11/30/2005

Drug companies charities

Drug companies are giving to their favorite charities to help the poor cover the costs of prescriptions. A Wall Street Journal article explains that this system keeps people insured and keeps the insurance companies paying for most of the costs. Is this solely for helping the underinsured or is it good business and a tax shelter to keep the money circulating back to where it started from? Some say that this is to protect the high priced drugs that they’re selling, but I think it’s good business and a win-win situation for both parties. They are aiding the less fortunate with the high costs of prescription drugs and providing good publicity for charities which literally comes back to them four or more fold.

2 comments:

Dr. Tufte said...

-1 on Frank's comment - since this could have been included in the post (for which you did get credit).

This is a shoe-leather cost, and it is a bad sign.

Shoe-leather costs is the name given to the costs of inflation. Inflation makes people do things they wouldn't otherwise - like run around trying to spend their money before it loses value (and literally wearing out their shoes).

Shoe-leather costs are a sign that people are doing dumb things to avoid other costs. That sure sounds like this case to me - they're probably afraid of regulators.

Dr. Tufte said...

-1 on Blake's comment for a spelling error.

Other than that, i think this is a reasonable and commendable position.