HSEM3414H: Setting Prices on the Priceless -- The Moral Arithmetic of Pricing Prescription Drugs

In the 1930s, antiwar activists used the epithet “merchants of death” to denounce armaments manufacturers and their financiers. In a curious twist, today it is the turn of what might be called “merchants of life” – for-profit drug companies which have saved hundreds of millions of lives – to be a pariah industry. The rage against drug companies is bipartisan. In the 2016 Presidential race, Trump said that drug companies were getting away with murder and Clinton charged that they were making a fortune out of people’s misfortune. The main complaint against drug companies is, of course, that they are price gougers. They abuse their government-enforced monopolies to charge extortionate prices that deny some Americans access to treatment for life-threatening illnesses, bankrupt middle-class Americans, and place intolerable strains on state budgets. This seminar will use a cure for hepatitis C (Sovaldi) to evaluate the claim that drug companies charge exorbitant prices and (optimistically?) to try to answer the question of what is a just price for a life-saving drug. Or, in other words, how should we price priceless goods? Note: In fall 2022, this course will be offered as an A-Term 2 credit course.

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