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I wrote this in response to Owen Jones suggesting we suspend the patents on Covid vaccines. There are real problems with pharma market incentives, but if we want *more* vaccines in future, we probably don't want to kill the goose that lays the golden eggs https://unherd.com/2020/11/should-big-pharma-profit-from-covid/
found this interesting: drug prices have an irresolvable tension. They have high initial costs (R&D, manufacturing facilities; ≈$1bn) but low marginal costs (making one dose; ≈$1). To maximise coverage, which is socially optimal, you want to sell at the marginal cost. But …
… then the drug company is $1bn out of pocket and won't make any more vaccines. So you want them to sell at a cost that encourages further R&D. But THAT means they have no incentive to price it at a level that poorer countries can afford. So you need to help align incentives.
with thanks to @owenbarder, @AW_Baker and @_Jeremy_Knox: as always, any mistakes (and there are probably dozens) are my own
this is the problem with nationalising or tax-funding pharma research! It becomes very difficult for a govt to say "we've spent £100m on this but it doesn't work", so they are incentivised to continue to throw good money after bad. Private companies are much more ruthless https://twitter.com/cjpw91/status/1328634843572424704
oh and @timpac has reminded me of this SSC post on generics, patents, brand name drugs, and innovation, which is an excellent read and very relevant to this conversation https://slatestarcodex.com/2016/09/07/reverse-voxsplaining-brand-name-drugs/
