First, the cost to the American consumer of product development is huge. There are basically two costs in the production of drugs, for example. The development costs, research, patenting, safety trials, etc. These costs are huge. Then there’s the cost of making the pills, which is almost nothing. For the sake of argument let’s call the cost of making a pill basically zero — pure profit.

Well, any additional pill the drug company sells means a marginal addition to profit. So, if the British NHS says, we’ll pay you 10 pence per pill, then the drug company is likely to take it because that’s 10 cents of pure profit. Ditto for all the socialist health programs.

The US cost, on the other hand, which is determined largely by the market, in this theory underwrites all the development and research costs. So, the cost to the American consumer is the entire R&D, which is to say billions and billions. And the different amounts spent in the US versus other countries pretty much bear this out.

I long ago said that we fix this free-rider problem by mandating a legal cap on drug prices equal to the median price the drug is sold for in other OECD countries. This would make the drug companies play hardball with the NHS and French health services in price negotiations.

Second, FLG is a winner, like Vince Lombardi, and associates with them. Not with people who lose duels.