In areas the mafia doesn't exist (an analogy the title makes by calling it a racket), the cost of paying the mafia is $0. So it might be £30/vial no mafia fee in the U.K., and the same + $10,000 mafia fee in America.
However, doesn't some of that mafia fee go toward R&D? (Developing new drugs)? Why isn't the price to the NHS slightly higher, also in part to fund research?
It's hard to imagine $10,000 just gets pocketed by Don Carleone, without any of it going back to the laboratory.
> Why isn't the price to the NHS slightly higher, also in part to fund research?
The NHS (via NICE) sets a standard amount that it is prepared to pay for any treatment based on the QALYs (Quality Adjusted Life Years) it results in. So really a non-generic manufacturer can charge whatever they like, so long as the end result is worth it. In a sense we don't eliminate the mafia, just set the terms of engagement under which they have to justify their pricing. Whether they take that money and spend it on R&D or dividends is the vendor's decision.
I'm trying to figure out if the cost in Sweden (or UK NHS) is using the older recipe so the a valid comparison. If so the US Walmart product isn't so different. I'm trying to compare like with like.
thrwawayjun|6 years ago
However, doesn't some of that mafia fee go toward R&D? (Developing new drugs)? Why isn't the price to the NHS slightly higher, also in part to fund research? It's hard to imagine $10,000 just gets pocketed by Don Carleone, without any of it going back to the laboratory.
Is the analogy really sound?
jsty|6 years ago
The NHS (via NICE) sets a standard amount that it is prepared to pay for any treatment based on the QALYs (Quality Adjusted Life Years) it results in. So really a non-generic manufacturer can charge whatever they like, so long as the end result is worth it. In a sense we don't eliminate the mafia, just set the terms of engagement under which they have to justify their pricing. Whether they take that money and spend it on R&D or dividends is the vendor's decision.
rb808|6 years ago