A reader comments on the pharma business model:
I’m glad you said he mischaracterized their pricing model, because the line “These drugs are priced to recover their R&D costs based on the number of patients who are likely to use them” is just a fantasy story sold to the public and politicians to enable huge amounts of profits. How many times have corporations told us their prices for X were so high because they were forced to do expensive thing Y to make X available, and then we’ve been able to prove that true, versus the number of times we’ve been able to prove it false? I’d wager those statements have rarely been confirmed as truth, and frequently confirmed as deception. Big Pharma is big, and filthy rich. The very, very rare case where some company spends a gazillion dollars on R&D by itself and is not profitable does not prove the “rule” they sell us into believing. Recall also that we the people through our taxes paid for and continue to pay for scads of basic research to creates these drugs. No drug company invents completely novel things; it and its employees stand on the shoulders of many others, most of whom are not getting paid by those excessive profits. That a majority of modern drugs are vastly cheaper in other countries is one clear indication that it’s poppycock.
Although to some extent our over pricing permits the other countries to have lower prices, in general I agree with the reader. I wonder what would happen if the United States government simply stopped all basic research – would, as the libertarians would assert, the corporate world pick up the load?
Or would we simply not see any more true innovation, just us being locked into medicines which treat, but do not cure, life-threatening diseases?
