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Originally posted by Tyrone_Slothrop
Burger can correct me if I'm wrong, but you guys (you and club) keep confusing profits and R&D expenditure as if they're the same thing.
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No. You have attributed that to me 3 times now and I have already corrected you twice, so I'm done.
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Originally posted by Tyrone_Slothrop You seem to think that pharma companies do not exist to benefit their shareholders in some way
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No. That is the ONLY reason why they exist. It just so happens that by benefitting their shareholders they are also benefitting society as a whole.
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Originally posted by Tyrone_Slothrop , and that the only money available in the world economy to be invested in pharma R&D must come from the pharma's holdings.
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No, but the large majority of it does. You fail to realize that most of the government investment comes in the form of university research, which is typically done in conjunction with pharma as a joint venture. In certain cases, the base research has been completed by university, but the regulatory/approval process and the marketing process is untertaken in conjunction with pharma. In either case, pharma has to bring significant $ to the table.
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Originally posted by Tyrone_Slothrop The question about profits has to do with setting the optimum prices in the context of a business that has monopoly characteristics. It's not always a monopoly, because you have generics, etc., but there are short-run monopolies. You and club do not want to think of pharma companies as having this characteristic, so you keep fighting off the obvious truth that patent rights are about bestowing this sort of limited monopoly power.
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The truth I have been fighting off is that you are failing to recognize that while pharma a may have monopoly power for drug A (a) it may not be engaged in predatory pricing (b) likely does not have a monopoly in pharma industry as a whole, and (c) is subject to competition from other remedies and company's with patents for similiar uses.
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Originally posted by Tyrone_Slothrop If you accept this -- at this point, I understand that this is a highly counterfactual hypothetical -- then it follows from very basic economic principles that net social utility is maximized by some sort of price regulation.
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"Net social utility" is another word for government controls of markets, because, in essense, you believe that men are better than markets at determining the optimals involved. I do not share this belief and history is clearly and unequivacally on my side on this.
