I don’t get this argument about drug prices and insurance companies over charging. If this were a true market economy would this not create an opportunity for other companies to come in an undercut them? The problem is that it’s an overly intervened market that restricts competition.
No, drugs have patents on them (for a number of years) and, during the period of the patent, no other company can make that drug (for example, it now costs $80,000 or more to get the drug that cures Hepatitis C in two months). After the patent expires, your argument holds. But, even then, foreign governments will squeeze the generic companies down whereas our government Medicare pays what the companies ask (we don’t want to be “socialistic”) and our insurance companies don’t have the same clout as governments do in regard to private patients. It is because of these factors that US consumers are subsidizing world wide health care. We are paying the $80,000 for Hepatitis C (before other nations’ patients do, thus contributing to the R&D process) and we are paying much more for the generics once the patents expire.
