german government wants to control the price of drugs

Wednesday, June 30th, 2010

no, not street drugs, but those produced and sold by pharmaceutical companies. if we at a blog about whatever were socialists or commies, we’d say go for it, that’s a good thing. but perhaps these needs a more nuanced view than that. basically, if the german government were to push through the proposed legislation to control prices on patented drugs wouldn’t this be considered constraint of trade? normally such terms are applied to monopolists in anti-trust lawsuits. but could this term also be applied to a government or a government agency?

angela merkel and the cdu party she leads, are intent on putting a cap on the price of drugs in the germany market. and let’s say germany successfully passes its legislation. now what? well, we think that big pharma will say ‘screw you. we won’t sell our patented drugs in your market.’ because if big pharma were to agree to let the government set the ceiling on prices, then why can’t every one else? the whole snowball could end up decreasing the monster profits of the pharmaceutical companies, minimize the benefits of their patents, and decrease the motivation for companies to invest in the pricey process of research and development to invent new drugs and to create new diseases so that they can create new drugs so that they can market and sell them to the german government.

UPDATE: now we hear that the reason the government has proposed setting prices on drugs is because pharmaceutical companies (allegedly) charge neighboring countries such as denmark and sweden far lower prices for drugs (no, not those kinda drugs!) than they do germany.

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