Should drugmakers offer deep discounts to developing nations?
Unequivocally, yes–and not just for humanitarian reasons. “The economic theory and evidence is clear: Differential pricing can benefit consumers in low-income countries without harming–and perhaps even benefiting–consumers in high-income countries,” observes Dr. Jonathan D. Quick, director of essential drugs and medicines policy at the World Health Organization. Here’s why. Most drugs cost only pennies per pill to make. Selling them cheaply to poor nations therefore costs drugmakers nothing–and can even bring in profits that help support new R&D. “It’s win-win. Drugmakers would be doing good in the world, creating markets–and making marginal profits,” explains Barry R. Bloom, dean of the Harvard School of Public Health. O.K., but does this mean Americans are shouldering the burden of paying for R&D through high prices? Yes. And Americans may actually be paying a bit too much–as we’ll see below. But at the same time, the U.S. gets the benefits. Even at today’s prices, with the nat
