[Toro]

Can anybody offer an intelligent rebuttal to this argument. "Americans are greedy idiots" is not an intelligent rebuttal BTW.

$1:

Myth #2 The Canadian Drug Story

Ah … one of the holy myths of the “US health care sucks” crowd. This should be fun.

The general story is how you can buy many drugs in Canada cheaper than you can buy them in the US. This story is often, without specifically tying the logic together, taken as an obvious indictment of the US’s (relatively) free market system. This is grossly misguided.

Here’s what happens. We have a (relatively) free market in the US where drug companies spend a ton to develop new wonder drugs, a non-trivial amount of which is spent to satisfy regulatory requirements. The cost of this development is called a “fixed cost.” Once it’s developed it does not cost that much to make each pill. That’s called a “variable cost.” If people only paid the variable cost (or a bit more) for each pill the whole thing would not work. You see, the company would never get back the massive fixed cost of creating the drug in the first place, and so no company would try to develop one. Thus, companies have to, and do, charge more than the variable cost of making each pill.[2] Some look at this system and say to the drug companies “gee, it doesn’t cost you much to make one more pill, so it’s unfair that you charge much more than your cost.” They are completely wrong and not looking at all the costs.

So, let’s bring this back to our good natured friends to the North (good natured barring hockey when they’ll kill you as soon as look at you[3]). They have socialized medicine and they bargain as the only Canadian buyer for drugs, paying well below normal costs. Drug companies that spent the enormous fixed costs to create new miracles are charging a relatively high cost in the free and still largely competitive world (the US) to recoup their fixed cost and to make a profit. But socialist societies like Canada limit the price they are allowed to charge. The US-based company is then faced with a dilemma. What Canada will pay is not enough to ever have justified creating the miracle pill. But, once created, perhaps Canada is paying more than the variable cost of each pill. Thus, the company can make some money by also selling to Canada at a lower price as it’s still more than it costs them to make that last pill.

However, this is an accident of Canada being a less-free country than the US, able to bargain as one nation, much smaller, and next door. If we all tried to be Canada it’s a non-working perpetual motion machine and no miracle pills ever get made because there will be nobody to pay the fixed costs. I’m a big fan of Canadians in general (particularly Wayne Gretzky and Mario Lemieux, who if healthy probably would have eclipsed Gretzky – but I digress), but when it comes to pharmaceuticals they are lucky parasitic hosers. Drug companies in general sell their products to Canada at low prices, making a little profit, and reducing slightly the amount they need to charge other North Americans. This does create the silly illusion that the Canadian system is somehow better than ours because our own drugs are cheaper there. They are only cheaper to the extent we are subsidizing them by paying their portion of drug development costs and, unfortunately, we cannot subsidize ourselves (or we go blind).[4]

So, what is the purpose behind those who tell tales of these cheap Canadian drugs? Obviously they seek to ridicule our freer system by putting the parasitic and socialist system on a pedestal. They seek to imply that our system is broken, and delivers only expensive drugs, when the socialist Canadian system delivers the goods for its people. Thus, they implicitly argue that we need to have socialism here. It’s not complicated.

So, repeat after me. We could go with the Canadian system and have super cheap drugs, if only we can find a much bigger, much more medically advanced, much freer country right next to us to make miracle drugs for themselves, and then we insist that we pay them only a bit above their variable cost for our share, and then they in turn agree to let us be their parasite. Mexico, would you mind helping us out?

http://zerohedge.blogspot.com/2009/07/c ... es-on.html

[Scape]

Simple. More than 50,000 drugs in formulary at this point. Most PROVINCIAL formularies only cover 5,000 if that. You want to charge more fill your boots because drugs are not a part of the health act but don't expect the taxpayer to foot the bill for the lastest wonder drug. It's still a free market.

[sandorski]

I somehow doubt that Drug Companies would Sell their Products in Canada if it meant they were losing Money on the Deal. I'm calling shens.

[Scape]

Exactly. The 1st giveaway was the idea all of Canada had the same plan. There never has been a federal drug program unless your RCMP or military.

[Toro]

They aren't losing money.

The argument is that Americans cover both the fixed and variable costs whereas Canadians cover the variable costs. Once your fixed costs are covered, you generate cash flow if the variable revenues are greater than the variable costs.

I don't know if it is true or not. I'm just wondering.

[Wada]

I only need to look as deep as citizens who one day are secure and because of medical cause are dirt poor, broke and beat the next. Few if any go bust for medical reasons, aside from disability, in Canada

[commanderkai]

sandorski sandorski:

I somehow doubt that Drug Companies would Sell their Products in Canada if it meant they were losing Money on the Deal. I'm calling shens.

They're not "losing money" they're making LITTLE money. To quote:

"Drug companies in general sell their products to Canada at low prices, making a little profit, and reducing slightly the amount they need to charge other North Americans. This does create the silly illusion that the Canadian system is somehow better than ours because our own drugs are cheaper there."

So far, I didn't read anything about a supposed "Federal drug plan", or companies losing money. But you need to remember. These profits don't go into some bank account. They usually get reinvested into the company, be it with higher wages to the employee, new stores/labs/facilities, or new research projects. Making little profit makes little incentive for companies to reinvest, since employees expect their bonuses at the end of the year.

[Proculation]

Drugs that are covered are much smaller than in the US. I often come into drugs that are not covered so I have to pay the entire price + the Health Canada fees. That's why. And there's also a lot of drugs that are not approved here but are by the FDA.

[Scape]

They stated they were selling to Canada not to any particular province. Yet, there is no national 'Canadian' plan.

[Scape]

Proculation Proculation:

Drugs that are covered are much smaller than in the US. I often come into drugs that are not covered so I have to pay the entire price + the Health Canada fees.

Health Canada fee's are for health insurance not drug coverage (like a hosptial/doctor/clinic visit). However, you can get private medical insurance in Canada such as Manulife or Blue Cross and as per their poilcy would cover drugs not cover by provincial programs.

[pldfk]

The main problem with the arguement is that it assumes that the US is the only country developing the newest wonder drugs, not true. The Chicken Pox Vaccine came to all of us from Japan, yet is still cheaper in Canada. Our socialized health care does help, as our Government keeps a closer watch on manufacturing, costs and we sell to 'home' first before export.

[Toro]

The US is certainly not the only country developing drugs. However, there is a disproportionate amount developed in America.

Canada develops very few drugs relative to the size of its economy.

[sandorski]

commanderkai commanderkai:

sandorski sandorski:

I somehow doubt that Drug Companies would Sell their Products in Canada if it meant they were losing Money on the Deal. I'm calling shens.

They're not "losing money" they're making LITTLE money. To quote:

"Drug companies in general sell their products to Canada at low prices, making a little profit, and reducing slightly the amount they need to charge other North Americans. This does create the silly illusion that the Canadian system is somehow better than ours because our own drugs are cheaper there."

So far, I didn't read anything about a supposed "Federal drug plan", or companies losing money. But you need to remember. These profits don't go into some bank account. They usually get reinvested into the company, be it with higher wages to the employee, new stores/labs/facilities, or new research projects. Making little profit makes little incentive for companies to reinvest, since employees expect their bonuses at the end of the year.

If they're desperate, they'll cut their Advertising/Marketing Budgets which are larger than their R&D Budgets. So much R&D is focused in the US not because it's the only way for them to Profit, but because they can demand excessive prices for greater Profit than they can get elsewhere.

Don't fall for these BS arguments put forth by the Pharma Industry.

[dino_bobba_renno]

sandorski sandorski:

I somehow doubt that Drug Companies would Sell their Products in Canada if it meant they were losing Money on the Deal. I'm calling shens.

They do, prices are regulated by the Patented Medicine Prices Review Board. As well I think there some kind of law about patents and generic or no name drugs. I'm a little fuzzy on the subject though so I could be mistaken.

I don't think drugs are really a that much cheaper here though. A bit but not by as much as it's claimed to be. Also you have to factor in income levels vs. standards of living which isn't often over looked to get a true picture.

[Scape]

Toro Toro:

The US is certainly not the only country developing drugs. However, there is a disproportionate amount developed in America.

Canada develops very few drugs relative to the size of its economy.

The primary focus is public health not private industry. For example Vaccines:

Canadian swine flu vaccine set for October