thku4grace

No Real Competition in Drug Prices

I am a big believer in the free market capitalist system. I believe in most cases less government regulation is desirable over more. I know that in all cases every action has a corresponding reaction. However, due to certain specific factors with regards to this market, we need to rethink what is happening here. I believe in patent protection for a specific limited time period so as to support the incentive to research, develop, and then spend huge sums of money from small biotechnology firms supported by investors with the one hope that this new drug will be dragged through FDA trials to a successful conclusion. Investors must be rewarded handsomely for the risk assumed in their investment. I know the government could not nor should not get involved with this system. The problem with this system is that while we allow free market capitalism to incentivize our creative powers, the major drug companies who may later buy into our do a joint effort with these small biotech firms seem to be gouging us on a product that in many cases has inelastic demand. It isn't just that we are subsidizing medicare but we are actually subsidizing the rest of the world. The rest of the world either bands together like in Europe and negotiate a dramatically lower price, or they do as Brazil or China might do, which is ignore the patent and copy the drug, thus making and selling it for a dramatically lower price. Brazil additionally, uses this threat to duplicate the drug so as to weazel a better price. The non-medicare, American then subsidizes everyone else. Now one might say, 'lets just negotiate our own price like everyone else. But we might also be short-sighted in not acknowledging that this reaction will still have an undesirable reaction. That reaction will likely be less lucrative deals paid to the biotechnology firms by big pharma and therefore fewer biotechnology firms will see the investor capital they need to see a drug through research, development, and FDA trials. Additionally, more may have to use their even smaller budget to attempt to market their drugs themselves. We need a more equitable system and there may not be another way then to see other nations pay more, so we can pay less.