Stiglitz rightly points out that not all drug companies spending goes towards what many would deem the noblest causes: finding treatments and cures to life threatening diseases. Some goes towards ‘lifestyle’ drugs and other money goes towards advertising. This seems inappropriate given the serious challenges at hand. But it is really that bad?
Suppose for every dollar spent on advertising, a given drug money received $4 in profits. Would it not only help the company become more profitable but also lead to greater money set aside for research and development? A similar argument could be made the ‘lifestyle’ drugs. One could retort that drug companies may only have incentive to develop these ‘lifestyle’ drugs and more aggressive advertising, but I don’t buy into that logic. There is plenty of money to be made solving serious diseases such as malaria and HIV. Not only will people themselves buy them, but governments will spend large amounts of aid funds on these drugs, in addition to philanthropic organizations (if there was an HIV vaccine tomorrow, the Bill and Melinda Gates fund would buy plenty of them and distribute them around Africa to those who wouldn’t otherwise be able to afford them). My point is that while some behavior of drug companies may seem selfish or wrong, they may contribute to a larger good. These issues are tricky, and firmly grabbing a hold of something and declaring it wholly good or bad can be a challenge given a closer look.
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