If the cost isn’t reflective of real resource/labor consumption, but instead is a rent on IP (which is partially repaying some fixed R&D investment), it’s not so simple.
Let’s suppose a drug company is setting their price to maximize revenue.
Suppose they make the following projections:
They determine that if the treatment price is $10 million above the actual cost of providing the treatment, 5 people will buy it. $50 million total profit.
If the price is set so the profit per treatment is $1 million, 100 people will use it. $100 million total profit.
If the profit per treatment is $100k, 800 people will use it. $80 million total profit.
If the company isn’t factoring in the value of a life saved, they will pick the $1 million price point. If ethicists then just run with that price, they may come to the conclusion that the treatment isn’t cost-effective. However, they are relying on data that’s an output of a process with conflicting values, and that pollutes the result of their calculation. Garbage in, garbage out. The 700 people who didn’t get treated lose out for a pretty bad reason.
We could imagine a policy where the drug companies are mandated to maximize lives saved when setting prices. One might argue that companies won’t develop as many drugs if profits can’t be maximized. We could adjust the policy to subsidize companies for income lost when setting lower prices. Ie. if the drug company picks the $100k price point to save 700 more lives, the government gives them $20M compensation so they can profit like they would have at the $1M price point. That way society spends the same amount of money on this drug, but more lives get saved. I’m sure there’s a lot of challenges in designing a program like that, but the opportunity to save lives makes it seem worthwhile to attempt.