surely the latter is the more socialist choice, but then ALL drugs cost a little too much for anyone that is broke to bear. In addition, I have to assume health insurance cries a river. SO... you end up making the more "complicated" drugs more expensive... but then some basic need like the next polio vaccine might costs a fortune, while something relative 'unimportant' like neosporin garners all the price savings. SO.. you are back to the drawing board. The end result of all these games has to be occasional re-allocation of the what's-going-to-be-expensive v. what's-going-to-be-cheap model. The real burn is that the poor drug companies (like that?) have to deal with HUMANS. If they were an automotive supplier, they could afford to hold up the occasional assembly line due to a hasty reallocation. With these damned humans, however, that always results in straight-up strife. It's gotta suck to have every under or over-allocation end up in death and despair. Add in the fact that inaction is equally fatal, and you have quite a shite state of affairs. I'm throwin em a bone and proffering that the overpriced mustard gas likely got some critical meds in other hands much more reasonably. So what's the exchange rate? How many avoided staff infections are worth a missed cancer treatment?
you gotta wonder.

11:37 AM  

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