| Summary: | In a humorous debate with Prof. Epstein as both debators and the moderator, this talk focuses on two recent major developments in the pharmaceutical industry; the first concerning international issues with compulsory licensing for drugs with U.S. patent licenses because of an inability to agree on price agreements, and the second about legislation to allow reimportation of drugs manufactured in the U.S. from foreign countries, such as Canada, back into the United States at overseas prices. Does this mean that America is subsidizing foreign countries' development of drugs or should the United States do more to assist the third world? In the free-enterprise system, with its respect for property rights and intellectual property, development of new pharmaceuticals is being taken advantage of by other countries which can issue compulsory licenses and then reproduce the drugs through generic manufacturers, undercutting the U.S. market. On the other hand, third-world countries lack the resources to develop expensive drugs or to purchase them at competitive prices. Poorer countries need essential drugs to be made available to all that need them at prices they can afford, and if the U.S. won't voluntarily lower prices, governments must use what tools they can in order to make drugs affordable. The pharmaceutical industry has the highest profits of any industry. The moderator explains how Ronald Coase summarized the problem (with bridges, but it applies to drugs) by showing how high-front end costs will be distributed in areas where open pricing is allowed and in areas less open, the developer must settle for a lower cost.
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