CR The pharmaceutical industry argues

[soundok]

The pharmaceutical industry argues that because new drugs will not be developed unless heavy development costs can be recouped in later sales, the current 20 years of protection provided by patents should be extended in the case of newly developed drugs. However, in other industries new-product development continues despite high development costs, a fact that indicates that the extension is unnecessary.

Which of the following, if true, most strongly supports the pharmaceutical industry's argument against the challenge made above?

(A) No industries other than the pharmaceutical industry have asked for an extension of the 20-year limit on patent protection.
(B) Clinical trials of new drugs, which occur after the patent is granted and before the new drug can be marketed, often now take as long as 10 years to complete.
(C) There are several industries in which the ratio of research and development costs to revenues is higher than it is in the pharmaceutical industry.
(D) An existing patent for a drug does not legally prevent pharmaceutical companies from bringing to market alternative drugs, provided they are sufficiently dissimilar to the patented drug.
(E) Much recent industrial innovation has occurred in products---for example, in the computer and electronics industries---for which patent protection is often very ineffective.

Ans: B
Even though I chose the right answer, I am still confused about the B.

With B, we know there is another 10 years left ( before patent is granted + after drug is marketed). It means development cost COULD BE recouped in later sales ( probably 4 or 5 years sales). So, it also weakens the argument that the protection should be extended.

Could you explain?

[RonPurewal]

It means development cost COULD BE recouped in later sales ( probably 4 or 5 years sales).

whoa, whoa there. you should know better than this.

you can't introduce some random hypothetical consideration, which may or may not be true (and has ZERO explicit evidence in the passage), and then try to criticize it as if it were a necessary part of the argument!

you should know better than this.
making ANY unwarranted assumptions on CR is disastrous - let alone using those unwarranted assumptions as the basis for further reasoning.
(this is one form of a common logical fallacy called ignoratio elenchi, if you're interested in such things.)

if you still don't see the problem with your reasoning, consider the following:
* "the pharmaceutical industry COULD also recoup its development costs due to the munificent actions of little green men who descend from mars with cashier's checks covering those costs. therefore, the argument is weakened."
this is of course patently (heh) ridiculous, but it has no more - and no less - basis in reality than does your statement about recouping costs in 4-5 years. i just made it up completely at random, and then used it as the basis for my counter-argument, as did you.
you can't do this.

--

in (b), the only thing that we know FOR SURE is that the 20-year patent term is effectively only 10 years long, because the companies can't make any profits off their products until after the conclusion of the clinical trial period.

this fact, which means that the patent period is effectively half as long as it's supposed to be, would clearly strengthen the industry's argument for an extension of the patent period.

[manya.saksena]

It means development cost COULD BE recouped in later sales ( probably 4 or 5 years sales).

whoa, whoa there. you should know better than this.

you can't introduce some random hypothetical consideration, which may or may not be true (and has ZERO explicit evidence in the passage), and then try to criticize it as if it were a necessary part of the argument!

you should know better than this.
making ANY unwarranted assumptions on CR is disastrous - let alone using those unwarranted assumptions as the basis for further reasoning.
(this is one form of a common logical fallacy called ignoratio elenchi, if you're interested in such things.)

if you still don't see the problem with your reasoning, consider the following:
* "the pharmaceutical industry COULD also recoup its development costs due to the munificent actions of little green men who descend from mars with cashier's checks covering those costs. therefore, the argument is weakened."
this is of course patently (heh) ridiculous, but it has no more - and no less - basis in reality than does your statement about recouping costs in 4-5 years. i just made it up completely at random, and then used it as the basis for my counter-argument, as did you.
you can't do this.

--

in (b), the only thing that we know FOR SURE is that the 20-year patent term is effectively only 10 years long, because the companies can't make any profits off their products until after the conclusion of the clinical trial period.

this fact, which means that the patent period is effectively half as long as it's supposed to be, would clearly strengthen the industry's argument for an extension of the patent period.

can you please explain why option C is wrong here ?

[RonPurewal]

can you please explain why option C is wrong here ?

option (c) goes the wrong way.

if "There are several industries in which the ratio of research and development costs to revenues is higher than it is in the pharmaceutical industry", then that consideration works against the pharmaceutical industry, which is trying to claim that the cost of R&D is prohibitively high relative to revenues.

in problems like this, with arguments + counter-arguments, one of the principal challenges is remembering who is on which side of the argument. don't get lost!

[manya.saksena]

can you please explain why option C is wrong here ?

option (c) goes the wrong way.

if "There are several industries in which the ratio of research and development costs to revenues is higher than it is in the pharmaceutical industry", then that consideration works against the pharmaceutical industry, which is trying to claim that the cost of R&D is prohibitively high relative to revenues.

in problems like this, with arguments + counter-arguments, one of the principal challenges is remembering who is on which side of the argument. don't get lost!

Do you mean that since there are several industries which are surviving despite of the high ratio, the claim of pharmaceutical industries (to extend the patent period) seems weak ?

[jnelson0612]

can you please explain why option C is wrong here ?

option (c) goes the wrong way.

if "There are several industries in which the ratio of research and development costs to revenues is higher than it is in the pharmaceutical industry", then that consideration works against the pharmaceutical industry, which is trying to claim that the cost of R&D is prohibitively high relative to revenues.

in problems like this, with arguments + counter-arguments, one of the principal challenges is remembering who is on which side of the argument. don't get lost!

Do you mean that since there are several industries which are surviving despite of the high ratio, the claim of pharmaceutical industries (to extend the patent period) seems weak ?

Yes, good job manya. It hurts the idea that the pharmaceutical industry needs special provisions because of the high cost of R&D compared to revenues.

[karanrob]

Hi Ron, question for you (with due respect- I might be wrong).

Where in the question stem is it mentioned that the other industries receive 20 years of patent protection as the Pharma companies do??

What if they receive 10??

The question says however in other industries - !!

[RonPurewal]

Hi Ron, question for you (with due respect- I might be wrong).

Where in the question stem is it mentioned that the other industries receive 20 years of patent protection as the Pharma companies do??

What if they receive 10??

The question says however in other industries - !!

i see your point, but this issue would have no effect on the outcome of the question. anything that currently strengthens the pharmaceutical industry's argument would still strengthen that argument, even if there were different patent terms.

(by the way, the wording of choice (a) shows that we're assuming a 20-year term across the board.)

[naseem.usama]

Apologies for bumping an old thread.

Ron,

Can you explain why is E wrong?

The contrast with innovation in other industries helps serve the notion that innovation in pharma industry is different and should not be subjected to the same type of rules & regulations.

Regards

[RonPurewal]

(E) conveys the idea that patent protection is unnecessary for innovation to occur. That works against what the pharma people are saying.

Analogy:
"I want to get into top schools. Therefore, I should hire an admissions consultant."
Choice E is like saying "Lots of my friends have gotten into top schools without an admissions consultant." That would be evidence against the idea that I need one.

[gmatkiller_24]

is it an argument based on the analogy?


the more similar between pharmaceutical industry and computer industry, the more powerful the challenge.

the more dissimilar between pharmaceutical industry and computer industry, the more powerful the pharmaceutical industry's argument.

[RonPurewal]

the passage doesn't mention the computer industry, so i don't understand what you're trying to ask.

[gmatkiller_24]

is it an argument based on the analogy?


the more similar between pharmaceutical industry and computer industry, the more powerful the challenge.

the more dissimilar between pharmaceutical industry and computer industry, the more powerful the pharmaceutical industry's argument.

sorry for making mistakes

the computer industry should be " other industries"

[RonPurewal]

that's basically the idea, but ... too many words for ron. (you could capture all of that by saying "the pharma industry relies on being different/unique.")

[750plus]

can you please explain why option C is wrong here ?

option (c) goes the wrong way.

if "There are several industries in which the ratio of research and development costs to revenues is higher than it is in the pharmaceutical industry", then that consideration works against the pharmaceutical industry, which is trying to claim that the cost of R&D is prohibitively high relative to revenues.

in problems like this, with arguments + counter-arguments, one of the principal challenges is remembering who is on which side of the argument. don't get lost!

Team,

I want to understand C in detail

Option C: There are several industries in which the ratio of research and development costs to revenues is higher than it is in the pharmaceutical industry.

I can write it as

For Other Industries
R & D / Revenues = 10/100, i.e. for every $100 of revenue it generates, $10 is invested on R & D

For Pharma Industry
R & D / Revenues = 1/100 i.e. for every $100 of revenue it generates , $1 is invested in R & D

The argument stem says
The pharmaceutical industry argues that because new drugs will not be developed unless heavy development costs can be recouped in later sales, the current 20 years of protection provided by patents should be extended in the case of newly developed drugs.

==============

Here the Pharma industry cites heavy development costs, but according to the answer option it is low when compared to other industries. Therefore, it is going against them.

Is my reasoning correct.

Warm Regards
Rajat Gugnani