[pvelagal]

I have an common sense observation and questions. Apple, Microsoft etc you name it, all get their hardware products manufactured in china & Asian countries mainly to drive down costs (People blame CEOs but really ? do they have a choice ? Will wall street show mercy on them ? It is easy to forget that US consumers are the primary beneficiaries, and Wall street is happy - means - 401ks, IRAs of regular US citizens grow ! ). How come pharma companies dont follow that model and drive down the prices of drugs/medicines ? How come healthcare providers dont use "globalization" for cutting health care costs where apparently it matters the most ? One can live without iphones or electronics, but cant live without necessary medicines or proper healthcare. Without driving down drug prices or hospital costs, how can healthcare problem be solved, no matter what system is used ?

[orclev]

Mostly because the cost of drugs isn't dominated by manufacturing costs the way it is with electronics. The vast majority of the cost of a drug is in the development of it. Further, of the costs for developing it, the cost is split fairly evenly between paying for the skilled researchers who actually do the development, and the administrative costs of testing and certification. As for the actual production of the finished drug, that is off-shored for savings, but since most of the cost of the drug is actually going towards offsetting the massive piles of money poured into researching and developing not just that drug but to offset the costs of all the failed drugs, reducing the actual production cost barely moves the needle.

The above is of course talking about newly developed drugs. There is however a rather disturbing recent predatory practice some drug manufacturers have started to engage in of either purchasing an existing drug and jacking up the price if they're the sole manufacturer, or else making a trivial change to an existing drug and then re-releasing it at massively inflated price. In either case the effect is the same, they're selling a drug that has no appreciable research costs associated with it, just the manufacturing price, but they're continuing to charge as if they were having to offset the research costs and they get away with it because that's what people are used to.

[dmoy]

It's not a commodity good (in part bc of drug patents). An iPhone may cost more in Asia, but drug treatments are way cheaper. The comparison doesn't really work.

[hkmurakami]

Your conflating cost based pricing and market based pricing.

None of the players above (including apple) engage in cost based pricing. They all charge the price that maximizes their profits, not the price that sells the most units while breaking even.