If you think pharma is asinine now, imagine what it would be like if they could just sell whatever they want.
No reason someone couldn't pay for drugs undergoing early development.
Have to disagree with you there. Here are a couple:
1. Which drugs are "newer and potentially more risky" and which are just straight up snake oil? Should both be allowed on the market, caveat emptor? How do you tell the two apart?
2. If you own a new potential drug, why even bother finishing clinical trials? You're much better off doing small trials on random molecules until one looks "promising" and then putting it up for sale. So long as you don't do more research (which would just prove that your promising drug is actually crap), you can just keep on selling it.
3. If you need a new drug, would you buy a "promising" drug or participate in a clinical trial where there's a 50% chance you will end up in the placebo wing? Would you maybe decide to do both and just not tell the folks running the trial about the other drug you are taking, thus messing up the trial? A lot of drug development efforts stall because they cannot enroll enough patients. This is especially true for cancer drugs.
Basically it boils down to this: Imagine there are 10 new drug candidates for a particular cancer that have made it through Ph 1 clinical trials. 1 of them is actually a drug worth taking, the rest would prove to be failures if they are tested sufficiently. If you let people sell unproven drugs then 10 years from now all 10 will still be on the market. 10% of the people will be getting the best drug available, 90% will be getting prescribed the failures. The little dribs and drabs of data that come back about the prescriptions won't be statistically powerful enough to figure out which drug is the good one.
Remember that, to corporate management, scientific research appears to have a record of 90% failure; i.e., 90% of funded research projects fail to produce a patentable and marketable product.
Oh, they're pretty much 100% successful at creating patents. The patents get filed before the clinical trials even get started, for the most part. It's the "safe and effective" hurdles that trip everyone up.
What is wrong with the production process at the brand name companies that they cost so much more to make?
Could you give some specifics? The specifics I can think of are that offshore generic drug factories in 3rd world countries were historically not inspected very often or very thoroughly by the FDA. So they faked quality control and shipped a lot of garbage. Hence the $500M fine for selling adulterated statins that Ranbaxy caught.
There's less incentive to work on PROFITABLE drugs and work on IMPORTANT drugs. (Think cures for cancer instead of Viagra.)
And that's what Pharmas spend the most R&D money on: oncology drugs. After that it's CNS (neurodegenerative diseases like Alzheimers), and then cardiovascular. Which is what viagra was originally being developed for: cardiovascular problems like angina and hypertension.
As to unreasonable profits: What rate of return would convince you to put your money in an investment if you knew it was going to be 10 years before you received the first dollar back - and there was a 90%+ chance of failure to boot?
If Company B cures the disease, then Company B gets paid until nobody has the disease then Company B has to invent a new cure or go out of business.
At that point company B has made more money than all of the treatment manufacturers were making combined. It set a high price for its cure, everyone bought the cure. If the disease was Diabetes, they grossed 2 trillion dollars, easy. At that point B could just buy Google or a medium size country if they still felt like they needed something to do.