Would access to new drugs be reduced if pharmaceutical companies curtailed research due to lower drug prices?
The pharmaceutical industry is one of the most profitable of all industries. Their vast advertising and marketing expenditures are much greater than their spending on research, which is a relatively small part of their budgets.[15] However, much of their research is on “me too” drugs that are designed to capture market share on profitable drugs or to produce a new patent on a drug that is expiring. Usually there are no improvements in the therapeutic value of these drugs. If this research is successful, it will maintain a high level of revenue for the drug company.[16] SB 840 provides for prescription drugs for all California residents. The large increase in pharmaceutical purchases under SB 840 will offset the decrease in drug prices. Pharmaceutical companies will have money to fund research. Reducing administrative and clinical waste will result in more money to spend on providing health care, including research. Research is expected to flourish under the cost-effective single payer
