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> a market trial and error approach seems a little barbaric. The average American earns less in a week than the cost of one epi pen. No, "nonfarm" statistics

> a market trial and error approach seems a little barbaric. The average American earns less in a week than the cost of one epi pen. No, "nonfarm" statistics don't apply since people who work on farms still need epi pens. > It makes sense for the government to step in when something goes wrong. What has gone wrong in this case? The protected cronies of regulators are making a tidy profit after spending years cozying up, making political donations, and building a revolving door between industry and government. In actuality, in this case everything has gone abundantly right for regulators and firms. The task force will likely warn them that they should have just been satisfied with $350 per pen to avoid the bad press.

clarkmoody 10y ago
Thank you. This is a problem that starts and ends with government, not with the "free market" (which hasn't existed in the healthcare industry in a long time)
- clavalle 10y ago
  The problem is how does the free market test these kinds of things when there is every incentive to cut corners? We're not talking about toasters. How many people have to die before the market reacts? How much research into individual company's testing should a person do in order to buy an epipen?
  - grandalf 10y ago
    > The problem is how does the free market test these kinds of things when there is every incentive to cut corners? The same incentive that makes the iPhone or Model S such poor quality? We don't know the name of the epi pen manufacturer because it does not need to develop a brand reputation, all it needs to do is reach a deal with regulators and collect profits. There is much room for a combination of public and self-interested private watchdog groups. There is no reason why we must rely on only one quality control approach. If things go poorly it can simply sell the patent to another firm who can repeat the same strategy, the only risks being that someone will come up with a better treatment or that regulators will take a dislike to the company... The second of these risks can be reduce through revolving door strategies and the standard regimen of fancy meals, etc.
  - clarkmoody 10y ago
    Let's talk about a free market. > every incentive to cut corners Do you continue to patronize businesses that cut corners when you expect good customer service or a good product? The free market ruthlessly punishes businesses that do not meet consumer demands. Only through government interference are substandard businesses sustained. Profits are the signal that a business is doing something right. Ok, but the EpiPen is a life-or-death product. We must have coercive government regulation, right? > How many people have to die As far as a quick search could turn up, it looks like the discovery and isolation of epinephrine was entirely the product of private ingenuity -- in 1901. Government did not have some large project to find this wonder compound that could save lives. So private initiative already has saved countless lives without the direction of the government. So here is a compound that has been around for 115 years, and somehow we're looking at $600 for a two-pack of injectors. There is no way that situation arises from free-market processes. Government has been heavily involved in healthcare for a while, granting monopoly privilege to favored parties, effectively eliminating competition. Additionally, if a company sells a product purporting to save your life in a dire situation, shouldn't they be held liable if their product doesn't work? Not only will people cease to trust said company (forcing them out of business) but competitors will also arise -- and survive -- based on how well they serve consumers.
    - clavalle 10y ago
      >The free market ruthlessly punishes businesses that do not meet consumer demands. True. But only as ruthlessly as the market approaches the free market ideal (readily available and accurate information on products, other users, choice at time of purchase etc). And we know there are no true free markets and that markets can drift far from the ideal even absent of government interference. Who is the first to try out a newly released epipen? >Only through government interference are substandard businesses sustained. Now THAT is a very strong statement. Information asymmetry that has nothing to do with government is one category of ways a sub-standard business can thrive. Are we to believe that information asymmetry is all rooted in government interference? > Profits are the signal that a business is doing something right. Most of the time. An abundance of sustained profits is also a signal that the business is doing something wrong (or taking advantage of a market failure of some kind) or competitors would be jumping in and eating away at them.
- tcbawo 10y ago
  Our entire medical system was founded as a reaction against snake oil salesmen and quacks who preyed on desperate people. If you support capitalism and the free market in medicine, you must acknowledge that monopolies can and do arise.
clavalle 10y ago
So, what is the market solution? All I see is a restatement of the problem.
- radu_floricica 10y ago
  There is no market solution because it's not a market problem. If you try to make your own epi pen and sell it, the nice men with guns come and take you to jail. Literally.
  - tcbawo 10y ago
    Are there any cases of a small company attempting this? Since the drug is well known and cheap, I was hoping to read about hackers designing an open source 3D printed dispenser.
- grandalf 10y ago
  It's not necessarily an all-or-nothing solution. Consumers value accurate information about drug safety, so there is abundant incentive for a wide variety of different groups to offer a list of safe drugs. Since most Americans also interface with a private health insurance company and often private medical groups or hospitals, it's not just the individual who determines which safe list to trust. For example: Ronald's cardiologist might trust a safe list produced by a professional organization of cardiologists. Ronald's wife may be from the UK and trust the UK's trusted list. Ronald may be a customer of Aetna which may use its own list. If Ronald is prescribed a particular drug, he can verify that it's listed on any lists he cares about. Perhaps he's recently gotten interested in Anti-Vaxer lore, and the drug is blacklisted by his group. He can go back to his doc and request another option. The same would happen if Aetna hasn't added the drug to its formulary (for whatever reason). Ronald may also be cost conscious and may also have a safe list of highly economical drugs, and may ask his doctor about the implications of choosing a far less expensive option that was popular in the 1970s. This drug may have been removed from Aetna's list due to influence from the pharma industry, but Ronald and his doctor can look at the available information and make an informed decision. With pharmaceuticals we're talking about a very simple blacklisting or whitelisting scheme. Most well-known drugs are quite well understood. The "important" area for making the white listing (or blacklisting) decision lies mostly with brand new drugs. It's silly to think that a single entity can somehow merge the interests of young and old and derive a safe period of time for a drug to stay off the market. It's also important to recognize the intense pressure on regulators not to pull a drug that has already been approved and whose side effects may be a bit worse than initially understood (such as Vioxx). So in a broad sense, the key is decentralization, to make corruption more costly, and focusing our trust at the local level to the docs who we trust with our care who can make an informed decision guided by whitelist/blacklist offerings from a variety of sources.

clarkmoody 10y ago

Thank you. This is a problem that starts and ends with government, not with the "free market" (which hasn't existed in the healthcare industry in a long time)

clavalle 10y ago
The problem is how does the free market test these kinds of things when there is every incentive to cut corners? We're not talking about toasters. How many people have to die before the market reacts? How much research into individual company's testing should a person do in order to buy an epipen?
- grandalf 10y ago
  > The problem is how does the free market test these kinds of things when there is every incentive to cut corners? The same incentive that makes the iPhone or Model S such poor quality? We don't know the name of the epi pen manufacturer because it does not need to develop a brand reputation, all it needs to do is reach a deal with regulators and collect profits. There is much room for a combination of public and self-interested private watchdog groups. There is no reason why we must rely on only one quality control approach. If things go poorly it can simply sell the patent to another firm who can repeat the same strategy, the only risks being that someone will come up with a better treatment or that regulators will take a dislike to the company... The second of these risks can be reduce through revolving door strategies and the standard regimen of fancy meals, etc.
- clarkmoody 10y ago
  Let's talk about a free market. > every incentive to cut corners Do you continue to patronize businesses that cut corners when you expect good customer service or a good product? The free market ruthlessly punishes businesses that do not meet consumer demands. Only through government interference are substandard businesses sustained. Profits are the signal that a business is doing something right. Ok, but the EpiPen is a life-or-death product. We must have coercive government regulation, right? > How many people have to die As far as a quick search could turn up, it looks like the discovery and isolation of epinephrine was entirely the product of private ingenuity -- in 1901. Government did not have some large project to find this wonder compound that could save lives. So private initiative already has saved countless lives without the direction of the government. So here is a compound that has been around for 115 years, and somehow we're looking at $600 for a two-pack of injectors. There is no way that situation arises from free-market processes. Government has been heavily involved in healthcare for a while, granting monopoly privilege to favored parties, effectively eliminating competition. Additionally, if a company sells a product purporting to save your life in a dire situation, shouldn't they be held liable if their product doesn't work? Not only will people cease to trust said company (forcing them out of business) but competitors will also arise -- and survive -- based on how well they serve consumers.
  - clavalle 10y ago
    >The free market ruthlessly punishes businesses that do not meet consumer demands. True. But only as ruthlessly as the market approaches the free market ideal (readily available and accurate information on products, other users, choice at time of purchase etc). And we know there are no true free markets and that markets can drift far from the ideal even absent of government interference. Who is the first to try out a newly released epipen? >Only through government interference are substandard businesses sustained. Now THAT is a very strong statement. Information asymmetry that has nothing to do with government is one category of ways a sub-standard business can thrive. Are we to believe that information asymmetry is all rooted in government interference? > Profits are the signal that a business is doing something right. Most of the time. An abundance of sustained profits is also a signal that the business is doing something wrong (or taking advantage of a market failure of some kind) or competitors would be jumping in and eating away at them.
tcbawo 10y ago
Our entire medical system was founded as a reaction against snake oil salesmen and quacks who preyed on desperate people. If you support capitalism and the free market in medicine, you must acknowledge that monopolies can and do arise.

clavalle 10y ago

So, what is the market solution? All I see is a restatement of the problem.

radu_floricica 10y ago
There is no market solution because it's not a market problem. If you try to make your own epi pen and sell it, the nice men with guns come and take you to jail. Literally.
- tcbawo 10y ago
  Are there any cases of a small company attempting this? Since the drug is well known and cheap, I was hoping to read about hackers designing an open source 3D printed dispenser.
grandalf 10y ago
It's not necessarily an all-or-nothing solution. Consumers value accurate information about drug safety, so there is abundant incentive for a wide variety of different groups to offer a list of safe drugs. Since most Americans also interface with a private health insurance company and often private medical groups or hospitals, it's not just the individual who determines which safe list to trust. For example: Ronald's cardiologist might trust a safe list produced by a professional organization of cardiologists. Ronald's wife may be from the UK and trust the UK's trusted list. Ronald may be a customer of Aetna which may use its own list. If Ronald is prescribed a particular drug, he can verify that it's listed on any lists he cares about. Perhaps he's recently gotten interested in Anti-Vaxer lore, and the drug is blacklisted by his group. He can go back to his doc and request another option. The same would happen if Aetna hasn't added the drug to its formulary (for whatever reason). Ronald may also be cost conscious and may also have a safe list of highly economical drugs, and may ask his doctor about the implications of choosing a far less expensive option that was popular in the 1970s. This drug may have been removed from Aetna's list due to influence from the pharma industry, but Ronald and his doctor can look at the available information and make an informed decision. With pharmaceuticals we're talking about a very simple blacklisting or whitelisting scheme. Most well-known drugs are quite well understood. The "important" area for making the white listing (or blacklisting) decision lies mostly with brand new drugs. It's silly to think that a single entity can somehow merge the interests of young and old and derive a safe period of time for a drug to stay off the market. It's also important to recognize the intense pressure on regulators not to pull a drug that has already been approved and whose side effects may be a bit worse than initially understood (such as Vioxx). So in a broad sense, the key is decentralization, to make corruption more costly, and focusing our trust at the local level to the docs who we trust with our care who can make an informed decision guided by whitelist/blacklist offerings from a variety of sources.