This is a specious argument. AFAIK the cost of synthesizing any pharmaceutical is a negligible component of its retail price.
What that doesn't take into account is the money invested in turning it into an FDA approved drug, and the money wasted on all the other drugs they invested in that didn't pan out.
There are plenty of things wrong with the pharmaceutical industry, and medical care in the US generally, but over-simplified populist arguments about high prices relative to marginal cost aren't helping the situation. There is real complexity and nuance here, and it deserves to be treated as such.
The very real truth is that raising the price of this drug so high incentivizes other people to find competing drugs. It incentivizes pharmaceutical research in general, leading to more drugs, and ultimately more lives saved. That may not make you feel better about what they're doing, but it is a fundamental truth of markets. The more you can charge for something, the more of that thing you're going to get. If you artificially limit prices, you just as surely limit supply.
This is not speculation or philosophy. There are literally investors right now running NPV calculations on how much they are willing to invest in their next biotech startup, and the most significant controllable factor in that calculation is the price they expect to be able to charge for the drug, multiplied by its addressable market. And i'll bet you that the addressable market for lead poisoning drugs is pretty small (same with EpiPens, for that matter - you rarely need them, so most people only need the one, just in case).
Some people like to point to Europe and Canada as examples of places where drugs are cheap and plentiful, and they say that this is proof that this can work in the US too! But that view fundamentally misunderstands how the world pharmaceutical market works. Those drug markets are ancillary. They are fringe benefits to getting a drug approved by the US FDA. Pharmaceutical companies don't use those markets to recoup their costs, they recoup their costs in the US, and then just make whatever extra profit they can in those other places.
If the US market ceased to allow exorbitantly high pharmaceutical prices, the entire business model of Big Pharma would collapse. And maybe it's the case that it should, maybe there's some other model that would be more equitable and successful at developing new drugs. But personally I can't think of one, and unless you've got a bold idea in this vein, i'd be very careful about advocating the destruction of the one we have.
IMO the real solution is to stop letting other countries artificially restrict pharmaceutical prices. Right now the US is subsidizing all of this research for everyone else. You and I (assuming you are a US citizen as well) are paying for these drugs to be developed, and everyone on earth is benefiting from that without having to pay the cost. That is the true inequity here, and if that were removed, we'd see much more reasonable prices here too.
What that doesn't take into account is the money invested in turning it into an FDA approved drug, and the money wasted on all the other drugs they invested in that didn't pan out.
There are plenty of things wrong with the pharmaceutical industry, and medical care in the US generally, but over-simplified populist arguments about high prices relative to marginal cost aren't helping the situation. There is real complexity and nuance here, and it deserves to be treated as such.
The very real truth is that raising the price of this drug so high incentivizes other people to find competing drugs. It incentivizes pharmaceutical research in general, leading to more drugs, and ultimately more lives saved. That may not make you feel better about what they're doing, but it is a fundamental truth of markets. The more you can charge for something, the more of that thing you're going to get. If you artificially limit prices, you just as surely limit supply.
This is not speculation or philosophy. There are literally investors right now running NPV calculations on how much they are willing to invest in their next biotech startup, and the most significant controllable factor in that calculation is the price they expect to be able to charge for the drug, multiplied by its addressable market. And i'll bet you that the addressable market for lead poisoning drugs is pretty small (same with EpiPens, for that matter - you rarely need them, so most people only need the one, just in case).
Some people like to point to Europe and Canada as examples of places where drugs are cheap and plentiful, and they say that this is proof that this can work in the US too! But that view fundamentally misunderstands how the world pharmaceutical market works. Those drug markets are ancillary. They are fringe benefits to getting a drug approved by the US FDA. Pharmaceutical companies don't use those markets to recoup their costs, they recoup their costs in the US, and then just make whatever extra profit they can in those other places.
If the US market ceased to allow exorbitantly high pharmaceutical prices, the entire business model of Big Pharma would collapse. And maybe it's the case that it should, maybe there's some other model that would be more equitable and successful at developing new drugs. But personally I can't think of one, and unless you've got a bold idea in this vein, i'd be very careful about advocating the destruction of the one we have.
IMO the real solution is to stop letting other countries artificially restrict pharmaceutical prices. Right now the US is subsidizing all of this research for everyone else. You and I (assuming you are a US citizen as well) are paying for these drugs to be developed, and everyone on earth is benefiting from that without having to pay the cost. That is the true inequity here, and if that were removed, we'd see much more reasonable prices here too.