4 ms·
Disagree, it does distort the market because it increases the monopsony power of the overseas purchasers. With zero frictions between the cross-border trade in
by dcolkitt 8y ago
Disagree, it does distort the market because it increases the monopsony power of the overseas purchasers.
With zero frictions between the cross-border trade in prescription drugs, a drug manufacturer would have to set a uniform worldwide price for their drugs. Otherwise if they sold to France cheaper than they sold to the US, then US consumers would simply import the drugs from French vendors instead of paying the US list price.
- dd36 8y agoGreat point.
- dantheman 8y agoAnd that's perfectly fine - we allow that for all sorts of other products. Will it cause the cost of healthcare in France to go up? Probably, but I don't see how that's a problem for the US.
- scarface74 8y agoHow is that different than any other good where people can arbitrage?
- JamesBarney 8y agoThey make so much money in the U.S. this would probably be more effective at raising world drug prices than lowering U.S. drug prices.