Quote:
Originally posted by Mmmm, Burger (C.J.)
Not necessarily. They should slash R&D only if the expected future returns to that R&D decline. Until there's some legislation that would do that, there's no reason to roll it back.
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That was my second point. I still can't figure out what sgtclub is trying to say. If his point is that you shouldn't do anything to reduce pharma's profits now because then they'll invest less money in R&D, that's wrong, because the investment in R&D is a function of its expected return, as you say. If his point is that you shouldn't do anything to reduce pharma's expected long-term profits, because we want to encourage as much R&D as possible, then he's saying that what's good for pharma is good for the country. But I didn't hear him making the second point, nor do most people, although the spirit clearly animates Republicans in Congress. If you believe that, you also believe that we should be giving pharma buckets of money, as the GOP evidently would.
As you suggested, it's Econ 101 that monopoly pricing should be regulated to maximize social utility. Not clear that this maximizes campaign donations, which some may feel is a fair proxy for social utility.
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