That funding for research is primarily government or private foundation that private industry then moves forward with investors. The amounts touted by Big Pharma are, at best, inflated when it comes to bringing drugs to market. Here is a counter to the Pilot editorial:
The COVID vaccine was protected from risk by more taxpayer monies. Considering vaccine development has fizzled in the face of drugs for chronic diseases that are much more profitable, perhaps we should wonder why we are paying twice, and much higher rates at retail to boot, for all drugs. That is, when does the taxpayer get a return on his investments?
Tidewater News and Opinion Forum 
RE: “perhaps we should wonder why we are paying twice”
I’m more curious to understand how we are paying twice for drugs. I get that drug companies benefit from government funded R&D, but how does free-to-the-company R&D get added to the market pricing of a drug?
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If we pay for research, that is payment number one.
If we buy the drug, then that is payment number two.
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How does making “two” payments cause the market price to be higher?
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How is market price of a new drug determined?
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My own feelings about market economies aside, I think one of the major issues is we’re talking about either monopolies or, at best, cartels of drug producers. There is no market to speak of.
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RE: “How is market price of a new drug determined?”
That’s the question I’m asking you. Since R&D is an unavoidable cost in the preparation of new drugs, it would seem that drug buyers pay for it only once, not twice..
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Trick question. There is no market pricing in drugs. It is whatever the manufacturer decides it can charge absent competition. And if the heavy lifting is already done and paid for by us, then why shouldn’t pricing reflect a good discount for American consumers and bump the margins for the rest of the world. Even foreign companies charge more here than anywhere else even if they benefit from our research.
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RE: “There is no market pricing in drugs.”
Is that a fact? Maybe I should throw away my GoodRx card.
Even so, how would the absence of market pricing justify government price controls?
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Just knock the cost that taxes paid for off the final price. Otherwise it is just another form of corporate welfare.
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RE: “Just knock the cost that taxes paid for off the final price.”
Do you really want to task a government agency to figure out the amount of the subtraction for each drug? What rules would they follow? For example, how would such a “reverse amoritisation” work for the second, third, or fourth drug — possibly 50 years later — that results from a single R&D discovery?
Your thinking here is based on a false premise that somehow we pay twice for the same good. But paying twice doesn’t actually happen..
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I’m done. Not worth discussing anymore.
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The research paid for by government is in public domain.
It is available to the competitors of the original user. Only the drug makers own research is subject to patent.
So, if the key discovery was paid for by government there will be competition soon enough, IF the FDA gets out of the way, which it doesn’t.
The primary cause of high drug prices is the FDA.
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Yes, we know. And we know that no one is responsible for the FDA as you have asserted time and again.
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Congress is responsible for the FDA. They could defund it by 80% and force it to focus on core functions instead of choosing winners and losers.
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