If anyone can't afford your drugs, this is an issue of insufficiently optimized price discrimination (as long as what they can afford is above the marginal cost of manufacture). There's often manufacturer's coupons for exactly this reason - make a compelling case about what you can afford, and the manufacturer will drop prices until you can give them some money instead of none.
Imagine if the water you drink was priced at the maximum amount you would be willing to pay not to die of thirst. This would palpably be a terrible thing. All of us go around every day buying things that we think are worth substantially more to us than the money we pay. It seems to me like this is the whole value proposition of capitalism for human beings.
I have always thought that free markets are useful, but I think that is only the case if they tend to drive producer surplus to zero and consumer surplus to the maximum. If there were no consumer surplus, as with perfect discrimination, then I don't see the point of economic activity.
I sort of thought (because I read it somewhere) that orthodox economic theory implied that perfect free markets should drive economic profits of businesses to zero. And profits should be roughly equivalent to producer surplus. So we shouldn't be balancing consumer and producer surplus, let alone allocating the surplus all to producers.
If you don't allow for price discrimination, then many new medications cost so much per patient with the relevant disease that your choices are to have an unaffordable average price charged to everyone, or just don't make the medication in the first place and let nobody have it. With price discrimination, you can keep the average price high by gouging those who can pay, and using that to subsidize those of more modest means.
There's no choice here that's an unalloyed good. There's always tradeoffs. Price discrimination is just sometimes the lesser of several evils.
I'm not completely confident of the necessity of patent rights as they are, but it seems logical enough on the surface. I can't assume that entities which engage in transactions together are independent.
See also the story of the insulin patent: https://www.thelancet.com/journals/landia/article/PIIS2213-8...
> [Frederick] Banting felt “…that as a physician who had taken the Hippocratic oath he could not be party to any patenting of a discovery. ... John J R Macleod, with whom Banting shared the 1923 Nobel Prize in Physiology or Medicine, similarly declined to be named on the insulin patent. However, neither [Charles] Best, a medical student who had yet to swear the oath to Hippocrates, nor [James] Collip, a PhD biochemist, faced any ethical dilemma and were named as inventors, although for $1, Collip and Best transferred all rights, title, and interest to the Governors of the University of Toronto. Banting, Best, Collip, and MacLeod all believed that insulin should be made as widely available as possible, without any barriers such as cost....
(ht https://www.vox.com/science-and-health/2017/5/12/15621952/in... ht 'steveklabnik yesterday on Twitter)
I think the proper conclusion is "no information" - the fact that redistributors are being paid what they're paid does not tell us anything positively or negatively about the necessity of them being paid what they're paid. You'd need to look at their actual costs, and more importantly the market of those costs: if they stopped paying researchers, what would the market effect be? (Perhaps they could fund research grants instead of discoveries, incentivizing everyone to work on the problems most interesting to them regardless of profitability, and thereby increasing research into cures for rare diseases.)
That's the D part of R&D, isn't it?
