Friday, December 23, 2016

Hmm The "Trump Technique" of Increasing Competition Might be What He Does to Lower Drug Prices

Hmm he seems to be doing this for Boeing vs. Lockheed Martin but he could easily use it for drug prices.
One thing I always like to do like if I'm selling something or if I'm trying to rent something, I always like to create competition because it makes you feel better. And sometimes it's even a perceived competition. But the other side should know there's competition.
What could this mean for drug prices? I think he might either cut the patent length of a drug from 20 years to something quicker. He might also cut down the exclusivity of biotechs from the 12 years they have now. This would be a disaster for the entire drug industry because if will be hard for many drugs to recoup their development costs if they didn't have a long period of time in which to sell them. Margins will be squeezed all over the industry and most investigational stage biotechs would need to close their doors because making just one or two drugs will not be very profitable at all.

However, if this move corresponds to a quicker path to market that his new FDA chief might be into it might all might come out in the wash. If a company can bring a drug onto market with like 18 months of investigation that mostly revolved around safety then they don't need a billion dollars and nearly 12 years! to get from lab to market. The drug company will have recurring costs of investigating ongoing efficacy but that can be handled much easier as more drugs come onto market at a quicker pace.

The law of the marketplace would weed out the weak drugs and the companies that sell them. Then the more efficacious drugs will still sell very well and rise to the top. The drug industry will more reflect other industries in which competition keeps prices lower. But the result would be R&D spend would go down and margins would shrink but more drugs would be floating around for each malady. 

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