Sex, Drugs, And, Ummm, More Drugs

I think Kevin raises a very interesting point here.

I think it's very important, even while railing against the ridiculous nature of 'me-too' patents and billions spent by big pharma to convince us that we have exotic diseases (Oh no! I have Restless Leg Syndrome! I might die tomorrow!), to remember that drug research is an expensive, high-risk effort, and that pharmaceutical companies who try to tackle harder problems have to be able to make more money back in return to justify the risk.

It's telling that most of the patents filed in medical fields (at one time, the rate was 90%, not sure what it is these days) originate with American research, even when it is pursued by European companies operating in the US. It's important that any new health insurance plan that is pursued keeps the system open to the possibility of drug companies making enough money to stay in business.

It's key that, in the US, drug companies have been left pretty free to set their own prices for drugs, whereas in social insurance countries, the price they can charge is set by the government. Essentially, the social insurance countries are getting a free ride on the backs of the American taxpayer; Glaxo can sell their drug for lower profit in France, if they know they can make it up by overcharging the Americans. Kevin argues, and I think he's right, that if the Americans refuse to pay as much, in the form of government-bargained or -mandated prices, Glaxo won't stop trying to develop new drugs. Instead, they will just bargain harder with the other countries, and make up for the lost money there.

This is more 'fair', in a universalist sense of the word, although one can certainly argue that Americans, as the richest nation on Earth, should simply pay more. On a more cynical note, it also will make the US healthcare system look better, with reference to the rest of the world, because as we start paying less for our medicines, they will start paying more.