One: Martha Angell says it's just a line of propaganda. From a review at http://www.amazon.com/Truth-About-Drug-Companies-Deceive/dp/...
"In The Truth About the Drug Companies, [former editor of the New England Journal of Medicine] Angell explains how a huge portion of the revenue generated by 'Big Pharma' goes not into research and development but into aggressive marketing campaigns to sell their product. She describes how, even though the drug companies claim that it costs them an average of 802 million dollars per drug to develop new medicines, that figure is obscenely inflated since it factors in marketing as well as expected interest the company would have received had they invested the money in the open market. Meanwhile, Angell says, most of the R & D work is done by colleges and universities funded by the government. There are also problems with the drugs themselves, Angell indicates, since a majority are 'me-too drugs', slightly modified versions of existing products which meant to address concerns of consumers most likely to spend money on pharmaceuticals..."
Two: Even if I were to accept the argument at face value -- which I do not -- what it's saying is that as an American I pay far and away the highest medical costs in the developed world, yet receive no better health outcome, and have no guarantee that my insurance will actually cover me when I get sick (rather than finding a way to reject me based on some technicality)... all in order to generously subsidize drug research for the benefit of the rest of the world. Now, I like to think of myself as a generous guy, and I used to work in drug research... but screw that. I'll take Canadian or Western-European-style healthcare, peace of mind, and a check. Then we can talk about how much of my extra money I'd like to contribute to erectile-dysfunction research.
The world would be better off without American drug companies dominating the market, even if it meant no Viagra.
> the vast majority of the research goes into treatments rather than cures, because the former makes money and the latter does not.
[citation needed]
This sort of conspiracy-theory bullshit is really annoying because it fails even the most basic logical analysis. If company A develops a treatment for a disease then it will be able to make more over the long-term than company B which develops a cure for a disease. But if company A develops a treatment and two years after it gets through testing company B comes up with a cure for that same disease then company A is going to lose a boatload of money. The only way this would work is if these companies were acting as a colluding cartel, and so far all evidence seems to indicate that the companies hate each other even more than we hate them.
> The world would be better off without American drug companies dominating the market, even if it meant no Viagra.
I happily invite you to try to live the remainder of your life eschewing treatments developed by American drug companies. Viagra may make a nice whipping-boy for your tirades, but you do know that it was developed when stage 2 testing for an angina drug revealed its more popular side-effect, right? Pfizer did not set out to keep aging baby-boomers smiling, it just happened upon it while actually trying to cure coronary artery disease.
It doesn't require a "conspiracy theory"; it's simple obvious fact: drug companies don't fund studies to develop and test drugs that won't be profitable. Tell me, why do you think they would pay hundreds of millions of dollars to develop and test a drug that won't make money? Your argument doesn't even make any sense; it requires that drug companies do something that is financially illogical.
Has anybody seen any research on how much of the difference between health care costs in the US and Canada/Europe are accounted for by the difference in drug prices?
I also expect that international cooperation on the approval process for new drugs might reduce development costs. Perhaps the UN might actually make itself useful and form something like an international version of the FDA and have member nations agree to abide by its decisions.
Honestly, I think that capitalism works for a lot of things -- health care not being one of them. I think the idea of a "profit margin" on health care is prima facie ridiculous.
I fear that one of the things we get is to subsidize the world with respect to drug innovation. Pfizer, et al, put up the money to develop drugs knowing that they can gouge unwilling customers in the USA (all health care buyers are unwilling--that's why health care isn't a free market).
If the US starts putting ceilings in, the one big side-effect may be a reduction in research.