>The consistency of the drug companies suggests that they've got quite a lock
>on future cash flows.
Yeah, I thought Ted Byfield's skepticism about drug profits was overdone, and still do, but then I started wondering - how can any industrial sector so consistently earn a rate of profit so far above average? While it's hard to imagine Merck ending up like Bethlehem Steel, how can the continue to pull down these megabucks? Drug prices are substantially lower in Europe, where they're negotiated by national health authorities, than they are in the U.S., right? So are the keys to the industry's megaprofits the absence of regulation in the U.S. combined with strict controls on intellectual property? Or does the industry get some "life itself" exemption from the laws of profit equalization?
Doug