« Government Demand for Drugs and Drug Prices-Becker | Main | The Revolution in Women’s Employment in the Market—Posner »

12/27/2009

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Of course, this is hardly proved, but the temptation to some sort of certainty is so great that even as careful a scholar as Bate gives it rather more weight than it can bear.

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Any discussion of "markets" are completely confused in the US by "insurance" companies and Medicare/VA etc paying most of the bills. But the matter of US citizens paying a LOT more than those in other nations is not trivial. Increasingly out medical care dollar goes to prescription drugs and as our overall H/C costs are half again higher than Germany and nearly double that of some other nations the costs have become a problem affecting our ability to compete in a global system we designed and promote.

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We should give attention to the prices of drugs nowadays. This is a very nice topic. I learned a lot from this.

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These all things are really very great. That seems only marginally less silly than manufacturing drugs in this country, exporting them to Canada, then reimporting them to make them cheaper these all are great to know about it.

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FDA approval of a new drug, all of which cost is incurred before the drug is sold, is a large percentage of total costs. Once the drug is on the market, the cost of actual production is very low. The sale price of the drug is dominated by the presale development costs. The effect of the government’s pushing down the sale price would therefore be to reduce the development of new drugs rather than the production of existing drugs. (As Becker points out in his comment, this analysis does not apply to generic—unpatented—drugs, which generally are sold at a price close to marginal cost. To those drugs, the normal monopsony analysis would apply: the government would pay a price that forced the producer to move down his supply curve, reducing output.)

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Surveys at my site has predicted that most products have a slope upward the supply curve, which means that the larger the amount produced, the higher the unit cost of production, because the same producer or producers have to offer more resources from other producers.

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More" is not necessarily "better", and I'm cynical enough to believe that, given the level of remuneration in this industry, there are significant - perhaps enormous - inefficiencies in drug research, development and distribution.I doubt that these inefficiencies net out.Maybe constraining price would prompt searches for more efficient drug development processes

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On a different point - could it be that monopsony increases efficiency? "More" is not necessarily "better", and I'm cynical enough to believe that, given the level of remuneration in this industry, there are significant - perhaps enormous - inefficiencies in drug research, development and distribution.I doubt that these inefficiencies net out.Maybe constraining price would prompt searches for more efficient drug development processes

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Read for the pure Joy of it, and it's not any work. I guess if I felt like that I wouldn't have read it either. Interesting but everyone has different tastes. I enjoyed it.

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What a charming story! It's funny how fondly you recall what, to many, could sound like a difficult and possibly even miserable childhood. Thank you for sharing.

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Thanks for your comments. That time on the road with my dad was actually pretty magical.

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