What about the Martin Shkreli incident? How does that get explained by your general broad thesis statement - 'maybe we should devote less money to life-saving R&D'?
Economics describes human behavior in the aggregate.
If the expectations for returns on pharma become substantially lower, less money will be invested in pharma and they will have less money to invest in R&D.
I don't think Martin Shkreli is a challenge to that thesis.
The Martin Shkreli challenge is that its actually not R&D that money is being deployed its that many people (MS being one example) have found ways to capture consumer surplus in a quasi monopoly environment and then extract maximum prices to a group that has an inelastic demand.
Nothing to do with deploying more R&D in this case.
In terms of expectations on returns of your statement - I would be curious to see the case that increased expectations on returns correlates with positive outcomes. Sure more money in, but that does not equate to better meaningful and better results out.
The Martin Shkreli example is perfect for you because it shows someone raising drugs but we don't have the timeframe to see someone quickly ramping up cheaper generic production because of how quickly he was jailed. His company went bankrupt due to generic competition.
Sure more money in, but that does not equate to better meaningful and better results out.
I believe that spending more on R&D will cause more drugs to be developed. If you disagree, we can agree to disagree - I'm not sure it would be a productive conversation.
...partially due to the fact that nobody else can be bothered to fund it. Which is the problem with public capital markets; unless someone forces them to research, say, seatbelts and airbags, those things become an ignored liability.
Public capital markets are also how we avoid improving things to increase margins. Especially in a modern market with shareholders and administration involved, there's little incentive to improve things or even make them human-safe without regulation. It's why stuff like the FDA exists.
Markets have inefficiencies and reflect collective human irrationality (such as underestimating the likelihood you will be in a fatal car crash). But it is trending better - not especially in a modern market. The stuff the FDA prevented when it was first created is much worse than what it has to deal with today because of better information dissemination and a broadly educated population.
I'm not sure who else would be funding pharma research if not people who are giving their money willingly.
I travel abroad frequently and am an EU citizen. Most pharma research is not funded by the government, in Europe or the US. The EU free rides off of American drug R&D, this is well-studied.
No need to be snarky and sarcastic just because you are having trouble explaining your point.
Comments
In public capital markets, this is equivalent to saying 'maybe we should devote less money to life-saving R&D'
What about the Martin Shkreli incident? How does that get explained by your general broad thesis statement - 'maybe we should devote less money to life-saving R&D'?
Economics describes human behavior in the aggregate.
If the expectations for returns on pharma become substantially lower, less money will be invested in pharma and they will have less money to invest in R&D.
I don't think Martin Shkreli is a challenge to that thesis.
The Martin Shkreli challenge is that its actually not R&D that money is being deployed its that many people (MS being one example) have found ways to capture consumer surplus in a quasi monopoly environment and then extract maximum prices to a group that has an inelastic demand.
Nothing to do with deploying more R&D in this case.
In terms of expectations on returns of your statement - I would be curious to see the case that increased expectations on returns correlates with positive outcomes. Sure more money in, but that does not equate to better meaningful and better results out.
The Martin Shkreli example is perfect for you because it shows someone raising drugs but we don't have the timeframe to see someone quickly ramping up cheaper generic production because of how quickly he was jailed. His company went bankrupt due to generic competition.
I believe that spending more on R&D will cause more drugs to be developed. If you disagree, we can agree to disagree - I'm not sure it would be a productive conversation.
You miss a fundamental difference.
"I believe that spending more on R&D will cause more drugs to be developed."
More != better.
...partially due to the fact that nobody else can be bothered to fund it. Which is the problem with public capital markets; unless someone forces them to research, say, seatbelts and airbags, those things become an ignored liability.
I'm not even sure who the 'somebody else' even is. Public capital markets are how we direct money towards promising things that people want.
Public capital markets are also how we avoid improving things to increase margins. Especially in a modern market with shareholders and administration involved, there's little incentive to improve things or even make them human-safe without regulation. It's why stuff like the FDA exists.
Markets have inefficiencies and reflect collective human irrationality (such as underestimating the likelihood you will be in a fatal car crash). But it is trending better - not especially in a modern market. The stuff the FDA prevented when it was first created is much worse than what it has to deal with today because of better information dissemination and a broadly educated population.
I'm not sure who else would be funding pharma research if not people who are giving their money willingly.
Hmm... yeah. Shame, there's just... no other way.
Say, how often do you travel abroad?
I travel abroad frequently and am an EU citizen. Most pharma research is not funded by the government, in Europe or the US. The EU free rides off of American drug R&D, this is well-studied.
No need to be snarky and sarcastic just because you are having trouble explaining your point.