Greg Mankiw: My interpretation:…
Greg Mankiw: My interpretation: The Dems will likely give us lower drug prices and less research into new drugs. Good news if you plan to be sick soon. Bad news if you plan to be sick in the more distant future.
Garth: Perhaps I worded poorly…what I mean is since they are already given temporary monopoly power to pay for their R&D costs etc, why give them MORE by making it impossible to compete?
Steve: Because there is a cause and effect relationship between potential profitability and the amount of capital invested in a venture. A venture with potential for only minimal profits will only attract minimal investment. A venture with enormous potential for profits will attract lots of capital. The US pharma industry has been the most productive in the world at producing new drug therapies because it is highly profitable. Reduce the profits, reduce the investment.
Greg and/or Steve:
You both seem to be worried about the possibility of too little money being invested in long-term drug research.
Just out of curiosity, how did you calculate what the most efficient rate of long-term investment in drug research would be, absent a process of free market competition?
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