“If the federal government intervenes in the market and prevents biotech companies from earning a fair return,”
1) What is a fair profit? 10%, 50%, 100%?
2) How much do Big Pharma and the biotech companies benefit from the billions of dollars the federal government pays in the form of direct subsidies to them for the development of products (i.e. Covid vaccines) and indirect subsidies in the form of research grants to universities?
3) Consider the fact for decades U.S. citizens have paid the highest drug prices in the world because the pharmaceutical companies amortize their R&D costs against the products sold inside the US which allows them to charge lower prices in other nations? Is it “fair” US consumer should pay more for the drugs they purchase, particularly when the US taxpayer is subsidizing the industry?
4) Is the compensation for the senior executives at Pfizer “fair” and reasonable. Per the most recent proxy statement the total direct compensation for the CEO of Pfizer in 2020 was $21 million. Total direct compensation for the top 5 executives at Pfizer was nearly $60 million. How much of that is due to the windfall of billions of government spending for Covid vaccine development and purchases of Covid vaccines for the population?
Please don’t infer I’m a socialist who wants government to dictate compensation and profitability to the pharmaceutical industry. However, I’m sick of big multinational corporations gladly receiving billions in subsidies, tax breaks, R&D subsidies, federal purchases and other direct and indirect benefits and then whine about government “intervention” in their markets. Many of the subsidies, tax breaks, R&D subsidies, and purchases occur because these companies spend millions lobbying Congress and paying off regulators by hiring them when they retire from the government.
Covid has exposed the cosy relationship between the FDA, NIH, CDC and the big corporations making billions off the citizens of the United States. There have been numerous threads on this forum about the federal government and the big medical corporations. Read Robert Kennedy Junior’s book about Fauci for more of the nauseating details.
Perhaps the real reason there isn’t a free market in medical care is because the big medical corporations have lobbied Congress and the bureaucracy to keep a free market from flourishing.
Bingo!
This legislation is merely a squabble between thieves (Big Pharma vs Big Government) over how to split the loot obtained from ripping off patients with monopoly-priced medicines.
Pharmaceutical companies spend much more on lobbying and marketing expenses (and outright bribery to legislators) than they ever spend on research and development of products. It gives them a better return on their investment.
I have no sympathy for them or the Governments they rent. Enforcement of existing 100-year-old laws would put most of the executives and regulators in jail.
Let's do that. After the first few cases, watch medical prices drop by 80% for the same stuff we get now. And we will get better quality stuff later. That is what genuine free markets do, as opposed to the pretenses we have today.