Pharma has the additional problem of inelastic demand. Deciding to purchase a candy bar or not is qualitatively different from deciding to purchase cancer treatment or not. Personally, I extend your idealism to any good that has highly inelastic demand. Using markets to price goods efficiently is not a goal I have in mind when I'm considering the distribution of these type of goods.

Yes, but it is an industry that selects "treatment of symptoms" over "cure of illness" because the former is more profitable.

That's an immoral way to shape demand, one that keeps human beings in states of illness rather than providing cures.

Research into cures isn't funded as much as research into treatments that keep "customers" on the hook for their lifetime.

The problem is that the production cost for a dose of medication (at least as long as it's a chemical synthetization process) is extremely low... but the cost of bringing it to market extremely high. Only a rare fraction of candidates makes it through the first stages of research and validation, and of what remains a large part gets rejected in human trials. All of these trials are expensive, especially the human ones.

And that one successful medication has to pay for all the trials of all the other candidates that didn't make it... and all the low hanging fruits have long been picked. What is remaining now is stuff for rare viral diseases (not just Covid vaccines that work effectively against mutations, but also HIV, Ebola and similars), cancers and multi-resistant bacteria. All of this has been going on for decades and news of actual marketable products are much rarer than news about promising cancer or whatever treatment ideas.

Everyone loves to dunk on pharma (with reasons, see e.g. Skhreli or the bullshit regarding insulin patents), but the core problem is the sheer cost associated with developing pharmaceuticals.

I'm sorry, but i've heard first-hand of instances where drug research is terminated because it looked to yield a cure ... then funding funnled to those that produce a treatment, rather than a cure.

Cures are not profitable, treatments that don't cure are.

So yes, everyone loves to dunk on pharma and should.

I don’t think of it as idealism when the market skews so backwards and people are dying who shouldn’t have. Insulin prices being raised so high that people “ration” doses and have died. It’s a hundred year old medication!

It costs one billion dollar(often much more) to go from zero to market for a new pharmaceutical product. Often there even is no product at the end. Of course there has to be big payday if it succeeds.

I would love world where this would be possible - no gate keeping and no value extraction, only saved lives.

But cynic in me tells me that this is not possible - too many people who know how to build and operate things dreams about having always more stuff and power and is too afraid of loosing it. The consumption treadmill is always hungry for more. I personally am guilty of this - I always calculate how I can accumulate more value so I have a freedom (a kind of power over my fate) and can provide more unnecessary consumption for my family.

Couldn't a pragmatic approach be a market with mix of private and publicly owned companies healthcare/pharma/research companies? Private companies can continue maximize wealth, but now competing with publicly owned companies which have "empathy for the customer". That might lower the prices in the market.

I’ve thought about this. I think one model would be to have successful treatments be “bought out” for public use through an appropriately priced awards process. So the pharmaceutical company would know with certainty that their costs and even profit targets would be satisfied upon success. Have the award process promise 2x their costs, or their costs plus a $somePercent premium above cost. Maybe one option comes with some public grant process along the way. Upon completion the underlying medication gets either publicly produced if market participants don’t satisfy demand and otherwise allowed to be produced by anyone.

I think something like that the government side is more akin to good accounting practices than heavy handed regulatory oversight.

Can you elaborate on where and how that was tried? Seems very interesting.

All of Eastern Europe pre-1989, and most of the same countries for few years post-1989, until they realized this is going nowhere and privatized.

not only eastern europe.

here in Austria we had several companies that were state owned. Problem was, that then there is politics coming into play and hiring is not about business facts but politics.

This resulted in highly inefficient companies as the objectives did not align any more...