Does it increase the number, or does it just reallocate customers from one company to another? And I'll repeat my question - how high do drug prices have to get, before further increases can no longer be justified because some scrap of the revenue goes towards R&D?
The advertising is typically done by companies with a patent, where the competition is an existing generic with no real incentive to advertise, and a much smaller profit margin (leaving less for future R&D).
> And I'll repeat my question - how high do drug prices have to get, before further increases can no longer be justified because some scrap of the revenue goes towards R&D?
The premise of the patent system is that the customer decides this. You have a monopoly on the thing that wouldn't exist if you hadn't put in the money to research it, then the customer chooses whether that's worth your price over the alternatives. Without your research your option wouldn't exist, so the customer can't be worse off with it as a (temporarily) expensive alternative than the status quo which they still have the option to choose.
This is completely broken by low deductible insurance, because now the patient wants the insurance company to pay infinity dollars for only a small marginal benefit, and the drug company is happy to charge that much, and the insurance company gets flack for denying coverage.
But how does Medicare fix it, since it's still low/zero deductible insurance? There is no "negotiate prices" with single payer, it's just regulating prices. Which you could do regardless, but the whole point of the patent system is to let the market set prices so that the things most important to people get funded instead of the things most important to lobbyists.
If you're going to regulate prices you might as well get rid of the patent system and replace it with X prizes or something like that. And then you no longer have high drug prices even with private insurance, but you are also effectively having the government choosing what research gets done rather than the market, and suffer the consequences when they decide to divert the money to something else.
My question was how expensive would drugs have to get before we could stop claiming they wouldn't exist otherwise. Is your answer infinity dollars?
> There is no "negotiate prices" with single payer, it's just regulating prices.
There's no "negotiate prices" with a single company having a patent/license to manufacture the drug either. Yet you were happy to count that under "market working as it should", but when people join together to bargain collectively (in the form of government), then the market is broken. How curious that the Market is only said to work when corporations have all the advantages and consumers have none.
My answer is, the amount that it's worth over the status quo which you still have the option to choose instead.
> There's no "negotiate prices" with a single company having a patent/license to manufacture the drug either.
Sure there is, because there are other drugs. The fact that they're not as good is what makes the patented one worth more than them, but it's only worth as much as it's worth, which is not an infinite amount.
> Yet you were happy to count that under "market working as it should", but when people join together to bargain collectively (in the form of government), then the market is broken.
It's not collective bargaining in this case because the government is representing both sides of the table. On the one hand you have cancer patients who don't want to die even if it costs a million dollars, on the other hand you have taxpayers who don't want to pay a million dollars for someone else's treatment. It's an inherent conflict of interest.
You're not negotiating with drug companies to buy an existing drug here, you're negotiating with drug companies to decide what their incentive to research future drugs will be. "Pay less money" is what the taxpayer wants but not the cancer patient. The only way to make the conflict go away is to align who pays with who receives treatment, so that you decide yourself how much you're willing to pay, instead of someone whose incentive is to let you die so they don't have to pay as much.
