Re: A little political humor...

Travelinman wrote:
> In article <1124769095.745649.250280@xxxxxxxxxxxxxxxxxxxxxxxxxxxx>,
> imouttahere@xxxxxxx wrote:
>
> > Travelinman wrote:
> > > Fine. Why don't you explain what expenses they're supposed to cut.
> >
> > The 37% of sales that was booked as SG&A.
>
> Sorry, it doesn't work. A company can't run without SG&A expense.


Of course not. INTC runs at 13% of sales, DELL at 8%. 37% is way, way
out of line.

> Tell us what specifically to cut.

Anybody familiar with how drug companies operate (ie anyone in the
medical profession) knows what should be cut. There is an immense
amount of waste, goldbricking, and borderline fraud in their business
practices. Government-run not-for-profit healthcare services see this
like Canada's and our own VA see this market failure and say, 'we're
not paying for that'.

Clue: they spend 3-4x as much on advertising and distribution than on
litigation/settlements.

> > > Legal? Pretty tough in our judicial system.
> >
> > Legal was $450M for 2004, ~1% of sales. NOT a significant factor. Keep
> > trying.
>
> That's because you're too stupid to understand finance.
>
> They paid 1% of sales (5% of profits) to lawyers. That doesn't include:
> a. The amount of money paid out in silly liability claims

yes it does, from their 10K:

"Other operating expense includes litigation costs and provisions
relating to legal claims on withdrawn products, product
withdrawals, anti-trust matters and claims with respect to sales,
marketing and reimbursement."

So much for your expertness, pal.

> b. The immense amount of money paid out in salaries of employees to
> gather data to defend themselves
> c. The wasted energy spent trying to avoid those claims.
>
> Much of the cost of our legal system is hidden in SG&A.

OK.

> Please learn a little bit about finance before making a fool of yourself.

Please learn how to read a 10K, likewise.

> > > Cost of getting through the ridiculous FDA process?
> >
> > R&D was a piddling 13% of sales, so it can't be that significant.
>
> Idiot.
>
> 13% of sales is 'piddling' and 'can't be that significant'?

Sure. Glaxo's major cost driver is salary, and their headcount
breakdown is 50% sales/marketing/administraation, 30% manufacturing,
and 15% R&D.

> Not to mention, of course, that much fo the cost of FDA compliance is
> not in R&D.

Dubious, since most of the real R&D is happening in academia.

> > Here, again, were the numbers (all big pharma companies put up similar
> > results):
> >
> > > > Glaxo, FY04:
> > > >
> > > > $39B in sales
> > > > $8B in COGS
> > > > $5.5B in R&D (14% of sales)
> > > > $14.6B in SG&A (37% of sales)
> > > > $2.7B in "other" (WTF?)
> > > >
> > > > Net profit: $7.7B (20% of sales)
> > >
> > > I see. So net profit is 20% of sales, but they could cut prices in half
> > > and still make money?
> >
> > You'll note I said:
> >
> > "Big Pharma could cut their prices in half and still make tons of money
> >
> > ***if they didn't blow so much on SG&A and other overheads***."
> >
> > Their $17.3B in non-R&D expenses is where the fat is.
>
> Why don't you explain exactly what can be cut without hurting the
> company?
>
> Of course, since you don't have any business experience, you're not
> really in a position to do that.

GSK's SG&A overheads are way, way out of line with demonstrably
efficient operations like Dell, INTC, and AAPL. Something's rotten in
the state of denmark there.

> > > You really need to learn to do some third grade math.
> >
> > And you obviously really need to learn how to read an income statement,
> > or learn how to read, period.
>
> ROTFLMAO. Pretty good - after you easily demonstrate that you don't have
> a clue what you're talking about.

.

Relevant Pages

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