Quote:
Originally posted by Mmmm, Burger (C.J.)
Yes. Sorry. Next step. How can you say that competition under this artificially inflated demand is unambiguously better than additional demand-side pricing pressure in the form of monopsonistic buying by the government?
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I think we are looking at this from two different vantage points. You seemed to be concerned on a drug by drug basis - if pharma has a monopoly on drug A, then the market for drug A is inefficient. I am viewing this an industry level - it does not matter all that much whether pharma has a monopoloy on drug A, as long as it does not also have a monopoloy on drugs B C and D, because it allows pharma to greater subsidize R&D research on drugs similar to B C and D, as well as future drugs.
Question on your point regarding price descrimination. Couldn't this also be viewed as simply the company setting prices to meet demand in market 2? We've already agreed that demand in the US is artificially higher due to insurance subsidization, so it makes perfect sense that prices in the US would also be higher.
