Bill Roper (billroper) wrote,
Bill Roper
billroper

A modest proposal for controlling prescription drug prices

Prompted by a post from shsilver, I throw out the following proposal because I'd be interested to see folks take potshots at it:

Conceding that drug companies spend a lot of money on marketing, it's also true that they spend a lot of money on research and development. As someone who benefits from modern pharmaceutical research, I'm loathe to strangle the goose that's laying the golden pills. On the other hand, I know that we pay more for prescription drugs than most other places on the planet. And to some extent, that's ok.

The U.S. is the richest and most powerful nation on the planet. We consume a lot of the world's resources. I look at higher prescription prices in the U.S. and say to myself, "Ok, we're subsidizing these drugs for the poorer countries of the world." And maybe that's not such a bad thing. We should subsidize these drugs for the benefit of the third world.

But why should we subsidize these drugs for the benefit of first world nations such as Britain, Germany, France, and Canada? If I understand correctly, those governments negotiate lower prescription prices with the threat of expropriation of patents if the drug companies don't comply and -- as we've seen in the press a lot in the last few years -- they're paying a lot less than we are. (I'd add Japan to the list, but I really haven't seen any discussion of how this is handled there.)

Ok, so suppose we picked out a representative group of first world nations and announced to the drug companies that we were going to fix prices at a generous 110% of the average price that they charge in those countries? We'd still be paying more than anyone in the rest of the world for our drugs -- thus subsidizing drug research to a lesser extent -- but we'd effectively be demanding that the other first world nations pay their fair share of the research subsidies.

Is this a good idea? A bad idea? Enquiring minds want to know.
Tags: musings, politics
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