From that perspective, does any country have their own publicly owned pharmaceutical manufacturer? It's the kind of thing the NHS should do, since they control most other aspects of health care, but I don't think they do.
There's so little benefit to competition with generics, you may as well have that vertical integration to at least provide what hospitals need.
That's an over simplification. Sure Medicare and Medicaid don't negotiate directly. Instead they impose discounts by fiat (no discount, no gov't business).
Look up the 340B program and mandatory Medicaid rebates. They add up to huge discounts.
In most cases Medicaid pays the lowest price of any customer and Medicare often pays the same as private insurers.
It's a fallacy to say the gov't is getting screwed over by not negotiating over drug prices.
To show that it is a fallacy you would need to compare the final drug costs after rebate with an average of foriegn govs that do negotiate rather than private insurers.
the government is not allowed to negotiate at all on drug prices (utterly insane, thank you W. Bush) but insurance companies can, and do, negotiate as a group.
Country-owned means of production have usually not fared well vs competitive forces in the past. And it could be considered as unfair competition: a state-owned manufacturer could basically have a blank check from the government for any kind of investment and would not have to worry at all about profitability. It sounds very nice as a thought exercise, but economical incentives are very tightly linked with productivity.
The problem is anti-competitave behavior though, right? The pharmacutical market is highly consolidated. Trying to rely on some startup to successfully compete in a highly consolidated market that requires a lot of capital and specialized labor isn't going to work, only the government can compete at that level so they should - especially when it is so clearly in the public's best interest for everyone to have access to the services provided by the market.
>Country-owned means of production have usually not fared well vs competitive forces in the past
Currently in the exact markets being discussed ISP markets are in a similar situation. If you look at municipal broadband providers, they has fared very well - providing better service (fiber) for lower costs while protecting the public interest by opting in to net neutrality. Outside of ideological concerns it's hard for me to the problem with the government intervening in stagnant markets by competing directly.
Thinking of it as “unfair competition” implies that companies have some sort of entitlement to a market. They don’t.
If my town wants to have its own fire department, it’s not “unfair” to privately owned fire departments anymore than working on my own car is “unfair” to professional mechanics.
Nationalized production is usually something to discourage for the same reason monopolies and oligopolies should be discouraged--they are insulated from competition in special ways, and as a result in the long run they tend to become inefficient (which in the worst case translates to basically extorting customers).
The root of the problem with American drug companies is that they're insulated from open market competition by a government approvals process that costs billions--only a few companies have enough money to take a new drug to market. The government could reform this process but chooses not to, claiming it's necessary for consumer safety (certainly some kind of approvals process is).
Nationalized producers are generally considered "unfair" because they're usually (always??) tax subsidized in some way. As such, they're not competing on a level playing field with the other players. In fact, the other players are being taxed... to pay for subsidizing their direct competitor!
Now if you wanted to setup a nationalized producer, put a "chinese wall" between it and the State and force it to compete without subsidies or special (favourable) regulations, sure, go for it. But then what's the advantage of it being nationalized to begin with? Anybody could start a non-profit corporation and do the same thing.
Because of the purchasing power of the NHS (enormous) they don't usually run into many problems like described in this thread, although they do happen here. Drug company monopolies need a drug purchasing monopsony to keep them in check.
There's so little benefit to competition with generics, you may as well have that vertical integration to at least provide what hospitals need.