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I ran across a story in the acclaimed “medical journal”, International Business Times, about how an old PMS medication from the 60s might be an Alzheimer's cure. Considering the source, I don't put a ton of stock in the story but it was interesting enough to look around a little more. That led me first to wikipedia to learn a little more about the drug in question (sounds like it has nasty side effects), which is when I got totally sidetracked:
Mefenamic acid is generic and is available worldwide under many brand names.[5]
In the USA, wholesale price of a week's supply of generic mefenamic acid has been quoted as $426.90 in 2014. Brand-name Ponstel is $571.70.[15] In contrast, in the UK, a weeks supply is £1.66, or £8.17 for branded Ponstan.[16] In the Philippines, 10 tablets of 500 mg generic mefenamic acid cost PHP39.00 (or the equivalent of $0.88USD) as of October 25, 2014.
The numbers in wikipedia may be extreme, but not by much. Looking online, I see that thirty 250mg tablets cost at least $111 at Walmart. In an almost direct reversal of the quantity and price numbers, one hundred 250mg tablets cost $35 from a UK manufacturer, but to get the drug at that price, you must break Federal law.
The rest of my comment would be a long string of expletives which I shall omit.
(Score: 1, Interesting) by Anonymous Coward on Monday August 15 2016, @03:44AM
The whole story was about generic drugs that are being delivered at much higher prices in the USA than elsewhere. These are already approved drugs.
As for R&D and approval costs, there's no reason those can't be counted into capitalisation of a product line the same way that expenses are turned into capitalisation when a hot internet startup buys expensive chairs and other crap then goes public.
I am happy to grant you that people might decide to sell other drugs - and bully for them should they do so - but trying to paint the problems that you're raising as mysteriously insoluble is to ignore the fact that the accounting world has been facing, and solving these problems for centuries. You're proposing that there are costs that, somehow, don't count as costs? Or can't count as costs? Every dirt-covered farmer in the USA deals with that sort of thing, and has for a long time.
The short answer to what you're asking is: supply and demand carries on as before. We just delineate some conduct as problematic with respect to monopoly law, and consequently place some limits on it. Boom, there's your answer. The details around costs that need to be counted - well, that's why almost every community college in the country has at least a basic accounting course or three. If the FDA places a requirement that certain things be produced and warehoused as a condition for other activities, then the costs of doing precisely that constitute a (regulatorily imposed) cost of production.
And as for companies stopping production right now? Yeah, that's a thing, and the problem there is one, nine times out of ten, of over-regulation. Lighten the regulations, ease the system, and let the companies actually function as such. If you want to put the screws to them so much that it hurts, simply say that if your necessary drug is not available on the market, the IP obviously isn't relevant, release it to the public domain and every compounding pharmacy from sea to shining sea can go nuts cranking it out like candy.