Drug Pricing, What Kind of Fools Are We?

That we are suckers and fools when it comes to pricing of drugs is evident from the fact that we pay much more for drugs than any other place in the world.  It make no difference  if the drug was researched and developed here or overseas, we pay more, much more.

Check our this from Bloomberg:

In the years since 2007:

The average quarterly earnings growth for drugmakers was 10 percent since the first quarter of 2007.

But there are problems with generics:

Pfizer, Merck & Co. and Bristol Myers Squibb Co. are eliminating jobs, cutting costs and shedding business units to prepare for patent expirations. In 2011, drugmakers face generic rivals to products with $34 billion in yearly sales, a figure 34 percent higher than last year. Sales at risk from patent losses will swell to $147 billion by 2015,

But, price increases have the potential to ease the pain:

Most U.S. revenue growth in the pharmaceutical industry will come from price increases after some drug costs were raised more than 10 percent, Bernstein’s Anderson wrote in an April 12 note. Pricing outside the U.S. probably declined after cost reductions were implemented last year in at least 10 European countries, he said. (Emphasis by medicynic)

Medicynical Note:  What’s impressive is the fact that health reform is already having some effect on pricing and that the industry expects the effect of the reform to be lower prices, and lower profits.  It’s about time.

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