Re: OFF TOPIC! FYI

Fred Burton wrote:
"X-rated Vermonter" <k1xvnospam@xxxxxxxx> wrote in message news:h27sg3td6m0nhud7a8oakjj4cq0shrgce2@xxxxxxxxxx
Fred, because you do not favor government involvement in health care,
you cannot understand that the Canadian government has stewardship
over this activity, and in that stewardship, legitimately makes
efforts to control costs.

All government expenditures of all kinds are, in fact, expenditures on
behalf of the public it serves. Under your theory, government should
only pay prices demanded with no negotiation whatsoever. This is
nutty. People negotiate every day over prices to be paid for patented
products. Get real.

Concerning legal precedent, while USA precedents are not binding on
Canadian courts, we have a common root in the British legal system,
including concepts of property ownership. Since you are unwilling to
broaden your horizons by looking at how courts have dealt with state
efforts to regulate prices of monopoly goods or services, it is
obvious you are unwilling to deal with accepted legal principles that
show your beliefs are well outside the mainstream.

I hope you never are in a position where you must pay thousands per
month for some prescription where the same drug is sold overseas for
far less.


The Canadian government did NOT negotiate drug prices. It TOLD
the drug companies that they would pay X or the Canadian government
would take their patents... PERIOD.

My beliefs are NOT outside the mainstream. It's liberal morons and
their spineless, supposedly "moderate" lackeys who are outside the
mainstream of sanity.

So-called "legal precedents" that are not in keeping with the strict letter
of the US Constitution mean less to me than a used *** of toilet paper.

For your information, you were wrong about the government 'taking' their patents or whatever it was you said (I forget). The Canadian government, in fact, *established* patent protection for the pharmaceutical industry. Up until changing the laws, other manufacturers could make/sell any drug and pay a royalty to the originating manufacturer.

Here's something from an AARP study (I'm including the link because I'm merely splicing bits from it).

Link: http://assets.aarp.org/rgcenter/health/ib62_can_rx.pdf

Excerpts:

POSSIBLE EXPLANATIONS OF PRICE DIFFERENCES

Prescription drug price differences between Canada and the United States
can largely be attributed to two major differences between the U.S. and
Canadian pharmaceutical markets. First, Canada’s federal PMPRB regulates the maximum prices that can be charged for patented drugs; no such regulations exist in the United States. Second, public and private third-party purchasers in Canada, particularly the provincial drug benefit plans, have adopted cost management approaches to try to induce price competition among therapeutically similar drugs. These may not be the only factors affecting prescription drug price differences. Some research has suggested that country differences in the standard of living and spending on direct-to-consumer drug advertising and medical liability may also contribute to price differences.

National Price Controls on Patented Drugs

All patented prescription drugs sold in Canada are subject to a set of pricing guidelines established in law and administered by the PMPRB. The
PMPRB is a quasi-judicial body that regulates the price that a manufacturer can charge for any patented drug sold in Canada; it does so by determining maximum levels for introductory prices of new patented drugs and increases in the prices of extant drugs. The PMPRB’s jurisdiction includes patented drugs sold by manufacturers to Canadian hospitals, wholesalers, retail pharmacies, and others.

The PMPRB was established in 1987 to complement and counter a change in
Canadian law that strengthened patent protection on pharmaceutical products by providing greater market exclusivity.

*For the 18 years before the establishment of the PMPRB, patented pharmaceutical products sold in Canada had virtually no right of market exclusivity.

(THIS IS THE PART THAT DISCUSSES YOUR STATEMENT ABOUT THE CANADIAN GOVERNMENT 'THREATENING' THE PHARMACEUTICAL INDUSTRY. . .)

During that period, Canadian public policy was to foster drug price competition by allowing generic manufacturers to obtain a license from the Commissioner of Patents to sell versions of patented drugs. Manufacturers that were selling generic versions of patented products
were required to pay a royalty to the patent holder while the patent was in force; this royalty was viewed as nominal relative to revenues that the generic manufacturer would earn. This market dynamic was dramatically altered when, in order to address concerns about discouraging pharmaceutical R&D in Canada, Parliament passed a law that introduced a seven- or ten-year period of market exclusivity during which generic drugs could not enter the market. (In return, Canadian drug manufacturers pledged to double the ratio of pharmaceutical R&D
spending to sales in Canada over the period from 1987 to 1996. This ratio rose from 6.1 percent of sales in 1988 to 11.7 percent by 1995, but dropped to 9.9 percent in 2001.45) To address concerns
among provincial health plans and private payers that market exclusivity
would lead to substantial increases in prices for patented drugs, the law also established the PMPRB and gave it authority to take certain measures to keep patent drug prices from becoming “excessive.”

Cost Management Approaches of Public and Private Drug Benefit Plans

In addition to the PMPRB’s regulation of patented drug prices, third-party payers, particularly the provincial drug benefit plans, have applied cost management approaches that are intended to further restrain prescription drug costs. As large purchasers, these payers use cost management tools to enhance their ability to negotiate with drug manufacturers and pharmacies about the terms under which their plans
will cover and reimburse drug products.

The approaches they use can lead to patented drug prices that are below the maximum allowable prices set by the PMPRB and can promote the use of less costly versions of therapeutically similar drugs.51 Many of these approaches are developed by the provincial drug plans; some private insurers simply adopt policies and prices negotiated by the provincial plans (unlike in the U.S. Medicaid program, net drug prices paid by the provincial plans are not considered to be proprietary and are, therefore, available to the public).

Among the tools used by these provincial drug benefit plans to reduce
prices are the following:

Use of price information to determine formulary inclusion.
Each province has a formulary, or list of drugs that are covered under
its plan.

• The drugs on the formulary vary among the
provinces. A plan’s ability to exclude a drug from the formulary
or to require prior authorization (the granting of special approval
before a prescription will be reimbursed for a particular
individual in a given situation) may give drug manufacturers incentives
to set their prices at a level that makes it financially attractive for
plans to include the products in their formularies.

• Use of cost-effectiveness evaluation to determine formulary inclusion. Ontario’s drug benefit program applies pharmacoeconomic evidence of a
drug’s cost-effectiveness to determine its placement on the
provincial formulary. Drug manufacturers seeking to have a product included on the provincial drug benefit formulary must complete a submission to the Ontario Ministry of Health and Long-Term Care that describes the drug’s clinical effectiveness and cost-effectiveness. An independent Pharmacy and Therapeutics Committee of physicians and
pharmacists reviews these submissions and makes recommendations about coverage.

(There's more here if you're interested)

******

Other Possible Causes for Price Differences

Several other reasons have been suggested as contributors to U.S.-Canada
drug price differentials:

• Differences in standards of living.

Danzon (1999) and Graham (2000) have suggested that Canada’s
relatively lower prices for patented drugs might be partly explained by
lower income and declining gross domestic product per capita compared to the United States.59,60 The theory is that, as a result of differences in the responsiveness of demand to product price in each country, the manufacturer can maximize its profits by engaging in “price discrimination”—that is, selling the product in different markets at different prices.

According to this reasoning, the higher average income level in the United States may mean that Americans are less price sensitive than Canadians, thereby allowing pharmaceutical manufacturers to charge higher prices in the United States than they do in Canada. This theory, however, is not consistent with the greater level of insurance coverage in Canada, particularly among elderly persons, who are most likely to need prescription drugs. The lack of insurance for prescription drugs
among older U.S. residents is usually thought to make them more sensitive to prescription drug prices, despite higher relative
incomes in the United States.

• Direct-to-consumer advertising.

Canada does not allow direct-to-consumer (DTC) advertising of prescription medicines. By comparison, spending on DTC drug advertising in the United States has grown rapidly, from $55.3 million in 1991 to $2.8 billion in 2001. The top 50 drugs with the most DTC advertising spending in 2000 were responsible for nearly half of the $20.8 billion increase in U.S. retail prescription drug spending from 1999 to 2000. 61 At a minimum, advertising affects total spending on prescription drugs by increasing consumers’ demand. In addition, some believe that the cost of advertising contributes to the fixed costs that a business takes into
consideration when establishing prices.

While there have been efforts to allow DTC drug advertising in Canada, the Minister of Health recently stated that the government has no intention of changing the current policy.62 However, Canadians are increasingly exposed to cross-border advertising of prescription drugs, indirect and disease-oriented advertising originating in Canada, and drug ads on the Internet.



That's it, Fred. The first part speaks directly to your statement that the Canadian government 'blackmailed' the pharmaceutical industry; the other reference some of the differences.

Earlier in the study I found, they discuss the differences in drug prices in Canada/US in various ways. You might find it enlightening, or not.


mario in victoria
--
hope you read it.
go sox.
.

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