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The cost of drug research and development is staggering.

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Current Student
Joined: 29 Jan 2005
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The cost of drug research and development is staggering. [#permalink]

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22 Nov 2005, 10:34
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The cost of drug research and development is staggering. Drug companies have recently argued that this is a good reason to lengthen the patent on new drugs and disallow the importation of drugs from Canada. But some senior citizens advocate groups have argued that the high cost of research and development is a good reason to allow generic and, perhaps, imported drugs to benefit those with fixed incomes.

Which statement, if true, best resolves this seeming paradox?

(A) The advocate groups are aware that drugs from Canada are poorly regulated and may be dangerous.
(B) The cost of medical care has increased greatly in recent years.
(C) Drug companies invest very little money in research and development.
(D) It is common knowledge that drug companies will not pay for extensive research programs if they do not anticipate any a return on their investment.
(E) The advocate groups also claim the high costs of research should be supported by government grants.

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Senior Manager
Joined: 22 Nov 2005
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22 Nov 2005, 11:19
I think it's E

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SVP
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22 Nov 2005, 13:08
I think it is D.
_________________

hey ya......

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Senior Manager
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22 Nov 2005, 13:58
D here

All other choices are out of scope or dont make sense to the stimulus

GMATT73 wrote:
The cost of drug research and development is staggering. Drug companies have recently argued that this is a good reason to lengthen the patent on new drugs and disallow the importation of drugs from Canada. But some senior citizens advocate groups have argued that the high cost of research and development is a good reason to allow generic and, perhaps, imported drugs to benefit those with fixed incomes.

Which statement, if true, best resolves this seeming paradox?

(A) The advocate groups are aware that drugs from Canada are poorly regulated and may be dangerous.
(B) The cost of medical care has increased greatly in recent years.
(C) Drug companies invest very little money in research and development.
(D) It is common knowledge that drug companies will not pay for extensive research programs if they do not anticipate any a return on their investment.
(E) The advocate groups also claim the high costs of research should be supported by government grants.

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Senior Manager
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22 Nov 2005, 14:21
Argument deals withe cost for companies and cost for old folks.

D presents the info to clarify the points.

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GMAT Club Legend
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22 Nov 2005, 21:44
I go with D. If there are imported drugs (and generic ones) competing for a market share with the ones currently in research and development, then the drug companies will not see a reason to invest in the proram.

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VP
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22 Nov 2005, 22:34
I will go with D

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VP
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22 Nov 2005, 22:35
I will go with D

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Current Student
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23 Nov 2005, 00:02
The answer is not D gang. Any other guesses? According to the source, this is a V42 level CR, so let`s wait for some more guesses before posting the OA/OE.

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Director
Joined: 15 Aug 2005
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23 Nov 2005, 00:10
E clearly resolves the paradox.

problem1 - drug companies want a ban on generic drugs because they want to recoup their expenses. They are not bothered about the old folks.

problem2 - the old chaps want generics because they cannot afford the drug company drugs as they are expensive.

The solution is E!
As per E, the government pays the research grants for the drug companies. This solves both problem 1 and 2.
Govt grants eases the pressure on drug companeis to recoup their investment. So they wont press for a ban on generics.
As companies wont insist on ban on generics, the old folks are also happy.
_________________

Cheers, Rahul.

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GMAT Club Legend
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23 Nov 2005, 00:15
ah !! mis-read the question as one that explains the paradox instead of a choice that resolves the paradox..

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Current Student
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23 Nov 2005, 00:18
Yep, Rahul got it!

OA is E.

OE:

Step 1: ID Question Type and Task
A question that contains an apparent contradiction indicates a Paradox Question.

Step 2: Read the Argument and Extract Necessary Information:
The necessary information is the paradox, identify the paradox and pose it to yourself as a question.

Paradox: What would explain why the seniors group cites the high costs of R&D for their position, when the drug companies use the same reason for the opposite position?

Step 3: Formulate an Answer to the Question
Formulate a resolution to the paradox (if possible).

Remember, the best answer provides a connection between the two sides of the paradox without changing or discounting either side.

Step 4: Eliminate Answer Choices:

(A) Eliminate. This exacerbates the paradox by giving reason why the seniors group would want the same thing as the drug companies.

(B) Eliminate. This does not deal with the paradox (which is drug costs, not medical care costs).

(C) Eliminate. This is contradictory to the prompt.

(D) Eliminate. This is irrelevant to the disagreement.

(E) Keep. This would explain why the seniors group cited the same reasons as the drug companies, since they expect the slack from cheaper drugs to be picked up by the federal government.

Step 5: Identify differences in remaining choices

(E) is the only remaining choice and is the correct answer.

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23 Nov 2005, 00:18
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The cost of drug research and development is staggering.

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