Yves Smith of Naked Capitalism reports:
A new and interesting line of attack has been opened against Big Pharma’s defense of its high US prices and its ongoing attacks on Europe and other countries that negotiate discounts. US drugmakers have contended that the rest of the world is effectively free-riding on US research, and that its inability to charge higher prices outside the US limits funding of R&D (ahem, have we forgotten the fact that most really big ailments already have treatments of some sort, making it much less likely that anyone will find a new blockbuster drug?).
But a more granular look at drug pricing within the US shows that drugmakers offer enough discounts here to undermine their attacks on non-US health schemes. And the foreign drug regimes at least assure that everyone in the population is on the same footing, while here, the highest prices fall on those either outside health care plans or in ones without favorable drug pricing, so the burden of higher prices falls disproportionately on lower income people.
Smith quotes the Financial Times, which calls the revelation "an embarrassment for the industry, and notably PhRMA, its powerful Washington, DC-based trade body. In the past PhRMA has argued that Europe’s ill-conceived public policies, including price controls and sluggish regulatory decision-making, have chilled innovation and raised doubts among private investors who help to underwrite research."
McArdle merely parroted whatever Big Pharma told her. They told her what to say, she wrote it down and printed it, and her job was done, except for all the funny posts defending the indefensible. She's a perfect example of the modern journalist, bought and paid for by corporations and without the slightest bit of awareness that they are merely stooges in a giant confidence game.
Big Pharma came out with a study of their own, of course, this one saying that drug price cuts in Europe will harm innovation because there will be less profit for drug corporations. This issue has been discuss a lot as well, since such studies ignore the role of government in drug innovation, as well as how much innovation actually goes on in drug corporations.
I wonder which study McArdle will address, if any. If I were her I'd just let the matter quietly die, but discretion has never been a McArdle virtue--thank goodness.