This weird argument pops up regularly. In relation to New Zealand (where I am) it’s argued that the US is subsidising the cost of drug scripts. It’s beyond me quite how NZs drug buying agency is running roughshod over the rights of drug companies that have multiple insurance companies in the US that are bigger customers. What’s the agenda behind this argument?

The U. S. is the last place drug companies can get away with it, is what the agenda is. Americans are suckers for a good capitalist argument. “U. S. customers pay more because they have to subsidize those filthy socialists.” Imma gonna have to call bullshit. You’re telling me you sell to NZ at a loss because...New Zealand tanks will roll up to your doorstep if you don’t? Does New Zealand even own a tank? No, you sell to NZ because you somehow figured out how to profit from doing so.

But as we see above, plenty are willing to carry the water of the poor, downtrodden drug companies.

>No, you sell to NZ because you somehow figured out how to profit from doing so.

The incremental cost of selling drugs you’ve already developed is quite low, so of course they can still profit from them in less profitable markets. But it’s the US that’s paying for them to be developed. This isn’t even up for debate, R&D in the US dwarfs everywhere else.

There’s no agenda behind it at all. If profits in the US market go down, they either have to go up elsewhere, or investment has to go down to match. This is very basic maths.

This argument does not at all reflect the actual revenue model of pharmaceutical companies here in the US.

In the private sector, far larger amounts of funding are spent on marketing than research[1]. The basic maths shows: investment in research can be maintained or even increased while providing greater access to the fruits of that research.

The money is there. What we lack is the proper incentivisation.

1. https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...

The flaw in this is that for-profit medical research optimises ... for profit, that is, the treatments for which most can be charged.

So they focus on illnesses of the rich gerontocracy while diseases of the developing world have to be addressed by public funding. Additionally, there's no real incentive to work on cost reduction.