Kevin Drum writes
Today, Aaron Carroll tells us the story of TriCor, aka fenofibrate, a cholesterol drug licensed by Abbott Labs in 1998. Unfortunately, TriCor’s patent was due to run out in 2000 and a maker of generic drugs was all set to produce a generic version. So Abbott sued, which delayed the generic version by 30 months:
. . .
The cost to American consumers of not having access to a generic version of TriCor is on the order of $700 million per year, money that (presumably) accrues to Abbott Labs instead.
This is a part of a longer point but its important to note that its not clear that health care costs were raised as a part of this.
There may have been deadweight loss, though given widespread health insurance and government payment plans its not clear the deadweight loss is that great.
Mostly it seems that at worst money was transferred from consumers and taxpayers to TriCor. This is not an economic cost. It is simply redistribution.
So, one concrete problem that you might have with the US health care system is that it serves to redistribute income in ways that you do not like.
That’s a real thing. You could say, I would rather have the money than Abbot Labs and I understand what problem you face and we can talk about solutions.
However, as generally used the phrase “high health care costs” doesn’t refer to anything that makes any economic sense and so its not clear what the appropriate remedy is.
I would like to encourage people to be more explicit about the real problems that they perceive rather than extensive references to large scale accounting issues.