[e-drug] Can we standardise the pharmaceuticals' mark-up on cost? (7)

[JBRusso@aol.com]

E-DRUG: Can we standardize the pharmaceuticals' mark-up on cost? (7)
--------------------------------------------------------------------

dear E-druggers,

The goal of making essential medicines available to all who need them are admirable, but I believe it would be difficult to standardize on a mark-up on cost formula to determine fair prices for pharmaceuticals. 
 
People who manufacture pharmaceuticals, whether innovators or commodity suppliers, seldom think in terms of cost plus. When a new moiety obviates or shortens hospitalization times, the manufacturer quite reasonably prices it in light of those savings. The cost of the chemicals, the quality controls, distribution and marketing costs, etc are factored in, but so are the savings the drug offers. Similarly, when that drug's patent expires, generic manufacturers offer prices irresistibly below the innovator's, but not necessarily near production costs (the substantial profits of many generic suppliers testifies to their skills in that regard). A generic priced at half the innovator brand remains a bargain, even though it is also handsomely profitable for the facsimile manufacturer.
 
In candor, I doubt that attempts to standardize pricing based on cost, however calculated, will be worthwhile. It might be more helpful to improve transparency in pricing across borders and among buyers by simply sharing the data. 
 
Regards

James B. Russo
146 Koenig Rd.
Bernville, PA 19506 
USA
jbrusso@aol.com
610 488 9060 
484 269 7490 (mobile)
510 488 7036 (fax)