Quote:
Originally posted by sgtclub
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.
|
I've mostly stayed out of this discussion, but I'll now chime in to say that:
(A) Pharmaceutical companies with short-term monopolies over drug A absolutely engage in predatory pricing to the maximum extent possible. They maximize profits while they can.
That is, for example, why Schering-Plough charged $80 per month for Claritin -- a drug that NO ONE actually needed (i.e a non-sedating weak antihistamine), but which lots of people wanted. They were able to do so because of the existence of health insurance (speaking of incentives for irrational prices).
The prices dropped (and Schering agreed to switch OTC) when they: (a) were in the midst of losing their patent coverage -- after extending their monopoly for several years after the base patent expired by meritless litigation that nonetheless escaped the category of Rule 11 sanctions due to very competent and creative counsel; and (b) thought that they had a new monopoly lined up (i.e Clarinex-- the metabolite of Claritin).
Schering was, however, screwed when insurance providers refused to cover Rx Clarinex because of the availability of OTC Claritin and its generic substitutes. Ha. Ha.
So, as Hank notes -- the market corrects things eventually -- but don't pretend that there is not rampant predatory pricing.
(B) Of course that is true, but its also irrelevant. The "pharma industry" is segmented into thousands of markets. If you mean thst they likely don't have monopolies over all possible treatments for a single condition -- actually -- they often do for a time.
(C) That's true eventually.
Atticus' point about the odd interplay betwen patent law and antitrust law is well taken. Also, under the law, objectively meritless patent suits are an antitrust violation. Otherwise -- feel free to exclude others. All policy choices made early on -- and probably very good ones, net-net.
S_A_M
S_A_M
