Comments on: Activists Deride Pharma For Threatening Thailand

By: Bob Freeman

Bob Freeman — Thu, 21 Feb 2008 18:34:31 +0000

Someone, I too was in the industry for about 20 years, much to my great surprise. Some companies needed a token liberal and that was my role.

Anyway, I would argue that Ramsey pricing gives a higher welfare gain than one that would occur from a single global price. On the subject of early access, I agree with your point that other countries do grant early access but I would add the qualification that some do a better job in distinguishing “good” technology from “unnecessary” technology.

I remember days when pharma did not pander before wall street analysts. Those were much better times.

I don’t think meaningful reform will occur, so the only policies I can recommend are to use the tax system to recoup some of the excesses we see. And, using the tax system to replace the price system to stimulate R & D into true innovation.

By: someone

someone — Thu, 21 Feb 2008 15:55:28 +0000

Bob - I have been in the pharma industry for many, many, years (marketing)and I am familiar with Ramsey pricing (actually Ramsey-Boiteux pricing) and it should only be used for commodities such as Telecom and public utilities regulations - not pharmaceuticals..

There are many countries that have the same access to health care that Americans do (in some cases they access it faster than us) and their government continues to sponsor it.

Health care really needs to be in the hands of not for profit organizations. As long as it is corporations that are for profit that can impact, research and health care citizens are doomed. Corporations are bound by law to think of one thing only - shareholder value. Unfortunately shareholder value is only measured by profits. That’s the problem…

By: Bob Freeman

Bob Freeman — Thu, 21 Feb 2008 00:50:04 +0000

No disagreement, Someone; the practice you’re referring to is called “Ramsey Pricing”, a type of price discrimination where markets are charged different prices according to their willingness and ability to pay. It is true, with qualifications, that the US pays the higest prices. (It’s a little tricky when you make adjustments for exchange rates and purchasing power.)

As long as Americans demand early and unfettered access to innovations, perceived or actual, prices will be higher in the absence of governmental intervention. It’s also important to note that pharma advertising is very restricted and taxed in some EU countries. While we have “commercial free speech”, I maintain the only alternative is to impose taxes or supplemental rebates on drug ads.

By: someone

someone — Wed, 20 Feb 2008 23:37:55 +0000

Bob Freeman said: “Odd in reference to Thailand’s recent emergence as a low-cost source of medical services for Americans. That, of course, has little benefit for their citizens”.

Perhaps it is because Americans are getting sick (pardon the pun) and tired of paying the prices we pay over here? The income from this helps them tremendously.

The issue here is that countries like Thailand subsidize health care for their citizens, it is not the profitable “for business” agenda as we have here in the States.

Governments who are working to keep their health care public and continue to provide public access need to be able to negotiate fair pricing. We must resist the urge to impose our shoddy system on them. Last I checked there were 42 million Americans without access to health care. Are we really one of the great countries of the world? I don’t think so….

We need to take better care of our citizens and we need to stop interfering with foreign governments ability to deliver health care to their citizens.

By: Bob Freeman

Bob Freeman — Wed, 20 Feb 2008 22:43:11 +0000

Outside, I would look forward to continuing our dialog as this continues to evolve. I, too, have a strong interest in trade and corporate social responsibility issues.

thank you for sharing your insights.

By: Outside the Box

Outside the Box — Wed, 20 Feb 2008 19:19:52 +0000

Bob - I agree; I have some inside knowledge of the extent of IP infringement in Thailand and it is very big. The complex nature of the industrial/economic/political mix in Thailand (and a number of other countries) makes this a very thorny issue indeed - but one we need to solve unless whole markets are to be given up.

By: Bob Freeman

Bob Freeman — Wed, 20 Feb 2008 18:53:57 +0000

One would think, Outside . . ., that a compromise will be reached, probably a price concession with an agreement that other markets will not be supplied. I’m not as familiar with Thailand’s manufacturing infrastructure so my comments are speculative at best.

Odd in reference to Thailand’s recent emergence as a low-cost source of medical services for Americans. That, of course, has little benefit for their citizens.

Governmental instability is a great unknown too.

By: Outside the Box

Outside the Box — Wed, 20 Feb 2008 18:36:33 +0000

There is always a bit of a dilemma when a nation claims that drug prices are too high for the HIV/AIDS population and yet can afford an air force equipped with F-16’s. I know this is not the real argument here, but I agree with Bob that USTR really has other fish to fry. Mind you, that doesn’t make the problem any easier to resolve, I just hope that all parties will retain clarity of thought and a willingness to compromise (or is that just simply unrealistic in this caustic and charged environment?).

By: Bob Freeman

Bob Freeman — Wed, 20 Feb 2008 18:15:26 +0000

A great deal of rhetoric from both sides.

However, I doubt the USTR will choose the nuclear option of imposing sanctions for one sector, pharma. There are bigger fish to fry, if you’ll excuse the tired cliche, on the USTR’s priority list.