If pharma companies lose revenue, they have to cut something

> Some people propose things like "the government should fund drug development". OK, that's a fine proposal; it has pros and cons. Not only that, it's complementary to private investment. Did public investment produce a valuable new drug? Great! Make sure the law doesn't allow anyone to patent drugs developed entirely with public funding so it immediately becomes a cheap generic. But if a different drug is developed with private financing under the assumption that they'll get returns during the patent term to justify the cost and risk, well, that's why they're doing it. And paying a higher price for that drug is better than not having it all, or else why is anybody willing to pay the higher price for it?

But doesn’t the high price come, largely from government blessed IP creating an artificial monopoly? Controlling prices in the context of a created monopoly makes some sense to me. But yes, balancing incentives is critical.

Pharma spends more on marketing drugs than developing them. If marketing drugs is prohibited, especially through dubious kickback schemes with doctors and hospitals, there'd be a lot more room for lowering prices. The profit motive really doesn't deliver great outcomes in medicine, between the enormous information asymmetry between patient and doctor (and even other doctors), doctors with perverse financial incentives, and believing (whether it's true or not) that your life or wellbeing are on the line if you're wrong, it's ideal for all sorts of chicanery. (/rant)

Profit is revenue minus costs. How many of those “costs” are things like private planes for executives? How much for reps that visit doctors and give out free samples and swag and tickets to Cancun? Famously some major tech companies aim to have zero profit as they want to reinvest everything back in the company. It doesn’t mean they don’t have any wiggle room to drop prices.