[ch4s3]

> what works so well in Canada and most of Western Europe is right now R&D into pharmaceuticals is largely financed by the opportunity size available in the US market. If you were to just adopt the centralized model tomorrow R&D would grind to a stop

This is really hard to explain to people.

[AnthonyMouse]

> This is really hard to explain to people.

It's not that it's hard to explain, it's that it causes people to want to switch from the US system even more, because as soon as you understand it you realize that US patients and taxpayers are being unfairly forced to subsidize more than their share of drug R&D for Canada and Europe.

[ch4s3]

To quote your sibling comment:

>Probably because saying something is "financed" by demand is counter-intuitive.

Since Healthcare is in economic terms a superior good, people spend a larger share of income on it as their income rises. And because the US is such a large, wealthy market, demand is sufficient to to pay down R&D costs that other markets could no bear. It's still a shitty deal, but it makes perfect sense that it turned out this way. That's just hard to articulate to people who are not familiar with the industry or economics.

[AnthonyMouse]

That's not it though. Canada and Europe are not poor.

The problem is that drug patents are fundamentally incompatible with single payer. The premise of the patent system is that you get to charge outrageous monopoly rents temporarily in exchange for creating something that didn't exist. If you have a monopsony buyer setting prices then curing cancer isn't as profitable, so companies spend less money on research and long-term more people die.

There is another way to fund medical research. Tax dollars. But if you're paying for it with tax dollars then patents are waste; the research happens regardless because the government is paying for it. Then you lose the "market efficiency" -- people have better incentive to succeed without wasting money when they only get paid for succeeding and the money they waste is their own, than when they get paid either way and are spending someone else's money. And then people die because you spent more money curing fewer diseases.

But for the patent system to work, you need the patient to pay the monopoly price, not the government or a monopsony insurance company. Otherwise they can use their market power to pay less than what the drug is worth. Or worse, pay more than it's worth over alternative treatments because they're spending someone else's money or are victims of regulatory capture (as in the US). Either of which destroy the efficiency the patent system is supposed to bring and make it so that we might as well not have it.

[rhizome]

Probably because saying something is "financed" by demand is counter-intuitive.