A reader writes:
The problem with Megan's position is that the demand curve for drugs is vertical, or nearly vertical. Sick people will consume only the quantity they need to stay alive/healthy, but will pay any price for that. If pricing was left up to the market, supply and demand for patented, life-saving drugs would reach equilibrium at about 100% of the consumer's assets, plus five years of indentured servitude. Maybe I'm exaggerating, but it would be ugly.
I take this personally. I have narcolepsy, a rare disease, and only one company manufactures the drug I need (Xyrem). It's an "orphan" drug: The monopoly is the government's incentive to make it available, otherwise no company would find the R&D investment worthwhile, given the small number of patients. However, without insurance, my monthly drug costs would be greater than my monthly earnings. What does Megan think about this?
"If people, in their role as consumers, decide that the new pharmaceuticals coming out aren't worth their price, and decline to buy them, I like that too."
What really bothers me is that medicine is literally the Econ 101 textbook example of vertical demand curves. How does Megan not know this?
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