Burroughs Wellcome Government Perspective Closing Argument

The prescription drug market is best described as a zero sum game where ultimately, the consumer loses at the expense of corporate profits. On orphan drugs like Retrovir, the government provides multiple protections to corporations via The Orphan Drug Act of 1983 (such as marketing patents, use patents, exclusivity, development grants, fee waivers and large tax credits), with the hope that they will act in a socially responsible way in regards to pricing. The primary problem with this type of an arrangement is that there is a blatant lack of transparency from the corporation to the public on price. Corporations constantly claim that excessive pricing is necessary to recoup research and development expenses, yet the content of these expenses are not disclosed. Some corporations include marketing costs as part of the R&D expenses, which artificially inflates the amount of R&D expenses corporations say they need to recuperate, which is a major driver of high prescription drug prices. Inefficient spending by corporations on unnecessary luxuries such as “me-too” drugs add even further expenses that are built into the price of the prescription drugs. Absent of government regulation, corporations will have no incentive to decrease price, and they will continue to act in the socially irresponsible way. We have all agreed that government subsidies are not the best approach. This will more than likely force taxpayers or other sectors like education to make