Quote:
Originally Posted by spence
I'd think that government influence (here and abroad) as part of a free market economy would have a large impact on both supply and demand.
You're creating a different context here . The original context was pharma charging whatever it wants not being your idea of market "forces." Government influence does not play a part in the traditional usage of the term "market forces". Now your also being loose with "free market." If government regulation on a market is LARGE, it is not, strictly, a "free" market, but a controlled market in either a mixed economy or a centrally planned economy. Hence, your unnecessary remark about pharma's pricing not being your idea of market forces at work. Of course, THEIR PRICING IS NOT A RESULT OF MARKET FORCES, BUT A RESULT GOVERNMENT REGULATION, that is, a result of central planning.
Today we have regulation that impacts both profit and loss, take away it all away and the results would be unpredictable. Perhaps lower prices from competition but also increased costs if quality standards are not maintained. Undoing a heavily regulated industry is a lot different than pretending it never existed in the first place.
The results can be fairly predictable if done right. The result of current conditions is obviously unsustainable. Safe quality standards can be maintained with far less government regulation and, thus, at far less cost, by allowing good manufacturing practice (GMP) certified facilities to produce generic drugs with a warning label that they are not produced under the same standards required for FDA approved generic drugs, etc. This would also help to eliminate the big problem of drug counterfeiting that exists now since it would not be as profitable to produce fakes of cheaper drugs. And it would help to reduce the problem of defective generic drugs produced in China or India. Another way to lower costs is not to ban all other forms of a drug that is granted orphan drug status. These drugs are for rare diseases, and not profitable to produce unless exorbitant prices can be charged.
I wouldn't say that proving a drug is safe and effective, or that it actually does what you claim it does...is "draconian". This relationship must be pretty unbearable what with all the private sector profit it creates.
-spence |
When regulation is so expensive that it can bankrupt a country, I would say that it is draconian. Medicare has an unfunded liability of $24.6 trillion (downgraded from $37 trillion in 2009 by fictitious "assumptions" to hide the true liability). That's just Medicare. Not Social Security, the national debt, the military, etc., just Medicare. Subsidizing drugs are a major portion of that liability. And, as you have implied several times, the "relationship" (between the government and pharma) is what sustains the profits that bother you.