Quote:
Originally posted by sgtclub
I agree with most of this, but would agrue that the recoupment during the monopoloy period for R&D costs and the 100 failures is the most efficient way for the company to recoup those costs, realizing that the pricing may not be the most efficient for the consumers if there are no other alternative drugs to chose from. Are you are saying that the company could charge significantly less, still recoup costs, and make a competitive profit? If so, I would be skeptical.
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Sure, but we're talking politics here, not corporate behavior. The
political question is whether the regulation of drug prices (directly or indirectly) has net benfits for our society. My position is that it does, because drug pricing is currently ineffiecient because 1) it is monopoly priced, and hence carries dead-weight loss adn 2) is subsidized by over consumption.
I fully believe that drug companies maximize their profits under the given regulatory regime. But that's not necessarily a good thing for anyone other than those companies and their shareholders.
And, yes, drug cos. could be profitable with lower drug prices. They would have to slash costs, including R&D. But I'm of teh view that there's an excess of R&D because of ineffieciently high profits.
