February 11, 2018
It’s always important to remember that the problem of high drug prices is almost entirely a government-created problem in the form of patent monopolies. In the absence of these monopolies, almost all drugs would be cheap. In many cases, the free market price is less than 1.0 percent of the patent monopoly price.
It would have been helpful to note this fact in this NYT piece on a Trump Administration plan to lower drug prices to patients. Several Democratic members of Congress, including Senators Sanders, Warren, and Gillibrand, have proposed legislation that would have the government pay for the cost of researching and testing new drugs. By allowing new drugs to sell at generic prices, public funding would not only reduce costs but would also eliminate the enormous incentive for lying about the safety and effectiveness of drugs that exist under the current system.
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