Economics really is everything... (Score 1)

Sorry, but that just isn't true. The truth is that identical drugs, made on identical lines, cost more in the US than they do in Canada. Why? Simple: the prices in Canada are negotiated by customers who have the time to study the actual costs of production, and who aren't desperately begging for the treatment right now. The result is drug prices which are genuinely negotiated between producer and consumer, rather that prices set by a producer with no feedback from a market.

God I hate people who get so wrapped up in their own BS that they believe it. ;)

The reason that drugs are cheaper in [insert non-US country here] is plain and simple that profit maximizing entities are taking advantage of 3rd-degree price discrimination.

The costs of R&D need to be recovered and that is amortized into the US prices- After that point anything down to the actual marginal cost of producing the pills (pennies) increases profits. International borders are very effective ways to segment a market, and the government does the expensive work of preventing reselling... Get it?

Monopsony in an 'information' market (drugs are nearly such, all the expense is in R&D, with marginal production being nearly free) means a lower than competative price. Additionally, other countries don't have the same demand for drugs, nor the same marginal product of labor, and hence they won't pay as much for drugs in a competative market. The point is that they don't pay enough that the drugs would ever be developed. If we lower our prices, without being able to raise theirs, then we need a new way to stimulate innovation.... In essence we are decreasing the social-losses due to the patent-monopoly, but unfortunately outside our borders.

The question of 'what is the correct level of drug reasearch' is a totally different question.

PS I don't like the current patent system, and I got my ass smacked in my graduate Industriual Org class when I tried to posit some 'better ideas.' It really isn't just a political clusterf*ck, it's a really complicated problem.... The fact remains that this is more an example of how socialized medicine, as-exists, only works because someone *else* pays for it... In this case the US pays for foreign healthcare.