The NYT had an interesting article about an effort to make a number of cancer drugs available in several African countries at generic prices. This will make many treatments that are extremely expensive in the United States affordable for these countries. As the piece notes, the Indian drug manufacturer intends to sells many of the pills at 50 cents each and infusions for $10. The prices in the United States could be close to one hundred times as high, as was the case with many AIDS drugs and the hepatitis C drug Sovaldi.
This is a great story for the people who will now be able to get treatment. It also drives home the simple and obvious point: drugs are almost invariably cheap to produce. They are expensive because we give drug companies patents and other types of monopolies.
This is done to to give them an incentive to carry on research. It is an incredibly backward and wasteful way for the government to finance research. It would be great if we paid for the research upfront and allowed drugs to be sold at their free market price rather than trying to find ways to extract money from people suffering from serious illnesses, or to force them to pressure governments or their insurers to cough up the money.