May 05, 2020
I know the media are prohibited from stating this obvious truth, but it seemed a good time to remind folks. The NYT posted an article about how Japan’s prime minister, Shinzo Abe, is promoting a drug produced by a subsidiary of Fujifilm, a large Japanese company, as a treatment for the coronavirus. According to the piece, there is little evidence that the drug, Avigan, is an effective treatment, although the drug is known to cause birth defects. The piece also reports that Fujifilm has been aggressive in touting the drug, in spite of the lack of evidence and its known side effects.
If the drug were available as a cheap generic, so it sold at prices comparable to generic aspirin, it is unlikely that Fujifilm would be anxious to promote it, unless its benefits were clearer. Economists usually believe that people respond to incentives, but for some reason, they never point out that the high prices resulting from government-granted patent monopolies give drug companies incentive to lie about the safety and effectiveness of their drugs.