Klinton Outlines Legislative Priorities

[Burgold]

No matter what anyone says, I think there is something wrong with a system that says it will be cheaper to buy a drug that is produced in Michigan, exported to Canada, bought in Canada and then imported back to Michigan than it is to buy the drug in the state where it is produced.

There are things that are terribly broken in our health care system

[luckydevil]

Y'know, this kind of stuff is really what gets me upset at liberals. They setup these boogeymen like "Big Oil," "Transnational Corporations," and "bloodsucking insurance companies." Insurance companies are just independent actors in the Health Care morass.

You know what pisses me off about conservatives, is when they downplay the influence of big business. I am hardcore libertarian, but the notion that big insurance are somehow independent in all of this is pure nonsense.

[JohnLockesGhost]

No matter what anyone says, I think there is something wrong with a system that says it will be cheaper to buy a drug that is produced in Michigan, exported to Canada, bought in Canada and then imported back to Michigan than it is to buy the drug in the state where it is produced.

There are things that are terribly broken in our health care system

The situation with pharmaceuticals is very frustrating too. But the fault isn't with pharmaceutical companies, the problem originates with governments using their power to extort cheap drugs and making Americans pay the difference.

[Burgold]

The situation with pharmaceuticals is very frustrating too. But the fault isn't with pharmaceutical companies, the problem originates with governments using their power to extort cheap drugs and making Americans pay the difference.

I suspect the problem is D) all of the above. That even includes me because as a stock holder I demand that my companies always beat earnings forcasts and grow their profits and revenues at a very high rate. Still, big pharma can't be excused, nor can insurance cos, and neither can big government for their role in the creation of the above ridiculous scenario.

[JohnLockesGhost]

You know what pisses me off about conservatives, is when they downplay the influence of big business. I am hardcore libertarian, but the notion that big insurance are somehow independent in all of this is pure nonsense.

I downplay the influence of big companies only in relation to the influence of the government. If someone insists on blaming "bloodsucking companies" for the problems with health care, then I'll do my utmost best to point out the obfuscation.

[Predicto]

Y'know, this kind of stuff is really what gets me upset at liberals. They setup these boogeymen like "Big Oil," "Transnational Corporations," and "bloodsucking insurance companies." Insurance companies are just independent actors in the Health Care morass.

You arre correct, sorta.

If I could set myself as a middleman so that every dollar JohnLockesGhost spent on anything had to be cleared through me, and I got to keep a third of it, I would do it.

Technically, I would be an "independent actor" working in my own best interest, but it wouldn't mean that it was a good system of handling JohnLockesGhost's purchases.

I am not saying that insurance companies are evil. However, I am saying that the healthcare model that has evolved in this country has created a huge insurance bureaucracy that is essentially parasitical to the essential function of providing health care.

[luckydevil]

I downplay the influence of big companies only in relation to the influence of the government. If someone insists on blaming "bloodsucking companies" for the problems with health care, then I'll do my utmost best to point out the obfuscation.

They are not above criticism. But I do agree with the point that if people on the left want to get serious about confronting big business, they have to confront the problem of big government. Government is the root of all of this. The answer isn't more government.

[chomerics]

The situation with pharmaceuticals is very frustrating too. But the fault isn't with pharmaceutical companies, the problem originates with governments using their power to extort cheap drugs and making Americans pay the difference.

Come on now, I am really not behind government health care, but I do know the situation is completely effed up and something should be done. I also know that your last statement was a complete crock of crap.

the problem originates with governments using their power to extort cheap drugs and making Americans pay the difference.

That is a boldfaced lie and you know it. If it were true, it would not be CHEAPER to purchase drugs from Canada and import them into the United States. It is the completely disingenuous rants like this that turned America towards liberalism. How anyone can say this with a straight face is beyond me. You know damn well we gave the pharmaceutical companies a blank check when it comes to drugs, so don't try and state anything different.

[JohnLockesGhost]

I am not saying that insurance companies are evil. However, I am saying that the healthcare model that has evolved in this country has created a huge insurance bureaucracy that is essentially parasitical to the essential function of providing health care.

Good post.

Let me ask, what is the driving force behind the "evolution" of our health care system? Certainly not natural selection. Well, not totally true.

If we're to continue the biological analogy (it really is a good one), the government has constantly manipulated, altered and clouded the environment in which the health care industry has had to adapt. Out of this ridiculously manipulated environment springs the "bloodsucking" insurance model we have because that's what the government created, unintentionally. But, I'm sure their motives were pure.

[luckydevil]

If we're to continue the biological analogy (it really is a good one), the government has constantly manipulated, altered and clouded the environment in which the health care industry has had to adapt. Out of this ridiculously manipulated environment springs the "bloodsucking" insurance model we have because that's what the government created, unintentionally. But, I'm sure their motives were pure.

Nailed it

[JohnLockesGhost]

Come on now, I am really not behind government health care, but I do know the situation is completely effed up and something should be done. I also know that your last statement was a complete crock of crap.

That is a boldfaced lie and you know it. If it were true, it would not be CHEAPER to purchase drugs from Canada and import them into the United States. It is the completely disingenuous rants like this that turned America towards liberalism. How anyone can say this with a straight face is beyond me. You know damn well we gave the pharmaceutical companies a blank check when it comes to drugs, so don't try and state anything different.

I'm a little confused. What did I lie about?

[Predicto]

Good post.

Let me ask, what is the driving force behind the "evolution" of our health care system? Certainly not natural selection. Well, not totally true.

If we're to continue the biological analogy (it really is a good one), the government has constantly manipulated, altered and clouded the environment in which the health care industry has had to adapt. Out of this ridiculously manipulated environment springs the "bloodsucking" insurance model we have because that's what the government created, unintentionally. But, I'm sure their motives were pure.

I do not agree. Government is not the only thing that affects the workings of an economic system. Sometimes the system itself is structurally anticompetive.

[JohnLockesGhost]

Chomerics, originally posted by me a few weeks ago:

The fact is that because the Canadian government is a central purchaser, it can use its leverage to "negotiate" lower prices from the pharmaceutical companies. When I say "negotiate," I really mean "extort." Countries, like Canada, essentially tell drug companies that they'll buy their drugs at this price, or they'll violate their patent, steal their property and produce a generic. Drug companies would rather make some money than no money. Really the only country that doesn't "negotiate" lower prices is the United States. Because of this, we bear the burden of paying for all the research and overhead that goes into developing these drugs.

I've always believed it's stupid for the US government to try and prohibit the re-importation of "cheap drugs" from abroad. It's going to happen regardless. Instead the US government should protect the intellectual property of American drug companies. If these countries steal from America and assume they have a birthright to drugs developed with American dollars, they should face sanctions from the US government. And no, I'm not kidding at all.

Remember that episode a few years ago during the anthrax scare? The Canadian government sued Bayer in Canadian courts for charging to much for the drug Cipro. The courts ruled that the health service of Canada could steal the drug and produce a generic. Bayer had to eat all the costs it took to develop Cipro or raise the prices it charged elsewhere (read America). Americans should realize, it isn't "Big Pharmaceuticals" that are screwing them, but foreign governments that use the power of the state to take the burdens of paying for drug research off their citizens and transfer it to Americans.

[Predicto]

Chomerics, originally posted by me a few weeks ago:

The fact is that because the Canadian government is a central purchaser, it can use its leverage to "negotiate" lower prices from the pharmaceutical companies. When I say "negotiate," I really mean "extort." Countries, like Canada, essentially tell drug companies that they'll buy their drugs at this price, or they'll violate their patent, steal their property and produce a generic. Drug companies would rather make some money than no money. Really the only country that doesn't "negotiate" lower prices is the United States. Because of this, we bear the burden of paying for all the research and overhead that goes into developing these drugs.

I've always believed it's stupid for the US government to try and prohibit the re-importation of "cheap drugs" from abroad. It's going to happen regardless. Instead the US government should protect the intellectual property of American drug companies. If these countries steal from America and assume they have a birthright to drugs developed with American dollars, they should face sanctions from the US government. And no, I'm not kidding at all.

Remember that episode a few years ago during the anthrax scare? The Canadian government sued Bayer in Canadian courts for charging to much for the drug Cipro. The courts ruled that the health service of Canada could steal the drug and produce a generic. Bayer had to eat all the costs it took to develop Cipro or raise the prices it charged elsewhere (read America). Americans should realize, it isn't "Big Pharmaceuticals" that are screwing them, but foreign governments that use the power of the state to take the burdens of paying for drug research off their citizens and transfer it to Americans.

As an owner of two separate pharmaceutical stocks, I must say that I am glad that people are still buying that line that it is all about recovering our costs of drug production rather than being about maximizing our profit (like every other for profit business).

[JohnLockesGhost]

As an owner of two separate pharmaceutical stocks, I must say that I am glad that people are still buying that line that it is all about recovering our costs of drug production rather than being about maximizing our profit (like every other for profit business).

You know how you make a profit? Give people something they want. If a company is making a lot of money, I'm thinking, "Man they sure are helping a lot of people."

[chomerics]

Chomerics, originally posted by me a few weeks ago:

The fact is that because the Canadian government is a central purchaser, it can use its leverage to "negotiate" lower prices from the pharmaceutical companies. When I say "negotiate," I really mean "extort." Countries, like Canada, essentially tell drug companies that they'll buy their drugs at this price, or they'll violate their patent, steal their property and produce a generic. Drug companies would rather make some money than no money. Really the only country that doesn't "negotiate" lower prices is the United States. Because of this, we bear the burden of paying for all the research and overhead that goes into developing these drugs.

I've always believed it's stupid for the US government to try and prohibit the re-importation of "cheap drugs" from abroad. It's going to happen regardless. Instead the US government should protect the intellectual property of American drug companies. If these countries steal from America and assume they have a birthright to drugs developed with American dollars, they should face sanctions from the US government. And no, I'm not kidding at all.

Remember that episode a few years ago during the anthrax scare? The Canadian government sued Bayer in Canadian courts for charging to much for the drug Cipro. The courts ruled that the health service of Canada could steal the drug and produce a generic. Bayer had to eat all the costs it took to develop Cipro or raise the prices it charged elsewhere (read America). Americans should realize, it isn't "Big Pharmaceuticals" that are screwing them, but foreign governments that use the power of the state to take the burdens of paying for drug research off their citizens and transfer it to Americans.

JLG,I respect you, but I in no way believe that Canada has said it would "violate the patent unless you sell it to us for what we want to pay for it". There are so many different treaties, international patents and other things that I don't buy they are "extorting" money from drug companies. KISS and occams razor apply. . .

IMO, they are using their leverage as a massive consumer and getting the drug companies to sell them the drugs at a discounted rate provided they purchase x amount of the drug. This is the basic formation on almost every trade agreement. This is ALSO what our lawmakers REFUSED to allow our own country to do. They refused the government from negotiating a fair price from the drug companies. I find your stance on business to be very one sided and almost blind to the actual reality of modern day big business.

You seem to defend big business every step of the way, yet you know for a fact the economic conditions do not dictate that big business behave in an ethical manner. It is not in their best interest to do so, and they will not unless forced to. You can leverage them by using things like government purchasing power and create contracts which allow a fair profit margin as well as a cheaper price for consumers. Drugs are the one area where this is needed regulation simply because of the nature of the industry.

[Predicto]

You know how you make a profit? Give people something they want. If a company is making a lot of money, I'm thinking, "Man they sure are helping a lot of people."

Nice dodge. You didn't respond to my point.

Companies look to maximize their profit, not recover their costs. You know that.

It is not government interference that causes pharmaceutical companies to charge outrageous amounts for their drugs - it is because they have unique patented products and they will charge whatever they can get to maximize their profits. Like any economic actor in a similar situation.

[JohnLockesGhost]

JLG,I respect you, but I in no way believe that Canada has said it would "violate the patent unless you sell it to us for what we want to pay for it". There are so many different treaties, international patents and other things that I don't buy they are "extorting" money from drug companies. KISS and occams razor apply. . .

IMO, they are using their leverage as a massive consumer and getting the drug companies to sell them the drugs at a discounted rate provided they purchase x amount of the drug. This is the basic formation on almost every trade agreement. This is ALSO what our lawmakers REFUSED to allow our own country to do. They refused the government from negotiating a fair price from the drug companies. I find your stance on business to be very one sided and almost blind to the actual reality of modern day big business.

Respect reciprocated.

I wish I could remember the debate that confirmed this for me. I think it was on hardball a couple years ago (when this issue was really big). Present were a representative of the Canadian Health Service and somebody else. When pressed, this representative essentially admitted this to be the case. I'll try to do some research, but for now I have to get to MNF.

You seem to defend big business every step of the way, yet you know for a fact the economic conditions do not dictate that big business behave in an ethical manner. It is not in their best interest to do so, and they will not unless forced to. You can leverage them by using things like government purchasing power and create contracts which allow a fair profit margin as well as a cheaper price for consumers. Drugs are the one area where this is needed regulation simply because of the nature of the industry.

To me, businesses are amoral actors in the economy. They respond to incentives the same as individuals. In a free economy, these incentives encourage companies to maximize their profit by maximizing their service to their fellow men. In a highly regulated market, these incentives could dictate political donations, lobbying, and even subterfuge. I suppose I could blame companies for engaging in these practices, but I tend to blame the incentives (government) first. Maybe I shouldn't, but there it is.

[JohnLockesGhost]

Nice dodge. You didn't respond to my point.

Companies look to maximize their profit, not recover their costs. You know that.

It is not government interference that causes pharmaceutical companies to charge outrageous amounts for their drugs - it is because they have unique patented products and they will charge whatever they can get to maximize their profits. Like any economic actor in a similar situation.

Right. They don't have a patent for a unique product because it fell from the sky. They paid for it. Often at great risk of failure. I don't remember the exact figure, but the price to bring a drug from the drawing board to the market is around...

600 meel-lion dollars.

[Predicto]

Right. They don't have a patent for a unique product because it fell from the sky. They paid for it. Often at great risk of failure. I don't remember the exact figure, but the price to bring a drug from the drawing board to the market is around...

600 meel-lion dollars.

How does that change anything I am saying? I didn't say pharmaceutical companies shouldn't be able to recover their costs and make nice profits - I said that their pricing structures are not connected to recovering their costs, and are only tied to maximizing their profits.

You are the one who is constantly quoting and applying economic truths. Riddle me this.

A product cost you 600 million dollars to develop. The maximum price you can sell it for in your market is 100 dollars a unit. How much do you charge per unit?

Different product. This product cost you only 50 bucks to develop. The maximum price you can charge for it in your market is 100 dollars per unit. How much do you charge per unit?

The answer to both is 100 dollars per unit. End econ 101 lesson.

[JohnLockesGhost]

How does that change anything I am saying? I didn't say pharmaceutical companies shouldn't be able to recover their costs and make nice profits - I said that their pricing structures are not connected to recovering their costs, and are only tied to maximizing their profits.

You are the one who is constantly quoting and applying economic truths. Riddle me this.

A product cost you 600 million dollars to develop. The maximum price you can sell it for in your market is 100 dollars a unit. How much do you charge per unit?

Different product. This product cost you only 50 bucks to develop. The maximum price you can charge for it in your market is 100 dollars per unit. How much do you charge per unit?

The answer to both is 100 dollars per unit. End econ 101 lesson.

Sure. You're right. But you're the one calling their prices "outrageous" and what-not. My only point is that they have a right to charge whatever they want, because they own it. They paid for its development at great risk. As an economy in general, we WANT people and businesses out there taking risks, innovating and inventing the tools of the future. This gets back to things not seen.

http://www.econlib.org/library/Bastiat/basEss1.html

"Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil."

Sure, we can look at the prices here and abroad and call them outrageous and exploitative, regulate the crap out of them, and it's easy because it's right in our face. People are easily influenced by what they see. However, what we don't see is the effect such action would have on innovation and development. As an educated man, I'd hope you'd see the wisdom in this.

[JohnLockesGhost]

Chomerics, this report is from the Fraser Institute (sort of a Cato of Canada):

http://www.fraserinstitute.ca/shared/readmore.asp?snav=nr&id=711

Are Canadian Internet pharmacies violating US drug patents?

The study also suggests that Canadian-based Internet pharmacies are engaged in a massive theft of US intellectual property by selling drugs to Americans in violation of active US patent rights.

According to Skinner, “No matter what some might think, the cross-border drug trade is not free trade. Free trade is based on respect for property rights.”

Yet the available evidence suggests that Canadian-based Internet pharmacies are profiting from the theft of US intellectual property by selling generic versions of drugs that are still under US patent to American consumers.

“An IMS Health Incorporated analysis shows that nearly half (47 percent) the value of generic products sold through cross-border Internet pharmacies was accounted for by drugs that were not yet available in generic versions in the United States. In almost all cases, these drugs were still under active patent protection in the US,” he said.

“If confirmed by further research, these findings make it highly probable that American patent holders have legal recourse in US courts to stop the cross-border trade,” Skinner continued.

Skinner warned further, “the findings also imply that US politicians promoting the legalization of the cross-border resale drug trade are inadvertently encouraging an enormous theft of US intellectual property.”

[DjTj]

Chomerics, this report is from the Fraser Institute (sort of a Cato of Canada):

http://www.fraserinstitute.ca/shared/readmore.asp?snav=nr&id=711

Are Canadian Internet pharmacies violating US drug patents?

JLG, this only shows that importing Canadian drugs violates US patent laws, which I think everyone should already know. It would probably be an easy lawsuit for the pharmaceutical companies, but I don't think the internet pharmacies are big enough yet to warrant the legal expenses (and the bad PR).

You made the claim that Canada was threatening to take away patents to negotiate lower prices - that is a much more serious claim, and one that would probably violate the Patent Cooperation Treaty, which Canada has signed.

I would be willing to believe that there is a lot of monopolistic behavior going on in the negotiation of drug prices, but you're going to need to produce some real evidence if you're going to claim extortion in the Canadian patent system.

[skinsfan51]

"I will look at the possibilities, but I ... haven't really had the time to talk to people about it," Clinton told a breakfast gathering hosted by the Association for a Better New York. [/color]

SURE she hasn't talked to anyone about it. (wink, wink) :doh:

[chomerics]

Respect reciprocated.

I wish I could remember the debate that confirmed this for me. I think it was on hardball a couple years ago (when this issue was really big). Present were a representative of the Canadian Health Service and somebody else. When pressed, this representative essentially admitted this to be the case. I'll try to do some research, but for now I have to get to MNF.

I read your link posted later, but it does not state what you said previously, that the Canadian government was extorting from the drug companies by threatening to violate the patents of American drug companies. According to the link, internet pharmacies already violate the patent, but there is nothing about the Canadian government. They may be purchasing the drugs from Asia and importing them for all we know, and the pharmaceutical companies have not gone after them. . .yet.

But it still does not address the issue of the Canadian government threatening to extort money from big Pharma in the US, which is an entirely different argument all together.

To me, businesses are amoral actors in the economy. They respond to incentives the same as individuals. In a free economy, these incentives encourage companies to maximize their profit by maximizing their service to their fellow men. In a highly regulated market, these incentives could dictate political donations, lobbying, and even subterfuge. I suppose I could blame companies for engaging in these practices, but I tend to blame the incentives (government) first. Maybe I shouldn't, but there it is.

I understand your point, and I do agree with you on a wide variety of issues in regards to free trade and regulation, but I just think you are giving big business a free pass here. The government should have the legal right to purchase bulk sales of a drug from a pharmaceutical company. They company should not be allowed to charge what ever they want, and force Joe taxpayer to pay for it.

They do have a right to maximize profits, and to also recoup costs, but you ALSO need regulation to insure the consumer is not being abused by monopolistic tendencies of big business. It is a fine line to walk, and there are merits to both arguments. I am definitely a free trade person myself, but in this industry, I lean more on the side of the government then big business because I believe the power is swayed to the side of business right now. If it tilts the other way, I will favor the side of business, but in the current economical climate, and with the current drug laws on the books, the US consumer is getting porked by big pharma IMO. They can charge what ever they want for a drug, and there is no provision to use purchasing power to drive down the costs. It is nowhere near a free market system, and it is regulated on the side of business to give them all the leverage, and eliminates any leverage the consumer or government would have.