No it doesn't. This is silly.
Drug prices in the US are high for non-generic drugs because patent law gives the patent holder an artificial government-granted monopoly, which is blatantly not "pure" or "maximum capitalistic".
Generic drugs - where the free market does apply - in the US are as cheap or cheaper than in other countries. See [0]:
U.S. prices for brand-name originator drugs were 422 percent of prices in
comparison countries, while U.S. unbranded generics, which we found account for 90
percent of U.S. prescription volume, were on average cheaper at 67 percent of
prices in comparison countries, where on average only 41 percent of prescription
volume is for unbranded generics.
Because you are both absolutely right.
This is a much better compromise. The company will end up with more money(and faster!) as a result of this prize than under a patent system - since the patent system induces dead-weight losses, and the government will end up with more lives saved.
The US has an enormously large higher education system with all the expertise and manpower to facilitate large trials of novel medicines. The only thing missing is political will to spend the money, so instead, Eli Lilly or Novartis or Pfizer etc spend investor’s money to do it.
And then taxpayers pay for it in a super convoluted way.
Since the people with the money don't understand the science, these possibilities must then be assessed by bureaucrats, and this causes our best to spend half of their time writing proposals instead of working and researching. A complete waste of time. Let the people who know the most about their subject freedom to take risks, and then they are given the spoils of their rewards if they are proven correct.
Prizes are much more efficient than grants. Prizes should be given to academics according to the value they produced. I have no issue if the academics choose to spend some of the windfall profits of their prizes on trials.
The biggest value protector arguably of the patent-FDA approval process is on the FDA side, who create massive barriers to entry that mitigate close unpatented chemical competitors from outside the pharma oligopoly from competing.
This is very much capitalistic. It's not competitive markets (which are good for consumers) but capitalists hate competition once they have made it to the top.
Monopolies are anti-capitalism, despite it being something that capital strives for.
This is like being upset that bug spray doesn't actually spray bugs, in fact, it actually deters them.
I’ll have to keep this in mind the next time it comes up…
I don’t know why you think this. The US is not a maximally capitalist society. The reason drug prices are so high is due to regulations restriction who can manufacture them due to government-granted temporary monopolies through patent law.
If the US was maximally capitalist it would be a free for all with no patent protection.
The much more likely alternative in a maximally capitalist / free market maximalist society would be keeping all drug formulas as trade secrets, and thereby having all drugs as branded, no generics whatsoever (or few - perhaps some substances could be reverse engineered). In such a society, having the state force companies to publish their formulas would be seen as unacceptable interference in the free market, almost certainly.
In a pure free market, someone could try to keep the formulas secret, but others can just reverse engineer it into being public, which is basically guaranteed to happen if there's sufficient demand. Given that they aren't wasting money trying to obfuscate the recipe nor the formula, these competitors do have an advantage over the original. As such, I posit that free-to-copy will be default behavior in a pure free market, with trade-scerets being resteicted on niche sectors.
The reason we can't do this today is primarily that reverse engineering is heavily restricted by IP laws.
If we had proper competition and price discovery, things would be much better.