Comments on ReasonPharm: The real price of pills

"The problem with this point of view is that it bl...

2008-06-04T19:29:00.000-04:00

"The problem with this point of view is that it blithely ignores what it cost to get to Pill X."

It's not just the R&D (and confiscatory FDA) costs. It's also: (1) lost income due to a radically reduced "effective time" they have to sell the drug under their patent. They should have a full 20 years to make a profit, but due to various regulations, Pharma typically has only about 8 years to market and sell a drug.

(2) They have to raise the price of a drug for markets that do not have price caps (e.g., the U.S.) in order to recoup the loses from markets that do have price caps (e.g., Canada), and to recoup the anticipated loses from markets (e.g., in India and Italy) that violate a patent by manufacturing pirated drugs.

(3) They have to raise prices to recoup actual and anticipated loses from irrational insurance premiums and the sure-to-arise nonobjective lawsuits.

Javert

Oh, absolutely. That was just a quickie post with ...

2008-04-24T17:03:00.000-04:00

Oh, absolutely. That was just a quickie post with a practical defense of high drug prices, but the moral defense is that drugmakers are producers, not slaves, and should be treated as such.

I do think the price of medicines would fall drastically in a free market -- both because much of the cost of R&D comes from regulatory requirements that would be gone, and also because demand would not be artificially inflated, neither by government entitlements nor by privately insured patients who treat drugs as cheaper than they are because the co-pays make them look that way.

I agree with your point about R&D costs, and of co...

2008-04-24T16:21:00.000-04:00

I agree with your point about R&D costs, and of course the same applies to items such as marketing, legal costs, and ongoing monitoring. However, I think the most important point here is that the company has the moral right to charge whatever it pleases. Many people intelligent enough to grasp that R&D is costly still bemoan that the drug companies dare to profit from their labor, rather than merely recoup their losses. That being said, there are ways that a free market might discourage very high prices for drugs. For one thing, even, say, a very good new medication for blood pressure would not be worth the price for most patients if it were 20 times more expensive than another option that was nearly as effective. (Of course, given the pricing schemes of most prescription drug plans these days, the listed "price" of the medication is rarely directly related to how much a consumer will actually pay the pharmacy for it.)