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Pharmaceuticals: understanding your solution set - Megan McArdle
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Pharmaceuticals: understanding your solution set
30 Jan 2008 08:21 am
There's an old adage variously attributed to chefs and engineers: "Good. Fast. Cheap. Pick two."
This does not hold all the time, of course; strawberries in season are fast, cheap, and divine. On the other hand, if it doesn't happy to be July, you have to wait months. So usually, the adage holds: you cannot have everything. You have to choose.
A lot of people in my comment threads on pharma are saying "Well, okay, maybe if we forced the drug prices so far down, that would kill off innovation. But it's not fair that Europe is free riding. We need to find some way to force them to Pay Their Fair Share." Interestingly, many of them seem to be conservatives, the same people who applaud when I say, in re other policy issues, that the fact that there is a problem does not automatically imply that there is also a solution.
No one who is a serious policy wonk on this stuff has any sort of workable proposal whereby America persuades Europe to pay more for its drugs. We have no leverage to do so. European governments have extraordinarily strong financial and political incentives to keep the co
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sts of drugs down. Our trade relationship is not exactly harmonious right now. And we cannot forbid pharmaceutical companies to sell into those nations at discount prices, because those countries can break the patents and license generic manufacturers to manufacture the drugs. All we would end up doing is remov"
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