6 ms·

I tend to always want the free market to find the balance as well, however medical care price markets for everything are not a free market. Between patent regu

I tend to always want the free market to find the balance as well, however medical care price markets for everything are not a free market. Between patent regulations allowing for extension and monopoly combine, liability on producers, pressure from investors for profit and returns, with those prescribing and taking the drugs having no connection to the price and value the forces that drive pricing are a maelstrom. I have worked in pharma research both internal to the companies and as an external independent data reviewer. I am also aware of a both subtle and overt collusion to fix data and pricing. While I think government does nothing well this is area is a dark cave that could use some light.

fredkbloggs 11y ago
While I agree with you and the author, I don't see either of you proposing any solutions, and I don't really have one either. About the closest I can get to is to abolish or at least very radically reform the third-party payer system. But since it's fashionable these days to push for a single-payer system (which is even farther in the wrong direction), that seems at least as politically impossible as anything else that might be proposed. There are a number of modest improvements to e.g. the approval process that would lower risks and costs, but not enough to make any real difference, and even those are politically daunting. Ultimately, the only way to get new research is to be willing to pay for it. And the only way to get low prices is to be willing to walk away. It might be helpful for people to take a big-picture approach here, and I suspect that if they did, many would decide that maybe having all these expensive drugs and even more expensive medical plans isn't really worth it. You can probably get a lot more enjoyment out of a 60-year life than a 70-year life if every year comes with an extra 10 grand to spend, especially if your last five years would have been spent suffering side effects in a hospital bed. I suppose I'm questioning the author's assertion that (rational) people are willing to pay any price for drugs.
- beagle3 11y ago
  > push for a single-payer system (which is even farther in the wrong direction), Why do you think it's in the wrong direction? Many countries have socialized medicine, some of which have single payer, and I've never met a person who experienced a single payer system who didn't think it was the right way to go.
  - fredkbloggs 11y ago
    This article correctly pointed out very early on that the third-party payer system inflates demand and prices for drugs. If you disagree with that assertion, then you're welcome to disagree with mine as well. Otherwise, if you think having coverage denied for a treatment by a private corporation (that owes you nothing beyond what is contracted) is politically incendiary, wait until you see the government (theoretically "for the people") deny that same payout. Death panels, anyone? By making it even harder to refuse to pay for a treatment, a single-payer system would increase demand and therefore prices even further. This is Econ 101 stuff; it's not some rabid flight of fancy.
    - fsg7sdfg789 11y ago
      If my understanding is correct, other nations with single payer systems have lower health care costs and frequently better outcomes than in the US. Econ101 is good for teaching concepts about how to think about economic interactions, but when the data doesn't match the theory, you can't stick with the theory.
      - vidarh 11y ago
        Every other country on the planet have lower health care costs than the US by a large margin. US public healthcare spending alone, excluding private payments and insurance, places the US in the top 20, possibly top 10, in government spending on healthcare. In other words, Americans pay more than citizens of most developed countries over their taxes, and then pay about the same again to private insurers...
        rational-future 11y ago
        That's an interesting argument, but it misses the fact that the US is effectively subsidizing the healthcare in the rest of the world.
        dragonwriter 11y ago
- rhizome 11y ago
  Why all of this focus on "people" and "if they did" placeholding for your own opinions? It may drive home how dystopic they are if you deign to own them. The competition for health is illness, infirmity, and death, and I don't see it as anything but cruel for the free market to force people to choose between these options. Yes, people will (attempt to) pay any price for drugs, because it's their life. This seems uncontroversial. The reasons third-party payer persists has nothing to do with any fashionability of opposing it. The fact is that nearly every country with universal healthcare (not sure if this is included in what you deride as "fashionable" single-payer) has a higher standard of living than the US.
  - fredkbloggs 11y ago
    > Why all of this focus on "people" and "if they did" placeholding for your own opinions? It may drive home how dystopic they are if you deign to own th Because politics and economics are human sciences? I already know what I want/value for myself, and there's nothing dystopian about it. One person doesn't make a market and certainly doesn't make policy. > The competition for health is illness, infirmity, and death, and I don't see it as anything but cruel for the free market to force people to choose between these options. Yes, people will (attempt to) pay any price for drugs, because it's their life. This seems uncontroversial. It's controversial. Take a step back and let your SJW anger fade a bit, then think about it. Just how much would you pay for 5 years of extra life, and of what kind? Not how much would you force someone else to pay at gunpoint. Not how much would you imagine being willing to pay in the moment for 5 years of ideal life. How much, every year from birth to death, would you really be willing to pay for 5 years of probably-degraded life? Everything you pay means giving up something else. For most people, that figure is not in fact "infinity" nor is it "every dime I'll ever earn". It's less than that, and how much less depends on individual values. Quality of life matters. Drugs have side effects, and those side effects reduce quality. Drugs aren't perfectly effective, and whatever they're intended to treat is very likely causing symptoms that also reduce quality. Very often that combination reduces quality to a great extreme. And paying for drugs, whether a vast sum or a relative pittance, means not having something else, which, you guessed it, reduces quality. Economics is the study of scarcity and how humans adapt themselves to it. Both quality and quantity of life are scarce resources, and there are tradeoffs to be made with other scarce resources. While your gut reaction might be that the tradeoff here is obvious, universal, and uncontroversial, a more careful examination is warranted. It's most definitely not as simple as you make it out to be.
- specialist 11y ago
  But since it's fashionable these days to push for a single-payer system... Good. I'm pleased that evidence-based rationality is coming back into fashion. ...the only way to get low prices is to be willing to walk away. Don't confuse individual choices with collective action. Prices can decrease through economies of scale. Which requires investment. Libertarians wax poetic about Freedom Markets (tm), conflating profit motive and incentive, ignoring externalized costs, ignoring the need for law and order to form open markets. It's exhausting. OP wrote: People who are dying are price insensitive; they would pay any amount to get a few more months of life. Your misinterpretation: I suppose I'm questioning the author's assertion that (rational) people are willing to pay any price for drugs. OP makes no such assertion. The fear of death is the definition of irrationality.
digi_owl 11y ago
Expecting the free market to find balance is like expecting the weather to be on a regular schedule. Economics is by now the only science clinging to the notion of balance. Everyone has moved on to thinking in terms of inherent instabilities, and either attempt to predict (weather) or manage (engineering) them as best one can.
- danbruc 11y ago
  Economics is insofar different that we are not just at mercy of the laws of nature. We have to deal with the nature of humans and their behavior but besides that we can make up the rules and could at least in principle set them up in a way that yields a stable system. If it is possible in practice I don't know, maybe stability inevitably leads to terrible inefficient systems or requires enforcing practically unenforceable things. But you are at least correct for our current system, there are several constructs that are not stable and lead to runaway behavior.

fredkbloggs 11y ago

While I agree with you and the author, I don't see either of you proposing any solutions, and I don't really have one either. About the closest I can get to is to abolish or at least very radically reform the third-party payer system. But since it's fashionable these days to push for a single-payer system (which is even farther in the wrong direction), that seems at least as politically impossible as anything else that might be proposed. There are a number of modest improvements to e.g. the approval process that would lower risks and costs, but not enough to make any real difference, and even those are politically daunting. Ultimately, the only way to get new research is to be willing to pay for it. And the only way to get low prices is to be willing to walk away. It might be helpful for people to take a big-picture approach here, and I suspect that if they did, many would decide that maybe having all these expensive drugs and even more expensive medical plans isn't really worth it. You can probably get a lot more enjoyment out of a 60-year life than a 70-year life if every year comes with an extra 10 grand to spend, especially if your last five years would have been spent suffering side effects in a hospital bed. I suppose I'm questioning the author's assertion that (rational) people are willing to pay any price for drugs.

beagle3 11y ago
> push for a single-payer system (which is even farther in the wrong direction), Why do you think it's in the wrong direction? Many countries have socialized medicine, some of which have single payer, and I've never met a person who experienced a single payer system who didn't think it was the right way to go.
- fredkbloggs 11y ago
  This article correctly pointed out very early on that the third-party payer system inflates demand and prices for drugs. If you disagree with that assertion, then you're welcome to disagree with mine as well. Otherwise, if you think having coverage denied for a treatment by a private corporation (that owes you nothing beyond what is contracted) is politically incendiary, wait until you see the government (theoretically "for the people") deny that same payout. Death panels, anyone? By making it even harder to refuse to pay for a treatment, a single-payer system would increase demand and therefore prices even further. This is Econ 101 stuff; it's not some rabid flight of fancy.
  - fsg7sdfg789 11y ago
    If my understanding is correct, other nations with single payer systems have lower health care costs and frequently better outcomes than in the US. Econ101 is good for teaching concepts about how to think about economic interactions, but when the data doesn't match the theory, you can't stick with the theory.
    - vidarh 11y ago
      Every other country on the planet have lower health care costs than the US by a large margin. US public healthcare spending alone, excluding private payments and insurance, places the US in the top 20, possibly top 10, in government spending on healthcare. In other words, Americans pay more than citizens of most developed countries over their taxes, and then pay about the same again to private insurers...
      - rational-future 11y ago
        That's an interesting argument, but it misses the fact that the US is effectively subsidizing the healthcare in the rest of the world.
        dragonwriter 11y ago
rhizome 11y ago
Why all of this focus on "people" and "if they did" placeholding for your own opinions? It may drive home how dystopic they are if you deign to own them. The competition for health is illness, infirmity, and death, and I don't see it as anything but cruel for the free market to force people to choose between these options. Yes, people will (attempt to) pay any price for drugs, because it's their life. This seems uncontroversial. The reasons third-party payer persists has nothing to do with any fashionability of opposing it. The fact is that nearly every country with universal healthcare (not sure if this is included in what you deride as "fashionable" single-payer) has a higher standard of living than the US.
- fredkbloggs 11y ago
  > Why all of this focus on "people" and "if they did" placeholding for your own opinions? It may drive home how dystopic they are if you deign to own th Because politics and economics are human sciences? I already know what I want/value for myself, and there's nothing dystopian about it. One person doesn't make a market and certainly doesn't make policy. > The competition for health is illness, infirmity, and death, and I don't see it as anything but cruel for the free market to force people to choose between these options. Yes, people will (attempt to) pay any price for drugs, because it's their life. This seems uncontroversial. It's controversial. Take a step back and let your SJW anger fade a bit, then think about it. Just how much would you pay for 5 years of extra life, and of what kind? Not how much would you force someone else to pay at gunpoint. Not how much would you imagine being willing to pay in the moment for 5 years of ideal life. How much, every year from birth to death, would you really be willing to pay for 5 years of probably-degraded life? Everything you pay means giving up something else. For most people, that figure is not in fact "infinity" nor is it "every dime I'll ever earn". It's less than that, and how much less depends on individual values. Quality of life matters. Drugs have side effects, and those side effects reduce quality. Drugs aren't perfectly effective, and whatever they're intended to treat is very likely causing symptoms that also reduce quality. Very often that combination reduces quality to a great extreme. And paying for drugs, whether a vast sum or a relative pittance, means not having something else, which, you guessed it, reduces quality. Economics is the study of scarcity and how humans adapt themselves to it. Both quality and quantity of life are scarce resources, and there are tradeoffs to be made with other scarce resources. While your gut reaction might be that the tradeoff here is obvious, universal, and uncontroversial, a more careful examination is warranted. It's most definitely not as simple as you make it out to be.
specialist 11y ago
But since it's fashionable these days to push for a single-payer system... Good. I'm pleased that evidence-based rationality is coming back into fashion. ...the only way to get low prices is to be willing to walk away. Don't confuse individual choices with collective action. Prices can decrease through economies of scale. Which requires investment. Libertarians wax poetic about Freedom Markets (tm), conflating profit motive and incentive, ignoring externalized costs, ignoring the need for law and order to form open markets. It's exhausting. OP wrote: People who are dying are price insensitive; they would pay any amount to get a few more months of life. Your misinterpretation: I suppose I'm questioning the author's assertion that (rational) people are willing to pay any price for drugs. OP makes no such assertion. The fear of death is the definition of irrationality.

digi_owl 11y ago

Expecting the free market to find balance is like expecting the weather to be on a regular schedule. Economics is by now the only science clinging to the notion of balance. Everyone has moved on to thinking in terms of inherent instabilities, and either attempt to predict (weather) or manage (engineering) them as best one can.

danbruc 11y ago
Economics is insofar different that we are not just at mercy of the laws of nature. We have to deal with the nature of humans and their behavior but besides that we can make up the rules and could at least in principle set them up in a way that yields a stable system. If it is possible in practice I don't know, maybe stability inevitably leads to terrible inefficient systems or requires enforcing practically unenforceable things. But you are at least correct for our current system, there are several constructs that are not stable and lead to runaway behavior.