Post by firstname.lastname@example.org Post by Quadibloc
This isn't dishonest accounting, it's market segmentation.
Market segmentation sounds like dishonest accounting to me. Or like stealing from the consumer because he doesn't have any option other than to buy your product Is Market segmentation the same term used by the media producers to justify the zoning of DVDs to force people to buy locally made discs at the locally inflated prices?
Market segmentation has a lot to do with boundaries, political, legal, social
and economic. DVD region codes were a recognition of one of those...the
boundaries formed by film distribution rights and patterns.
When a manufacturer prices something, they have a lot of different
ways they can come up with their cost to produce it. The simplest (and lowest)
is to try and add up their cost in materials, labor, market-specific
regulatory, administrative and sales expenditures, etc. That pays for making
and selling the product, but not for the cost of developing it and not for the
costs expended on all of the research that didn't result in a product. Market
segmentation lets them use a pricing model that "works" for the target market.
Using the pricing model from the US would result in huge increases in other
markets. The US pricing model is especially extreme. AFAICT it essentially
adds all of the costs that they didn't include in any other market, then it
adds a huge markup on the assumption that they're going to apply a big discount
when they negotiate with insurers. This means that anyone who has to pay retail
(i.e. the roughly 9% who have no insurance) gets slammed, assuming they can't
(or don't know how to) find a discount program.
Post by email@example.com
Also, isn't most of the REAL research into new drugs done by government labs and universities, primarily because the money-grubbing bastards in charge of multi-national drug companies don't want to be involved in billion dollar, multi-year projects that might end up not going to market for some tricky reason like life-threatening side effects in a small percentage of consumers.
The short answer is "no".
The US government spends about $39 billion on medical research via the National
Institutes of Health while the US pharmaceutical industry spends about
$71 billion. Industry does include some items that are only somewhat related
to research (like regulatory costs during the approval process), but government
sponsored research includes things that aren't really related to medicines
(i.e. $7 billion on behavioral and social science).
The pharmaceutical industry typically spends more as a percentage of revenue
on R&D than any other industry except semiconductors*.
The real difference is that industry spends on research that is likely to
result in products they can sell while governments aren't so limited. This is
why, for example, cancer gets a huge investment by industry and tropical
Universities (or rather research groups within universities) tend to do
research more than pay for it. I was in engineering, not medicine, but
researchers were typically supported by government or industry grants, not by
the university itself. For instance, petroleum engineering research and the
PE faculty positions themselves were primarily sponsored by the oil industry.
Medicine probably has a lot of charitable grants as well, engineering not so
OTOH, the government tends to pay for research more than it engages in research
(roughly 80:20 in the US).
There are, of course, exceptions. I know that there are some government
research institutes and there are also some universities than run research
as a profit center (generally via patent licensing).
My completely unsupported suspicion is that a lot of industry money goes to
universities for basic research and the companies use the results to decide
where to concentrate their real effort (and expenditure). Given the $billions
it takes to get a drug into production they'd probably prefer letting the
universities, with their cheap disposable graduate students, do the first pass.
Robert K. Shull Email: rkshull at rosettacon dot com