AW,
I think that is one of the biggest issues facing us. Country after country enacts stringent price controls on medicines. The vast majority of the cost of medicines is in R&D (despite the bad publicity over marketing costs there are less than 15 percent of typical drug company expenses). It doesn't cost all that much in most cases to make more pills of a medicine once it has been invented, but it costs a helluva lot to invent the drug -- to fund the research labs, research scientists, etc., not to mention maneuvering the drug through testing phases and each country's separate regulatory approval process.
Let's say Country A has a free market and relative wealth (two related characteristics), and you as a drug company can charge what that market will bear. You will set the price high enough to recoup R&D expenses for the drug and also to fund new research initiatives to keep the drug pipeline full. Now let's say Country B and Country C and Country I and Country Z all say, screw that, we're poor or think we are, we don't really believe in free markets because they might actually cause somebody to feel bad or work harder, so we are only going to let you charge a "fair" price. After all, human beings are "entitled" to this drug once it has been invented. They then define a "fair" price as one which is above your incremental cost of cranking out a pill to put in a bottle, but not enough to fund your R&D efforts.
What you will end up doing is remaining in Country B and Country C and Country I and Country Z but forbidding resellers there from exporting the drug to Country A. You will leave prices high in Country A so you can fund your R&D efforts. This works so long as Country A lies there and takes it. Country A is then in a really sh*tty position: If it says, screw this, we are going to put price controls in place too, then no one is left to fund the R&D and new medicines stop being invented.
Think about what happens then. Thousands of research labs run by these companies close. Thousands of lab techs and doctors and other research scientists lose their jobs because there is no one to pay them. The personal cost when we lose jobs is high, for us and our families. But when these people lose their jobs from a lack of funding, the consequence is that the next big advance in medicines doesn't happen. Then I guess we don't have to worry about being overcharged for great medical advances, because there won't be any.
The dramatic increase in life expectancies of the past century so far is continuing, but I fear that process may soon end because politicians would rather pander to people who want something for nothing than think intelligently about how to solve this problem. |
