There used to be a reasonable pricing rule for drugs developed with public funds, but we lost it in the spring of 1995, right after the creation of the WTO.
While the argument stands strong that there should not be price gouging, it should not be overlooked that while the government developed the drug, the drug company had to manufacture, mass produce, and distribute it, that is not free unless the government covers those costs. I’m sure the relatively modest cost includes some profits for them as well, which is not surprising. Modest profits until of course the number of doses is calculated, which is astronomical.
Drugs funded by the state (taxpayers don’t pay for things at the federal level. Progressive sources have got to start incorporating the insights of MMT into how they phrase things) should be produced by the state at cost. There should be a state owned enterprise that does things like this at cost and intellectual property rights regimes at places like the WTO have to be entirely ditched. Since the state can create a currency whenever it wants, it could sell below cost and just create new money to pay for the public subsidy. It is ridiculous that a drug company can come along (as they often do) and take over the production of a drug that saves lives, one often funded through the NIH or by other means in the public sector, and do a price mark up. We here in the US cover a large share of R & D costs in the public sector. Economists are full of shit, on almost every issue. They talk about economic rent, which absolutely dominates the modern economy (capitalists are largely parasitic and make profits increasingly through the externalization of costs), in their silly models economic rent is often not a real thing (because they define free markets in ways that have no basis in reality), and if economists were serious about taxing away unearned income like economic rent our society would be a radically different place. But, what happens is these parasites do monopoly price markups because of the support given to them thanks to the corrupt politicians they pay off with their monopolistic rent seeking. Capitalism never worked well for most of humanity and was always based on brutality, violence and environmental destruction. But, this system is now the key driver in many crises and we must move beyond the capitalist system and every politician paid to maintain it.
The classical economists at least talked about economic rent, land rent, and the like. But they (Marx, Smith, Ricardo, Mill and the rest) analyzed the economy in terms of class. Once land and economic rent went on the backburner, the whole way of analyzing the economy became absurd.
As I’ve been saying for more that two decades,
"Defend Democracy from Korporate Greed - ABOLISH CAFTA, NAFTA, and the WTO!!! "
Where do they “stand strong that theyre should not be price gouging”. Adam? Could you show me where some government representative of the US says that, somewhere?
I’m sorry to sound skeptical, it just seems inconsistant with current ideology+practice. Which is pretty rigid.
No your not wrong, But i said “The argument stands strong that there should not be price gouging”, not the government! All I’m saying is that unless there was an egalitarian molecule in American government, the corporations are absorbing production and distribution costs, and so they pass that cost on, along with a profit margin. If the people had some say in how the government ran, (they absolutely do not), then they could require the government to stop giving the top 60 corporations “tax free” status, and instead use the tax revenue otherwise collected to provide free pandemic relief. Unfortunately Oligarchy’s are not designed to care about the public and are fully committed to giving corporations everything and anything they want, even if it kills every single one of the rest of us.
Them not getting more taxes back from corporations doesn’t make it so that they cannot spend on other things. The federal government is the only public sector institution that can create the currency we use and is not boxed in by taxing or “borrowing” (which the federal government really doesn’t do when bonds are created and sold at bond auctions). So, them not spending on pandemic relief is a choice and in no way connected to spending on other things or taxes coming in. They could spend on anything they want tomorrow, since again the federal government can create the currency it uses. State and local governments cannot. Tax revenue at the federal level doesn’t pay for things like it does at the state and local level. Things are funded basically when politicians decide to fund things.
You are right though, because the people in power use the state to support the rich and large corporations, working people have next to no say. They have no say in government, or either major party, and zero say (none) in the dominant media. We should tax large companies to reduce their economic rent, to reduce inequality, to guide behavior, among other things, but we don’t need to tax them or anything else at the federal level to fund things. Cause, again, taxes at the federal level technically don’t fund anything.
“Taking taxpayers for a ride” seems to be a requirement once you get elected.
Only two decades, indeed.
Brings to mind the trial date of the accused WTC mastermind Khalid Shaikh Muhammad, who goes to trial in 2021.
Capitalism at its best.
Everyone cant get a vaccine if it isnt free. Virus will continue. Ive heard its immunity doesnt last for long anyway.
Who was the president then? A Democrat.
Blessing in disguise for those who can’t afford it. Do you really trust a Gate’s funded, Pharma-created vaccine to work? We’ve had a flu vaccine for…how long has it been? And yet, in a given year, a whole lot of people–vaccinated or not–contract it, and tens of thousands of people (in this country alone) die from it.
You really trust the government and corporations to a safeguard your health, huh? Must because they have proven themselves to be so trustworthy in the past.
Actually, that can be pretty much overlooked as it costs only about a dollar per dose to manufacture, mass produce, and distribute a vaccine (vaccines cost more for this stuff than treatments which will come in at pennies per pill). You can see this simply by noting that prices are about 9 times higher in developed countries than in underdeveloped countries. The companies still make a profit in underdeveloped countries but they don’t include recovery of R&D or have such heavy advertising costs in their pricing there.
Generally pharmaceutical companies do not price their products according to costs but rather according to need. They look at how much society will save per dose and they charge accordingly (i.e. “what the market will bear”). They actually admit to this quite openly. Here is a quote from the CEO of Gilead about the deal they struck with respect to their pricing of Remdesivir.
Click for Quote from Gilead CEO on drug pricing
In normal circumstances, we would price a medicine according to the value it provides. The first results from the NIAID study in hospitalized patients with COVID-19 showed that remdesivir shortened time to recovery by an average of four days. Taking the example of the United States, earlier hospital discharge would result in hospital savings of approximately $12,000 per patient. Even just considering these immediate savings to the healthcare system alone, we can see the potential value that remdesivir provides. This is before we factor in the direct benefit to those patients who may have a shorter stay in the hospital.
We have decided to price remdesivir well below this value. To ensure broad and equitable access at a time of urgent global need, we have set a price for governments of developed countries of $390 per vial. Based on current treatment patterns, the vast majority of patients are expected to receive a 5-day treatment course using 6 vials of remdesivir, which equates to $2,340 per patient.
Reading the first sentence of that quote should make you sick. But don’t worry - there’s a $373 pill for that!
Clinton was the best Republican President since Eisenhower
Might as well add GATT
I guess I just assumed that to go from zero production to mass production and to do so rapidly would cast a good amount of money, but perhaps not. More importantly, by what mechanism did you add that quote?
GATT basically became the WTO, or was superseded by the WTO. The original Bretton Woods institutions were to include the World Bank, the International Monetary Fund, and the World Trade Organization, but the parties could not agree on a binding WTO, so they cobbled together the General Agreement on Tariffs and Trade.