We Paid to Develop Merck’s Covid Pill

And now they’re charging us a 4,000% markup on it

Comparing the government to a household or a business isn’t merely inapt (a government is a currency creator, while a household is a currency user — their budgeting constraints are totally unrelated) it’s also profoundly dishonest.

Like, if you really are worried about government “living beyond its means,” then you should freak out every time Congress writes a 715 billion-dollar, no-strings-attached check to the Pentagon or sends $258 billion to the ultrarich as part of the CARES Act.

If the government is like a household that can “charge too much to its credit card,” then it shouldn’t matter whether the spending is going for universal pre-K and Medicare for All or junk bonds and a trillion-dollar fighter jet that can’t even fly.

The household analogy only arises for our ability to house, feed, clothe, educate, and care for each other — when it comes to corporate subsidies and blank checks for Beltway Bandits, the whole establishment converts to (transient, highly selective, ardent) adherence to Modern Monetary Theory.

The same is true when we talk about running government like a business, another thing the government is nothing like, and another analogy that is only raised to justify shredding the social safety net, and jettisoned when it comes to handing billions to giant corporations.

Take Merck’s blockbuster Covid therapeutic drug Molnupiravir, whimsically named for Thor’s hammer, which made headlines after a trial in which it was 100% successful in preventing death in Covid patients.

A five-day course of Molnupiravir costs $17.74 to produce. Americans — and Medicare, and U.S. insurers — will pay $712 to receive a five-day course of the drug, representing a tidy 4,000% profit for Merck.

But of course, the cost of Molnupiravir isn’t merely the cost of production — the major cost is the high-risk capital that was used to fund the initial development and testing. In the world of business, the investor who bears that risk should reap the reward.

Right?

Here’s the thing: That investor was the U.S. government. Molnupiravir was developed at public…