If the cost of drug development were to drop by a factor of 100-1000, say from the $3B it costs today to the $3-30M range, that would likely unleash a massive wave of decentralization in the industry that would make it very hard to justify outrageously high drug prices for long.
However, short of a large drop of that magnitude, I agree that we'll probably continue to see Pharma companies charging as much as they can get away with and the political climate allows.
> I don't need a thousand drugs on the market to treat every indication. [...] If lowering the efficacy standards doesn't get me treatment for new indications, why would I want it?
It's true that the Better than the Beatles problem rewards consumers with cheaper drugs, but on the flipside, it robs them of the benefit of newer drugs.
As a result, all the technical capabilities that the Pharma industry gained into developing drugs that are less toxic or better targeted do not get translated into consumer benefit when the BTTB problem is in the way.
Moreover, once an area of drug development stops seeing new commercial success in decades, hysteresis sets in and can drive Pharma companies out of such areas, which has largely been the case with anti-infectives since the 1980s. (See Question 11 in the interview)