Please understand that I am both being direct with my thoughts on the matter as well as playing devil’s advocate.
The high price on the pill is set to what the seller believes the market will bear. In this case, the market is distorted because two of the three sources of buyer money are “socialized” - that is, they purchase on behalf of an individual using money from many individuals. The three sources are government plans, insurance plans, and individuals who foot the bill from their own pocket.
The market distortion is not caused by the seller (at least, not directly - lobbying complicates that judgment).
Further, if the market were not distorted, as with only being able to charge a fraction of the distorted market value, then the decision to create the product being sold may well have come out differently. The pharmaceutical company may well have chosen to not pursue approval of the drug, and therefore the drug may never have been marketed to begin with.
Finally, the drug companies cannot afford to only market successfully developed drugs for a price that only covers the development of that successful drug. Basic research and development is more than a crap shoot, but often not much more. One uses the accumulated knowledge of pharmaceuticals to decide on a course of investigation, but there are no guarantees of success. If the company has to absorb the cost of every failed attempt to develop a new drug, then the company quickly goes out of business for lack of revenue.
I can think of no clear examples where the government becoming involved directly in a marketplace has not distorted the market to inflate the prices. It worries me that more government intervention is so often floated as the solution or cure for government intervention caused issues.
“It worries me that more government intervention is so often floated as the solution or cure for government intervention caused issues.”
To the lovers of big government, the problem is always that there is not a big enough government yet.
Gun control laws don’t work because we need MORE gun control laws. Social programs like welfare have failed because we need MORE welfare, etc. etc.
“Basic research and development is more than a crap shoot, but often not much more.”
I used to work for a medical products company (blood analysis).
The core of the product involved a chemical which required 6 months to make, and which the company (150 people) could only afford to make 2 gallons of per year.
If _ONE_ batch went bad (long, complex, sensitive process), the company darned well better have enough cash on hand to keep functioning, with near zero revenue, for a full year.
Yeah those single-use packets weren’t cheap. They didn’t just have to pay for themselves, continued employment of workers, and profit for owners/investors, they had to cover surviving the loss of just 1 gallon of their magic potion without which the business (and all employees, from CEO to janitors) faced collapse.