if 24 % is their profit, it is too much and their
prices are too high. i am not sure if you mean profit
by operating margin. but 6% IS AVERAGE FOR A COMPANY
TO BE ABLE TO GIVE A DIVIDEND.

--- Deri James <deri@ tCHUZZLEWIT.DEMON.CO.UK> wrote:
> On Monday 05 May 2003 9:25 pm, you wrote:
> > well, deri, i was not talking about tyrenol and
> > asperine either. i was staying in a dr.'s house
> when
> > in zamboanga. an yes, people are desperate and
> will do
> > what desperate people will do. i have also saw
> first
> > hand the cost of bringing a drug to market. i am
> not
> > without feelings for the people, at the same time,
> the
> > companies are not shooting b.s. about the cost of
> > research. if i had the answers, i'd probably be
> rich
> > myself. i pointed out some of this so that the
> > discussion would have some facts on both sides.
> there
> > is both sides. to know if the drug companies are
> > making more than 6% of capital and research, then
> they
> > are charging too much. if theyare making less than
> 4%,
> > then they are not doing right by their investor,
> ie:
> > stock holders. 4% will after taxes will not allow
> for
> > a dividen and continued research. i wish we had
> better
> > answers. everyone on this list would be happy if
> it
> > were just simple as "cut the price." it is
> emotional
> > becouse it does affect people and is life and
> death.
> > but, it is also ecconomics. no dividen for long
> enough
> > and you'll not have investers. nor will you get
> the
> > next generation of drugs.
> >
>
> If only. Novartis (who manufacture Glivec) had an
> operating margin of over 24%
> (thats after 17% ploughed into research). When you
> look at drug companies
> annual reports you would be amazed at the profits
> being made, particularly
> the amounts spent on "promotion" (lobbying
> politicians).
>
> My beef with the research argument is that there is
> no regulation over the
> areas in which research is done, so market forces
> mean that research will
> gear towards that which will make the company most
> profit. We may have 8 drug
> companies developing the next "bigger & better"
> Viagra, but how many are
> prioritising research into diseases which are only
> endemic in poor 3rd world
> countries.
>
> I fear that drug companies will be side tracked into
> lucrative social
> recreation drugs aimed at rich western society's
> rather than trying to cure
> real diseases. (I.E. if a drug company invented a
> pill which temporarily
> increased IQ by 20 points and charged $50 a pop, how
> many middle class
> western students would take it before exams). Very
> lucrative.
>
> Cheers
>
> Deri


__________________________________
Do you Yahoo!?
The New Yahoo! Search - Faster. Easier. Bingo.
http://search.yahoo.com