Yes, but that is factored into the price. For those criticizing Eli Lilly and Novo Nordisk, I'll quote from Philipson, et al., Policy Brief: Government Price Controls on Obesity Drugs (2025) [
https://bpb-us-w2.wpmucdn.com/voice...ief-Price-Controls-on-Obesity-Drugs-Final.pdf]. I will note that Eli Lilly did contribute money to producing the Policy Brief, nontheless I believe most of what it advocates.
"[A]dopting government-controlled pricing in the US would harm American patients far more than similar policies impact patients in other countries. Many foreign countries do not have an innovation access tradeoff in setting price controls, as innovation is driven by global sales which a small country does not affect much. In contrast,
the US, as a large and wealthy country, contributes 64-78% of global earnings from drug development, despite being about 25% of world GDP (Goldman & Lakdawalla, 2018; Kose et al., 2017). Currently, the US benefits from high demand for pharmaceuticals, which enables quicker access to new treatments as well as a wider variety of options for patients.
A reduction in US earnings, such as when adopting foreign price controls, would have significant consequences including a decline in total pharmaceutical innovation. This could ultimately result in dramatically diminished benefit for US patients, who would face limited access to cutting-edge treatments and fewer options overall." (Emphasis added.)
My personal belief is that the US should engage in negotiations with Eli Lilly and Novo Nordisk about lowering the prices of these drugs and may have to threaten to change patent laws in doing so. The ultimate goal would to make sure that these companies make large amounts of money but that the money goes a long way. For instance, the price might be lowered to $225 for four weeks of these drugs, but insurance companies would be required to cover them for pretty much everyone who will derive significant benefit from the drugs. The lower prices paid but greater access to these drugs should reduce other health care expenditures and comes closer to making these drugs cost effective. The US government could go farther and not allow these companies to make a killing, like they're doing now. But it's good that they're making a killing. Right now, drug companies are racing like crazy to work on these types of drugs. Most of the drugs they're working either won't be approved by the FDA or, if approved, won't recoup enough money to become cost effective. The drug companies are gambling that a drug will be cost effective. However, if the company knows that even its successful drugs will only generate what government bureaucrats determine to be a "reasonable return," then it becomes far less appealing to invest in drugs that, for the most part, won't be approved. For those for whom tirzepatide works great, that won't hurt you. Yet far too many people receive inadequate results from these drugs. Many people stop taking them due to side effects. Many people hate the idea of injecting themselves. Also, if the government invalidates the patents or acts too roughly in forcing cost reductions, that makes companies less willing to invest in drugs. I understand the argument that the US shouldn't pay more than the rest of the world. However, considering that the 64-78% of global earnings for drug development comes from the US, a large decrease in what the US pays will lead to the drug companies spending far less overall. That will negatively affect the US and the rest of the world.
I'm being at least borderline hypocritical here: I speak of the virtues of capitalism and patents. Yet I go ahead and buy on the grey market. I abide by the philosophy that one can't be hypocritical in one acknowledges one's own deviation from one's stated beliefs. Chalk that up to me being self-centered. However, investors too are self-centered. They invest because they want to make money. I'm not going to invest in a company that's working on a drug that may benefit million or could result in huge losses unless I expect that any successes may pay handsomely.
I am. I think it was Shakespeare who said something like “Discretion is the greater part of valor”
