G98:
Being part of one of the "evil" drug companies, do you know if people in your company sometimes speculate on what would happen if your company simply chose to not do business in countries where it is not profitable to do so?
For example: Your company creates drug "X" in a US based R&D lab. From inception to FDA approval, it takes 10 years and 75 million dollars to accomplish this feat. Production cost per pill is $0.10 now that the R&D is completed, but you have a $75 million deficit before it makes financial sense for your company to exist, so you decide to resell the drug to pharmacies at $0.50 per pill, and the pharmacy sells it to the end user at $1 per pill.
The number of medically affected people who need "X" (or any targeted new prescription) isn't very high, but "X" has a respectable target audience. Let's say there are 500,000 people in the US diagnosed with that condition, and 3 million total in western countries. "X" is to be prescribed daily, indefinitely.
If half of those 500k take "X" then you have 250k * 365 pills sold per year. That's a gross revenue of $45.6 million in the US market once half of all diagnosed patients are on your prescription. Net revenue (subtract $0.10 per pill) is closer to $36 million.
Now... to sell abroad to price-controlled medical economies, you can only sell the pills to pharmacies at $0.15 per pill. Revenue to that remaining 2.5 million non-US market would be a gross of 13.7 million with a pill manufacturing cost of about 9.1 million, for a net around 4.5 million. That 4.5 million would probably be consumed in dealing with the myriad of international laws involved, since your 2.5 million target user base is spread out among 20 different countries. Remember, your $0.10 per pill is just for domestic production costs and does not include the legal wranglings involved in international trade.
Is it even "worth" it to manufacture for the foreign market, in comparison to the investment involved of deliberately withholding the product for several years to try and change legislation in those countries?
Are there US-based laws that would prohibit such an action? What recourse would another country have against a US-based pharmaceutical that simply decided to shut down operations elsewhere?
Is the foreign drug market that bad yet, or is it merely not as good as the US?