Money printer goes brrr

To the surprise of absolutely no-one Big Pharma has built and operated its own home in the political arena, amplified by the megaphone of "all da money". The pharmaceutical industry spent a meager $372 million on lobbying last year. It follows somewhat naturally that in a system of patents, regulations, and healthcare policies, lobbying is an essential part of the game for pharma. The why is less shocking than the how.

Olson’s theory in "The Logic of Collective Action" posits that large groups have a much more difficult time providing a public good—like lobbying—without a nudge. In Big Pharma's case, the nudge is fascinating, since there are almost 600 prolific entities that stand to benefit from lobbying. Though each company knows that it could technically free-ride the industry's lobbying efforts, there seems to be some effective selective/separate incentive to stimulate significant and growing collective action. 

So perhaps our model isn't covering the whole story. Perhaps in this industry, getting a line-item on a bill is so valuable (Vi) that even at low quantities of the public good (T), the value to the firm is greater than the cost (Ci). This would make sense, right? Because the value of a drug getting funding, rights, etc. is so impactful to a firm, the firm is compelled to want to "produce" lobbying activities individually in a manner that is also consistent with the group (Pharma's) interest. So maybe this is one way for us to explain the money flying off the printing press...