3 ms·

They do, but with such old generics, the profit per unit would really be peanuts compared to newer fad'ish drugs, regardless of whether they are more effective

by srean 12y ago

They do, but with such old generics, the profit per unit would really be peanuts compared to newer fad'ish drugs, regardless of whether they are more effective than their older kin. Dont have the numbers but I would guess the market price of generic aspirin would have reached the zone shade above its marginal cost by now. A company would spend only so much effort here. The effect is more pronounced for poor man's diseases and health care issues.

wdewind 12y ago
Which would in turn create a massive opportunity for companies like Bayer to undercut the market. The concept that the government would be more incentivized and thus more likely to discover novel uses for a product than it's sellers doesn't really make sense to me.
- corin_ 12y ago
  Really the big difference is that with the government their motivation will always (in theory, of course) be finding the best cure, whereas for businesses it could go either way. Sure, Bayer might have a great opportunity to undercut the market. Alternatively Bayer might have a less efficient but more-profitable drug which incentivates them away from stuff like this.
  - CWuestefeld 12y ago
    with the government their motivation will always (in theory, of course) be finding the best cure Well, that ignores all of public choice theory. Under this model, the entities of government (the politicians, the regulators, the regulatory agencies) only have the incentive to ensure their own outcomes. That overlaps to a certain extent with finding the best cure, but it's far from synonymous.
- CWuestefeld 12y ago
  Much as I love the market (I'm a Hayek groupie), I think there's a free rider problem here. Why would Bayer invest in improving the market for aspirin (paying for research, marketing, etc.) when the benefit of that investment would be enjoy by countless other generic makers, with Bayer reaping hardly any of it?
  - wdewind 12y ago
    But is the government more incentivized? If so why?

by srean 12y ago

wdewind 12y ago

Which would in turn create a massive opportunity for companies like Bayer to undercut the market. The concept that the government would be more incentivized and thus more likely to discover novel uses for a product than it's sellers doesn't really make sense to me.

corin_ 12y ago
Really the big difference is that with the government their motivation will always (in theory, of course) be finding the best cure, whereas for businesses it could go either way. Sure, Bayer might have a great opportunity to undercut the market. Alternatively Bayer might have a less efficient but more-profitable drug which incentivates them away from stuff like this.
- CWuestefeld 12y ago
  with the government their motivation will always (in theory, of course) be finding the best cure Well, that ignores all of public choice theory. Under this model, the entities of government (the politicians, the regulators, the regulatory agencies) only have the incentive to ensure their own outcomes. That overlaps to a certain extent with finding the best cure, but it's far from synonymous.
CWuestefeld 12y ago
Much as I love the market (I'm a Hayek groupie), I think there's a free rider problem here. Why would Bayer invest in improving the market for aspirin (paying for research, marketing, etc.) when the benefit of that investment would be enjoy by countless other generic makers, with Bayer reaping hardly any of it?
- wdewind 12y ago
  But is the government more incentivized? If so why?