Timmy elsewhere

At the ASI.

The strange case of the company who signed up generics manufacturers to make an $84,000 drug.

7 thoughts on “Timmy elsewhere”

  1. “Whether we pay in advance in taxation or later through the price of the patented drug doesn’t make much difference, does it?”

    Well, it might make a difference to the final cost. A state-run drug R&D company wouldn’t need to spend money on marketing: drugs would go straight from producer to consumer with no advertising or sponsorship, just the informed guidance of your trusted family GP.

    Alternatively, a state system would be shockingly bureaucratic, stuffed with cronies, unable to sack incompetents, and always a decade behind the rest of the world.

    Either view would greatly affect both the input (cost) and the output (new drugs). So yes, it does make much difference.

  2. The actual reason is this way they get some royalty. India doesn’t protect western patent medicines that they consider too expensive but do protect ones they consider “fairly” priced. Probably lots of other countries don’t either, whether formally or informally.

    This is just one of many areas where globalization and reality collide. If you charge Indian prices in the west big pharma dies. If you charge western prices in India you can’t sell much. So you have to divide the market up by purchasing power, which runs totally contrary to the principles of globalization but in practice leads to better outcomes in the long run.

    Thing is when you do this, those of us daft enough to work in the west and find our paychecks subject to the predations of Indian undercutting (partly because we charge them a lot less for drugs) wonder why we cannot likewise protect our product with regional pricing. It does look very much like the big boys can deglobalise to protect their revenues, but enforce globalisation on everyone else.

    Personally I’d pick globalisation with total global free trade and the same rules for everyone, big or small. But as a pharma worker I’d be slitting my own throat to advocate it.

  3. tldr: big companies want their customers localised and not competing but their suppliers globalised and competing. By and large they have achieved this. BiG wants globalization _for_ the little guy, whereas currently it’s against the little guy.

  4. BiG, “big companies want their customers localised ”

    I’m wondering if it’s not western countries localising themselves in an effort to maintain wage disparaties. Or should that be purchasing power?

  5. There is no effort on the part of the west to maintain wage disparities, quite the opposite. What intellectual work can go to India is already going there. Fortunately it’s still at a very low level, much of the output is drivel, and thus we can continue to hope that by the time they catch up in terms of quality and ability to work independently, they will also have caught up in terms of salaries.

    Western countries are therefore localising their consumer markets (keeping cheap products/grey imports out) but globalising their labour markets, by raising no tarriffs on things you can email from a low-cost to high-cost place. In what parallel universe can that be considered a level playing field? Wanna undercut my production? Fine, but let me have your rather lower cost of living (cheap drugs in this example) so I can compete.

  6. But keeping cheap products out also means keeping manufacturing jobs in. i.e. supporting overvalued jobs.

    I agree it’s not a level playing field, I’m just not convinced it’s (just) big business segregating fat clients from thin ones.

  7. I guess its a services vs. other sectors thing then. In the “things that can be dropped on feet” sector labour is visible, vocal, and perhaps therefore has a bit more of an edge against capital (politically) than in the “virtual products” sector.

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