Anti-Monopoly Basics. Americans must pay the highest drug prices in the world because of the high cost of innovation, or so say lobbyists for big pharmaceutical companies. Yet there is a problem with this argument. In recent years, the prices Americans pay for drugs have only soared higher, even as innovation in the pharmaceutical industry slackens. The average number of new drugs approved each year has declined since the s. The drop-off has been particularly steep since , when 54 new drugs came on line, compared to only 30 in recent years.
How Big Pharma Reaps Profits While Hurting Everyday Americans
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Whereas perfect competition is a market where firms have no market power and they simply respond to the market price, a monopolistic market is one with no competition at all, and firms have complete market power. In the case of monopoly , one firm produces all of the output in a market. Since a monopoly faces no significant competition, it can charge any price it wishes.
In mid-July, the U. State-backed Russian hackers, it was alleged, were poking around the vaccine trade secrets of U. This was framed as a serious national security issue, as if Moscow was seeking recipes for a Doomsday bioweapon and not data related to an urgently needed antidote to the pandemic. When the story expanded to include allegations of Chinese vax hacks, it further distanced the U. On August 4, attorneys general from 34 states and territories published a letter accusing the California-based drugmaker Gilead Sciences of abusing its monopoly on remdesivir, the only approved antiviral Covid treatment.