Comment by loeg

In this metaphor, the car manufacturer only invested R&D in new models because it expected to be able to recoup that R&D spending from my higher purchase price. If I start paying the same low price for cars as you do, the manufacturer stops investing as much in R&D for new models. Your access to new models was free riding on my higher prices.

When we all negotiate lower prices, we get fewer new drugs. Maybe that's better than the status quo (for Americans). Maybe it isn't.