Yes, but there's a limit. Incentives have diminishing marginal returns. At the end of the day, a $2B pharma company is still going to doggedly pursue a 20 year monopoly on a potential $1B drug, even if it otherwise would have been a $1.5B drug if there was no Medicare for All. Moreover, the vast majority of waste in healthcare is with hospitals, administrators, surgeons, insurance companies, and doctors, not the pharmaceutical industry.

Pharma is closer to software in that one company can produce one product with zero marginal cost that can trivially serve everyone on Earth with a given condition. We can even leave Big Pharma as is and still realize hundreds of billions in savings, though I still believe that there should be some single-buyer negotiation for drugs. We can use empirical evidence to negotiate on drug prices without drastically changing the incentive scheme. Ultimately, I believe pharma companies would increase prices abroad if we implement price controls in the U.S. The U.S. is subsidizing the world's healthcare.

Doctor/surgeon labor scarcity exists for the following reasons:

- Medical associations lobbied the government to restrict residency positions a long time ago, and continually lobbied to keep them down until just recently when the shortages have become too obvious. They were even warning of an impending doctor surplus in the 90's. Ya, right.

- Medical associations and med schools have been smart about restricting the supply of doctors through our med school network and excessively tedious licensing system.

Additionally, the other OECD countries I've referred to have similar health outcomes for a much lower % of GDP. Clearly, universal healthcare did not worsen their population's health. If someone wants quicker healthcare, I'm almost certain the U.S. would allow supplemental insurance to get that hip transplant in 2 weeks instead of 6 months.

The problem is they don't know it's a $1B drug instead of a dud until they've actually done the research, and most of the candidates fail. And since the successes have to cover the failures, if the successes make less money, they can't cover as many failures and you don't get as many attempts.

> Moreover, the vast majority of waste in healthcare is with hospitals, administrators, surgeons, insurance companies, and doctors, not the pharmaceutical industry.

It is certainly a multifaceted problem and there is plenty of inefficiency that could be improved. Not just healthcare, but also the plague of zoning rules that inflate real estate costs in cities. Which is where hospitals are for legitimate reasons, but hospitals not only need a lot of real estate, they also then have to pay salaries there that allow their (already expensive) staff to live within reasonable distances.

And the subsidy issue isn't just drugs, it's also technology. A lot of the "hospital" cost goes to equipment, which is the same subsidization of international R&D as drugs -- other countries with price controls not paying their share of the cost.

Which is why cost comparisons to socialized systems in other countries are so uninformative. Not only are they not paying their share of R&D, they typically have lower real estate costs, lower salaries across all industries, lower (and this one surprises a lot of people) taxes if you count "health insurance" as a tax, and it goes on.

There is a lot of pure inefficiency in the US healthcare system -- the level of bureaucracy is madness -- but a lot of its costs are also external to the system itself and symptomatic of healthcare being at the intersection of several independent sources of price inflation that each have to be addressed on their own terms.