Prescription Drug Price Discrimination

This week I've written about the lack of real debate on issues, so today I'll practice what I have been preaching. Price discrimination is the technical economic term for offering different customers the same product at different prices. Obviously this can happen only when the product is not freely traded. The company can choose what to sell to whom at whatever price they think that market can bear. It's a matter of degree and economists split price discrimination into first, second and third degree price discrimination. Bulk sales at low prices to one buyer is one common example. Senior citizen discounts are another.

The market for prescription drugs world-wide is a good example, too. I suppose you won't be surprised the the US common man is the loser.

Drug companies sell drugs in the US at high prices while they are under patent protection, while selling those same drugs worldwide to various national health care systems are much lower prices. Why ? The national health care systems bargain quite hard and are backed up by national governments, who threaten to break patents for essential drugs.

In the US,. the common man pays full price, and even the US Medicare system does, too. There is some bargaining as insurance companies will negotiate better prices when substitutes are available. But overall the US common man pays a LOT more than those drugs cost in France or Germany. This price exploitation is not limited to US companies. European drug companies like Roche do the same thing: charge the US common man more than Germany.

Congress and the public have been screeching about this for years, talking up "re-importation" from Canada. But that debate does not go to the crux of the problem. Drug companies say they must make good profits to fund R&D to find new drugs. And they are right. BUT why does the US have to pay all the money for those profits ? Why do high prices in the US pay for ALL the research that the whole world benefits from ? That's just unfair.

Since all the world benefits from new drugs, fairness requires that each nation's people and all drug users pay for their fair share of the profits that are needed for the research. The US common man should NOT be forced by price discrimination to pay for it all.

Get the rest of the world off our backs and make them pay more. And lower US drug prices. The prescription drug market requires a "fair price" law requiring drug companies to sell drugs in the US at the same lower price as they sell them for in other developed nations. Such a law would give the drug companies muscle to charge MORE in Europe and Canada. Good. Let Europe and Canada pay more and the US common man to pay less.

Why can't the knaves in DC (aka RC racketeer central) figure this out ? Why doesn't this crucial part of the debate get more public exposure in the media. Well, that's what I've been ranting against all week. The media and the knaves are all part of the problem.

Market

Doing nothing. The 1-2-3 Fund needs a new name and focus. My efforts are going to the Krypto Fund, this is where most of the money is anyway. I'll keep checking for asset re-allocations.

Word of the Day

"Gnosis" - noun [$10]
Gnosis means knowledge of spiritual mysteries.
Sentence: There is no requirement for a Ph. D. in Gnosis Studies for one to use simple reason in thinking about major issues. The racketeers in DC seem to infer this requirement when they impugn critics as not being "exerts' or publishing in "referred journals". BUT if they can't answer simply questions and respond to critiques using simple reasoning, they are truly mountebanks selling a secret patent medicine at a high price.