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101117Re: Obama and the 'Drug Killer'

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  • Doug Pensinger
    Nov 3, 2008
      John Williams wrote:

      > Drug development is an industry with high fixed costs. Once those fixed,
      > or sunk, costs have been committed, the drugs are sold for the price that
      > the market will bear. According to the expert who wrote the article, the
      > more socialized markets settle on a lower price than the less socialized
      > markets. If all markets were socialized, then all the prices would be lower.
      > Then companies would not be able to justify committing the fixed costs
      > on future development of some drugs, and some drugs would not be
      > developed.

      What if there were government incentives/grants to develop the pharms?
      It seems to me that the free market does a poor job in this regard;
      emphasizing stuff like boner pills because they're wildly profitable
      and in recycling previously developed drugs with slight adjustments in
      formulation or in combination with other drugs. There is a huge
      disincentive to develop something like a cure for the cold because
      over the counter remedies are a hugely profitable industry.

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