PhRMA president pleads with Obama to rethink Obamacare

[cinephile]

LOL! I knew it was only a matter of time before scumbucket big pharma lobbying group PhRMA came out swinging over Obamacare. PhRMA president John Castellani did just that in a Washington Times article (linked below).

 

It really is too bad to read the tenor of the comments; it's just the same partisan BS ("Obama's an idiot. He doesn't know how to create jobs. This will cause the price of healthcare to go up" etc etc). Now, I'm not exactly a big believer in Obama (or Obamacare for that matter), but in this case, I think partisan nonsense is just a smokescreen. It's really about Pharma greed and lobbying control here, and every American's health is at stake if we can't see through partisan crap and see the big picture.

 

Now, let's see. Time to take a big dump on some of the points:

 

The [pharmaceutical] industry is especially fuming over Mr. Obama's push to reduce the length of time a company can produce biologic drugs exclusively by paring the patent protection time frame from 12 years down to seven.

This doesn't even need an explanation. Gee, why do you think they're fuming over this? Hint: no patent=no pharma profit.

 

But the pharmaceutical industry argues that companies need 12 years to recoup the costs of researching, developing and getting medicines approved by the FDA. Getting one new drug from the lab to patients costs between $1 billion and $1.3 billion and takes an average of 10 to 12 years, Mr. Castellani said.

 

"You can't go and say to a small, innovative biopharmaceutical company that is depending on venture-capital funding, 'Go out there and do everything you can to develop this next generation of medicines, and by the way, you won't have nearly the amount of time you'll get to recover the incredible cost,'" he said. "That's partly why you see the venture capital drying up."

Well shoot. 12 years to recoup costs of researching? Did you say RESEARCH John? Guess what the cost of developing a me-too drug is (which flood the market)? A pittance, since only a few molecules need to be tweaked. And what about those "twofer" drugs like Serafem which was merely rebranded Prozac and extended the patent and the company's profits? What was the research cost on that one, John? Try ZERO. Or what about the research costs for more rebrands like Cymbalta for low-back pain (lol!) or diabetic neuropathy (stop it! You're killing me!)? Another ZERO.

 

So what costs really need to be recouped? Oh yeah: THE ADVERTISING COSTS, which absolutely KILL the amount paid in R&D. In fact, some estimates put the advertising costs at DOUBLE the R&D costs. And what's that you say about research costs? It costs $1bn for 12 years of research? And HOW MUCH does an average pharmaceutical company make in a single year? Oh yeah: BILLIONS. Hell, Pfizer's Lipitor alone brought in over $2.5bn in the 3rd quarter of 2010, and Pfizer made $67 billion total in 2010. Let's do a little math: if a drug takes 11 years to develop at a cost of $1bn, that comes out to about a total yearly cost of $90million to develop the drug. So that's a $90 million yearly cost out of a $67 billion yearly profit for a new drug. Not too shabby a profit margin in my opinion. And even smaller drug companies like Forest Labs reported a 53% increase in net income in the third quarter of 2010. Pretty nifty trick in this heinous economy.

 

And just to make everything crystal clear, check out this graph of the profit margin for Risperdal, an antipsychotic medication manufactured by Johnson and Johnson. Pay close attention to how big the profit is compared to the research cost, and also how the profits went off a cliff once patent exclusivity was lost. Still wondering why PhRMA is "fuming" over losing patent exclusivity after only 7 years?

 

 

I've got the world's smallest violin playing for you, John.

 

LINK: http://www.washingtontimes.com/news/2011/sep/27/curtailing-patents-will-cripple-rd-on-pharmaceutic/

[Altostrata]

Right, everyone knows pharma's profit margins are HUGE and they spend much more on promotion than research.

 

Thanks for adding that excellent chart, cine.

[summer]

"In fact, some estimates put the advertising costs at DOUBLE the R&D costs. And what's that you say about research costs? It costs $1bn for 12 years of research? And HOW MUCH does an average pharmaceutical company make in a single year? Oh yeah: BILLIONS. Hell, Pfizer's Lipitor alone brought in over $2.5bn in the 3rd quarter of 2010, and Pfizer made $67 billion total in 2010. Let's do a little math: if a drug takes 11 years to develop at a cost of $1bn, that comes out to about a total yearly cost of $90million to develop the drug. So that's a $90 million yearly cost out of a $67 billion yearly profit for a new drug. Not too shabby a profit margin in my opinion. And even smaller drug companies like Forest Labs reported a 53% increase in net income in the third quarter of 2010. Pretty nifty trick in this heinous economy."

 

Omg... bleeding for them!

[cinephile]

THIS JUST IN: PhRMA has just leaked a photo of the REAL John Castellani: