How expensive do prescription drugs need to be to fund research?

I'd say we're already at the point that they are essential to our survival, at least for societies as they currently exist. CPUs are also hard to invent, and hard to progress already, requiring hundreds of millions of dollars for each new iteration.

> Business is great at researching processes of manufacturing. Not so good when it comes to researching actually new stuff.

I don't believe it. Most of the things we currently use were invented by businesses, or by someone who then started a business to sell it.

> But they must become unreasonable at some point if they cost as much as the incentive for research for companies.

Again, you're assuming the conclusion. Maybe this is the case in some circumstances, but it's a assuming a lot to claim this is the case for all companies and all drugs.

And if the cost is really this high, then incentivizing more creative approaches to treatment might just be better anyway. It shows a lack of imagination if we can only use a hammer when faced with a health problem.

Dean Baker has been banging on about this for years.

The poster I was replying to points out that this concept isn't actually what is happening (at least, anymore, for some areas) - instead, smaller companies do R&D - some fail, and the investment is lost; some succeed, and the profit from being BOUGHT rewards the investment. The reward for success is great enough that some investors will gamble on these small companies (while the big companies investors are investing with lower risk, lower rewards).

I pointed out that this is very similar to the XPrize - private investment was done in many companies, but only one (ish) would win. (This is actually a bad analogy, since the XPrize was much more about status - the prize wasn't large enough to truly be significant to a company that could claim it). My (unspoken) point was that the govt could stipulate controls on the resulting product - companies could research with greater confidence of what payout they'd get (on success, of course), but the incentive for price gouging is removed.

The difference between today's IP-monopoly and the XPrize is that the prize was a known amount, and in the part I didn't state, minimal profit would be had past that, compared to today's "you get as much as you can gouge, for as long as you can abuse rent-seeking".

Really I just did a terrible job of explaining my point.

And they are able to do that because laws have been passed in their favor to legally bar other people from simply importing the exact same products from other markets where they are sold at much lower prices.

Price discrimination isn't subsidizing, per se, but the scope for price discrimination is very limited in the absence of government support due to arbitrage. Governments interfering in the market to enable price discrimination is very much a form of subsidy, even if the money isn't passing through the government on its way to the supplier.

Yes. I don't say business is useless when it comes to research. Business is great at researching how to tune the production process so that the thing they went to produce is affordable for as many people as possible.

Every invention goes through business to reach you. But it usually starts at the university on in military research.

> Again, you're assuming the conclusion.

I don't think I do.

1. Companies fund research with selling drugs they invent.

2. Inventing drugs gets more expensive.

1 & 2 => drugs get more expensive.