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Sometimes Walmart goes to a manufacture and says "We want to buy all of your output for the next 3 years, here's exactly how we want you to modify the product,
by bradleyjg 13y ago
Sometimes Walmart goes to a manufacture and says "We want to buy all of your output for the next 3 years, here's exactly how we want you to modify the product, and here's the quality assurance tests you need to do. Here's what we are going to pay." Walmart pays them some percentage up front and then over time as product ships and sells.
Is Walmart paying for the QA testing?
- DaveWalk 13y agoIf I understand your analogy correctly, Walmart is Medicare, and the manufacturer is a drug company? If so, then said QA testing is not a guarantee; you cannot design a drug that will extend the lives of patients with end-stage cancer like you design a grill. It'd be like there was a government agency that compared the manufacturer's new grill to all other grills on the market, and only let the manufacturer sell theirs if it had a clearly defined benefit over the others.
- bradleyjg 13y agoI guess I didn't make my point clearly enough either time. The government pays for the early research, sets all the ground rules for the drug trials, and -- as the drug companies' biggest customer -- ends up ultimately shouldering much of the cost of those trials whether successful or not. The government certainly has the financial wherewithal to fund stage 3 trials, $100M a pop is a rounding error on federal spending or even on just federal medical spending. So why not just go ahead and do so? Why the farce with pretending there's a healthy drug market when the government is driving so much of the process? Let's just admit this is a market failure of the public good variety, like firefighting and roads, and have the government provision it.