Comment by braingravy

So, the premise is high drug costs in the US subsidize drug prices in the EU.

Presumably this conclusion was arrived at because pharma companies sell drugs at a higher cost in the US than they do in EU, Canada, or anywhere else. Therefore elevating profits in the US relative to profit margins in other nations. (Note: they reportedly use the profit to develop new drugs, so this is where the subsidization comes into play, as higher profit markets will drive increased revenue and future drug development.)

And your argument against the premise is: 1. The EU is not at fault, and 2. Drugs cost more in the US because of the poor healthcare system.

Argument 1 does not attack the premise: Undoubtedly the EU is not at fault, the EU does not set drug prices in the US. Pharma companies do, within the context of the US economy, of course.

The premise does not assign fault, it’s an assessment of where profit comes from.

Argument 2 is more direct in addressing the premise, but still misses the point: you might be right, mostly right, or you could be wrong. I lean toward agreeing with the point you made (US healthcare system sucks), it doesn’t address the profit differential across different nations.

So, what about the premise is weak and incomplete?

Pharma shareholders want profit, and the US supplies that at a greater rate than the EU (likely due to the regulatory environment). They’ll take a lower profit margin vs. no profit at all, so they operate accordingly.

None of that goes against the premise that the extra profit from the US market is subsidizing the research costs for drug products that enter the EU market.