Are we worried about cutting into their profits? If we are bringing in generics will do the same thing. Businesses all the time get volume discounts, are they then fixing prices?
No, it will not do the same thing - The dynamics are different. The thing you will be missing is the volume supplied by their competition. That physical product is what drives the price down, because supply outweighs demand.
In your scenario, dictating the profit margin occurs without altering that supply. The demand stays the same, and the company, with a patent-protected market, can alter their provision to that market without any fear of competition - And that will undoubtedly occur in the exact formula to maximize profit from that market - less profit, less response to provide supply... No competition to respond to that supply. The sum of that formula dictates shortage. Your view is naive.
And patents are fundamental to our system of govt. It doesn't mean we have to pay exorbitant prices because they have it. We are only asking them to compete on a global scale.
YES, in fact, it does. You can ask all you want. It means nothing. Business responds to the bottom line. If the product loses its profit shine, there is no force to make the company continue to manufacture. And rather than creating a product they are going to lose money on (or rather, a vastly reduced profit margin... to wit: the same.), they will invariably stop making the product, and shortage will occur.
The result is nothing prophetic - It's a simple lesson of supply and demand. Supply less in a demand market, the price will go up to provide the missing profit. In this case, the profit is removed without remedy. That leaves the company free to quit production.
And then invariably, the government will step in to require the company to make more product at a loss until the company cannot sustain itself and goes out of business... which is when the government steps in 'for the good of the people', and takes over production to provide the missing product.
Since government is otherwise oriented, the product suffers, becoming the cheapest, crappiest thing the government can produce...
This is the way of socialism, and how it works every-stinking-time.
That is how it will play. And this step right here is irrevocable.
What's the difference then to their profits if we demand the volume price breaks we should get?
Without competition to supply the product, volume will go down as the company struggles to maintain its margins. The obvious way to do that is to shorten production, which means shortage will occur. That's not a prediction - It's a near mechanical response. That's what WILL happen.
There are no price controls. No prices are fixed. If the lowest price charged to a foreign country goes up 20%, then our prices go up 20%. There is no fixing of a prices to an exact dollar amount, unchangeable. We are simply talking about the global equalization of prices and getting volume pricing like any other business.
Sure, except you are limiting them to the profit they take in say, Zimbabwe, where the pill sells at a significant hit. Then by the way, the price they can command in Asia and Europe becomes much greater than they can get here, so they send all their product where the best profit can be had - So that means shortage here. This math is simple.
Which would be the same effect here if they had no patent. Again, just because they have a patent doesn't mean they get automatic price protection. We are simply telling them they have to compete here like everywhere else. If that's price fixing, then businesses do it all the time.
YES, it DOES mean exactly that. That's what patents DO. Patents are a price protection mechanism that is meant to give a company room to grow by protecting its market. So the company can command a premium price in a protected, non-competitive market, which allows the company to recoup the costs of innovation, development, engineering, and etc, which they have risked at the front of the venture.
That is why patents are there. That is what they are for.
We could do that with a majority Congress willing to do so, but we don't have decades to wait for ideal solutions. Loosening patent controls would have the exact same effect as negotiating volume discounts, except they don't have to lose their patent. The net effect is the same.
The net effect is NOT the same. You will get your cheap drugs. Then you will get shortage, and those drugs will not be available. That's how this will go. Inevitably.
Welcome to Socialism. You are ushering it in. With bells on.
