One thought on “Where Drugs Come From”

  1. To a large degree the problem with US drug prices is because of shenanigans.

    Like, for example, you, as a drug company, sell medicine to CVS at an inflated price, then the pharmaceutical company provides kickbacks to CVS a “self stocking fees” or whatever. This means that a lot of smaller drug stores cannot compete and it puts them out of business. Then once the competitors are cleared then the prices are raised.

    This is similar to the situation with other monopsonies like the US medical insurance sector.

    I am reminded of a similar issue which happened a couple years ago where Intel paid Dell kickbacks in order to exclusively sell computers with Intel processors. These tactics were used by Intel in the USA and in Japan. It eventually led to the demise of Transmeta for example (this was proven in court in Japan). It also meant that AMD was not able to make full use of their, then superior product, to increase desktop sales. AMD had to give away processors to Compaq, in order to compensate them from losing the Intel kickbacks from exclusivity deals for example. These practices are insane. The US’s trust busting mechanisms, which were put in place when Theodore Roosevelt was President and later are basically ignored all time now. It has led to massive concentration in industry. This makes a lot of markets less competitive.

    Then there is also the fact that the companies which make generics don’t have large profit margins and thus are easy targets for larger more profitable companies to absorb. The licensing process also takes way too long. I think the pharmaceutical industry probably needs to be broken down and the licensing of generics companies needs to be simplified. Because let’s face it. most of the existing conditions can be treated with medicines for which patents have long expired. The legislation for novel medicines though, I can understand that companies need to get their payback, particularly for cures. I think it would likely be a good idea if governments instituted prizes for institutions which develop cures for diseases which presently have no cure for example.

    I think the present drug patent scheme and time limit provides some insurance to patients that the cures will eventually become widespread. So I do not think the problem with those medicine is quite as dire.

    However from what I’ve heard, generic drug prices in the USA have increased so dramatically in the past decade, that it just means something is clearly wrong and the market is broken.

    So focusing the debate so much on leading edge discovery, I think, is a bit of a misnomer.

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