> It is but it's the government paying for it. Basically all new novel drugs relied on public research funds [5

The fact that it was partially government funded doesn’t mean that the drug companies didn’t have to put it in a significant % of their own money. Of course it varies but it’s a bit like saying that e.g. Tesla is/was government funded (well kind of but not really)

Would these novel drugs exist without initial govt research?

Possibly not, not all of them at least.

What you have described here is the phenomenon that Stigler describes as "Regulatory Capture". [0]

Regulatory capture is the use of state resources (mostly regulation). To tilt the ground of business in thier favour at the expense of the public and other competitors.

People beg for "regulation" from the government but the problem is that the politicians are often puppets of the very corporations they are meant to regulate. That's how we end up with regulatory capture scams.

Is that "capitalism"? I don't think so. Does it contain traces of capitalism? Yes.

But I think what Americans have is more of corny-capitalism, state-capitalism & regulatory capture.

It is very different from Hayekian capitalism which is actually anti-crony capitalism & anti regulatory capture.

[0]: https://en.m.wikipedia.org/wiki/Regulatory_capture

All of the phenomena described above would happen with minimal necessary regulations as well (preventing imports for fear of quality and safety reasons, which must be regulated in pharma). In general, the problem with US capitalism is insufficient regulation to force a free market between corporations, allowing massive consolidation and discouraging competition on price. Any free market principles will never work if you have less than a few tens or even hundreds of companies competing, for a market as huge as pharma.

Making importers legally liable for damages that be linked to to bad quality & other safety concerns is more effective than a central body trying to tell people what is "safe" or "good quality".

This strategy is still regulation but it is not based on interfering it is based on disincentives.

Limitation of imports is usually just a scheme to facilitate cartels & protectionism.

>Any free market principles will never work if you have less than a few tens or even hundreds of companies competing, for a market as huge as pharma.

It is often "regulation" that makes it very difficult for new entrants to compete.

It is said that it costs about $3B for a corporation to bring a new drug into the market today. Fees people can afford that. And most of that money is just to satisfy obscure regulatory requirements. Not many people can cough up $3B per drug.

> Making importers legally liable for damages that be linked to to bad quality & other safety concerns is more effective than a central body trying to tell people what is "safe" or "good quality".

No, after-the-fact compensation is not at all an effective way to regulate something as critical to health and as hard to measure as pharmaceuticals. Access to the justice system is already extremely limited for regular people, making it even more critical to the functioning of society would be crazy.

Not to mention, this type of liability opens things up for trolling at a massive level: people often die or have severe problems while on drugs, particularly the most important drugs. Every cancer patient dying while on any of a cocktail of 15 drugs is 15+ lawsuits from an unscrupulous lawyer, even if the drugs were perfectly safe.

Plus, drugs have to be not only safe, but effective. I can't sell homeopathic remedies as drugs, not because they are unsafe, but because they don't do anything. How would liability work for drugs that aren't effective?

In practice, if you attempted this sort of "regulation", what would quickly happen is that overwhelmed judges would quickly accept some non-solution like drug makers labeling every possible side effect imaginable on every drug and then, caveat emptor, we told you our vitamin C might kill you and our homeopathic pill might not cure your lung cancer, we're not liable if you chose to pay us for them anyway. And, in fact, this is exactly what medicine was like before the FDA was established to regulate things correctly.

And the costs of putting a new drug on the market are that high only because we, sanely, require extensive testing that also safeguards patients' lives and rights, before accepting a new drug.

Not to mention, the more the new drug improves over the status quo, the less testing is actually required. A lot of the most famous drugs that have these huge go-to-market costs have these problems because they are extremely minor improvements over existing drugs/drug cocktails, so they need large sample sizes to find any effect at all, and have to conclusively show side-effects are not worse than the state of the art. If someone came up with a molecule tomorrow that, say, stopped progression of Alzheimers dead in its tracks the moment you started taking it, I can assure you that it would cost much less than 3B dollars to get that approved and on the market (the current drugs barely show slight slowing down over months after therapy is started).