3 ms·
Maybe the market in the US isn't big enough to recover the fixed costs. How many pills at 4 cents would they have to sell?
by edko 9y ago
Maybe the market in the US isn't big enough to recover the fixed costs. How many pills at 4 cents would they have to sell?
- harryh 9y agoYes, it definitely could be this which is why I said "my gut suspects the arduous FDA approval process." This could be the source of a lot of that fixed cost. I'd be generally curious to see data on what is involved in starting up a new production line for these kinds of pills. Is there a chemist in the house? :)
- gizmo 9y agohttps://dailyreckoning.com/generic-bioequivalence-and-outrageous-profits-in-biotech/ https://dailyreckoning.com/generic-bioequivalence-and-outrag... Look for the explanation by Derek Lowe in the linked article. Key points: > The FDA grants market exclusivity to companies that are willing to take ‘grandfathered’ compounds into compliance with their current regulatory framework.” Once a company does that, it gains an effective monopoly through the "generic bioequivalence" rules. Setting up the production line isn't the issue, because the pharmaceutical company will outsource the actual manufacturing of the drugs anyway.
- Symmetry 9y agoIf fixed prices inherent to the production of the drug were the key then I wouldn't expect a manufacturer would be able to provide this same drug in the UK for $2 without going out of business. Now, there are probably reasonable health and safety procedures done in the UK but not in Tanzania that bump the price up that much which I want done to my drugs as a wealthy resident of the first world but which I might not be able to afford if I were a Tanzanian. But $400 is clearly not required to make the drug up to reasonable safety standards.