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> My answer is, the amount that it's worth over the status quo which you still have the option to choose instead.

You are justifying high drug prices by saying the drugs wouldn't exist otherwise, yet offer no proof or reasoning the drugs really wouldn't exist otherwise. No matter how high drug prices would get, or how little of that money would go back into R&D, you'd still say "the drugs wouldn't exist otherwise".

> It's not collective bargaining in this case because the government is representing both sides of the table.

Exactly like insurance companies represent both sides - the people who need the drugs, and the larger pool paying for insurance. If you don't like the government's version of health insurance, you can always get additional insurance, or buy the treatment individually - government-provided healthcare doesn't mean private options become illegal.

And before you claim that, because they must survive on the Market, insurance companies act ever so virtuously in defense of the insured, this is false: http://www.pnhp.org/news/2009/september/testimony_of_wendell...




> You are justifying high drug prices by saying the drugs wouldn't exist otherwise, yet offer no proof or reasoning the drugs really wouldn't exist otherwise.

That is the basic premise behind the patent system.

The drug didn't exist before. Someone has to pay to come up with it, and also pay for the drug trials to establish that it works. So there needs to be some revenue stream to cover the high costs, above the one you get by waiting for someone else to do it and then going into competition with them and driving their margins down to yours.

Some drugs might have been discovered anyway, but it's hard to tell which ones. Disentangling preparation and skill and ingenuity from random chance is not an accounting we really know how to do. But the more expensive it is to develop something, the more likely a financial incentive is required in order to develop it.

Meanwhile the low hanging fruit in medicine is mostly gone now, so new discoveries are generally expensive, and the FDA approval process is crazy expensive to the point that that alone is enough to prevent known-beneficial public domain drugs from becoming available in the US when they can't be patented. So new drugs are the sort of thing you wouldn't expect to happen very often without a significant financial incentive.

> No matter how high drug prices would get, or how little of that money would go back into R&D, you'd still say "the drugs wouldn't exist otherwise".

The patent system is terrible. Monopolies are terrible, they're inefficient and expensive, everyone else hates them and they should be avoided whenever possible.

It sometimes leads to awful seeming inefficiencies like someone spending $10M to secure a patent which they then make $10B from. But the way that happens is that there is a drug worth $25B to patients which requires a $10M investment to make viable and no one will pay the $10M up front without receiving anything in return. So what the patent system is really allowing you to do is to pay $10B during the term of the patent in order to get a drug that creates $25B worth of better outcomes for patients over its lifetime, even though the underlying cost was really only $10M, because we had no other way to raise the $10M. That's terrible, but not as terrible as losing the $25B value entirely -- it's still net positive by $15B compared to the alternative.

This makes us want to put on our efficiency hats and figure out how to convert the $15B gain into the $24.990B gain we see should be possible. But then we need some other way to raise original the $10M. One obvious method is to pay for it with taxes. So let's do that -- we'll pay for it with taxes and not patent it and realize the whole gain. If we can get funding for that.

But there's the rub. If we got funding for it, all the way through to commercialization, then it shouldn't have been patented. (And if it was still patented despite 100% public funding then that was the problem.)

It's only when the government fumbles and fails to fund something worthwhile that it leaves the patent system the opportunity to profit like that. But in that case it's legitimately picking up the slack -- we're back to it producing $15B in net value compared to the alternative, because the alternative was that nobody else paid to fund it.

And more commonly it's companies making far smaller profit margins than that because their overall research costs are in the billions as well.

> Exactly like insurance companies represent both sides - the people who need the drugs, and the larger pool paying for insurance.

Yes, precisely, that is why all low-deductible insurance is problematic, whether it's public or private. The underlying problem is that healthcare is too expensive for most people to be able to afford to pay for out of pocket.

The idea that routine healthcare should be an expense so large that it requires filing an insurance claim is a tragedy. How is it worth paying thousands a year in additional insurance premiums (or taxes) to avoid paying what should be hundreds a year by paying for all ordinary healthcare entirely out of pocket?

> If you don't like the government's version of health insurance, you can always get additional insurance, or buy the treatment individually - government-provided healthcare doesn't mean private options become illegal.

Typically the result is effectively equivalent to being prohibited, especially when (as now) they disallow providers from charging Medicare the amount Medicare will pay and then charging the remainder to the patient. Because then the patient wants a treatment that costs 10% more than Medicare will pay, so the provider doesn't accept Medicare and you have to pay the full cost out of pocket, which you can no longer afford because you're required to pay $10,000+ in Medicare taxes every year despite them de facto covering 0% of your treatment cost.

> And before you claim that, because they must survive on the Market, insurance companies act ever so virtuously in defense of the insured, this is false

Nope, private health insurance companies are garbage. We should stop encouraging health insurance plans with <$10,000/year deductibles and then replace them with nothing. Then watch as healthcare costs fall to what people can actually afford, and the outcomes for people without any insurance improve dramatically.




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