4 ms·

> the ugly side of capitalism True if you mean the thing we call capitalism in the US. The only reason the price of a $1 piece of plastic can possibly be so

> the ugly side of capitalism True if you mean the thing we call capitalism in the US. The only reason the price of a $1 piece of plastic can possibly be so high is because of a very noncompetitive situation created by various cronies and abetted by regulators. Let's call it what it is. It's not capitalism, it's simply a corrupt regulatory system and firms that have learned how to exploit it to their advantage. it's nothing like a market that allows competition, and the regulation is nothing like a fair referee that allows the best player to win. Under actual capitalism, there would have been price competition and perhaps (gasp) a startup would have started selling epi pens for a reasonable price just as Google started offering massive email storage for a reasonable price, etc. While I understand the emotional reaction that it is "essential for life" (I have family members who rely upon them), let's blame what is actually at fault, laws that allow firms to do this sort of thing and prevent solutions from emerging.

poopsintub 10y ago
Right, is that not exactly what is supposed to happen? Performance and profits are directly related to pay, especially when you're publicly traded.
ceejayoz 10y ago
> perhaps (gasp) a startup would have started selling epi pens The first version of Soylent lacked iron because Rhinehart couldn't be bothered to Google basic nutrition requirements. We've tried the no regulation medical market. The term "snake oil salesman" exists because of it.
- grandalf 10y ago
  > The first version of Soylent lacked iron because Rhinehart couldn't be bothered to Google basic nutrition requirements. Yet it is legal for someone to subsist only on Doritos. Why not regulate those too.
  - allengeorge 10y ago
    No one markets Doritos as a complete nutrition substitute. They're not equivalent at all.
- cookiecaper 10y ago
  You're talking about different things. Foodstuffs can and should be regulated to a reasonable degree, and they are regulated, not only by the FDA but also by state departments of agriculture and local departments of health. Whether an early iteration of Soylent should've been legal or not is beside the point. The point is that, iirc, Mylan has a government-granted monopoly on the EpiPen via a patent for the injection mechanism. That means Mylan is the only company that is legally allowed to manufacture it in the United States. In addition, it takes millions of dollars to bring a treatment through the slow FDA approval process (though it's not clear if this is necessary to compete with EpiPen), so even if someone was somehow able to circumvent and/or license any patents Mylan may hold, it'd still take herculean resources to bring a competitor to market. That's what the grandparent is talking about. The EpiPen can be so expensive because no one else is legally allowed to sell a substantially similar device without Mylan's permission. When the consumer has only one option, especially for something as crucial as a life-saving medication, things are really bad, whether the economic system that consumer is living under calls itself "capitalism" or something else. We've got to fix our intellectual property laws, both patent and copyright. A large part of the Fortune 500 is only there because of the excessive legal monopolies that we've granted through intellectual property (which means it'll be basically impossible to fix).
  - ceejayoz 10y ago
    > The point is that, iirc, Mylan has a government-granted monopoly on the EpiPen via a patent for the injection mechanism. No, they don't. The EpiPen's patent is long expired. https://www.google.com/patents/US4031893 https://www.google.com/patents/US4031893
    - cookiecaper 10y ago
      I know that some patents on the device have expired. However, there still seems to be frequent reference to Mylan's current eligibility for patent protection. Here's one such reference from a New York Times editorial, published today [0]: >Today that same tiny, lifesaving bolus of epinephrine — used mostly to treat severe allergic reactions — is delivered via sometimes elaborate devices called auto-injectors. Though the medicine itself hasn’t changed, the delivery devices have been protected by patents, enabling drug makers to charge ever escalating — sometimes prohibitive — prices for one of the oldest drugs in medical use. It doesn't say which patents specifically may cover the EpiPen, but as far as I can tell, the consensus is that the device is patent protected. I would love to know if there's definitive evidence either way -- specifically which patents Mylan claims to be protected under, or whether this is in reality just a common assumption/myth. [0] http://www.nytimes.com/2016/09/04/opinion/sunday/the-lesson-of-epipens-why-drug-prices-spike-again-and-again.html http://www.nytimes.com/2016/09/04/opinion/sunday/the-lesson-...
rayiner 10y ago
There was an FDA approved competitor. It got pulled from the market because of fears it wasn't delivering the right dosage, and the company selling the drug wasn't willing to put up with the potential liability.
- grandalf 10y ago
  Perhaps they knew the design was flawed, or perhaps they made a very foolish decision (since they would have profited handsomely if the design could be fixed).
  - 20yrs_no_equity 10y ago
    Any potential profit must be balanced against the highly political question of whether the fix (assuming one was needed) would get thru the FDA, and at what cost, how many bribes, or more politically correctly put, campaign contributions would be needed and whether even doing so would be sufficient to make it onto the market with a revised version. It's not like these decisions are being made purely on a scientific basis.
    - harryh 10y ago
      I have just as many problems with an overly restrictive FDA as the next free market guy, but there isn't really a lot of evidence that the issues are due to political corruption. In reality the FDA is too conservative due to the incentive structure: people getting hurt from a drug approved too fast are very visible. People that get hurt due to a drug being approved too slowly are not. This is the core issue.
- maxerickson 10y ago
  There is a competitor. Adrenaclick is not a perfect substitute for Epipen, but it is an auto-injector and delivers the same drug. There are also companies making generics for Adrenaclick, they cost ~$140.
joesmo 10y ago
Just because our system falls so far outside the ideology it claims to espouse does not mean it's not capitalism. Just as the reality of communism was far from the ideology, so is our reality of capitalism. I'd argue, however, that this is capitalism. How things should work is a fantasy. They do not work the way you describe in most 'capitalist' systems (US, European countries, China). I'd argue that what you call capitalism doesn't exist and pretending that it does supports and fuels the current system and state of affairs by legitimizing the idea of capitalism when the actuality of capitalism is not so rosy (hundreds of dollars for an EpiPen). The idea of capitalism that you espouse, I'd argue, is mere fantasy and delusion and a rather dangerous one at that just as the idea of communism has been to the world.
- 20yrs_no_equity 10y ago
  Your argument is kinda like pouring brown paint into a can of white paint, pointing to its tan color and then saying that white paint is a fantasy. Yes there are various degrees of purity in capitalism across the world and one of the interestingly consistent things across history is that prosperity follows relative economic freedom, even if there is no purely free economy.
badsock 10y ago
There's already an FDA-approved, tried-and-tested method for delivering epinephrine: the one that Mylar has a patent on. It's stupid to force competitors to invent a completely different method to do the same thing, and then have them try to get it through FDA approval, just because Mylar is unwilling to license the patent to competitors at a reasonable rate. The fact that a company can just flat-out stop an idea from being implemented by anyone else for 20 years is insanity. There needs to be a mechanism that incentivises patents being licensed, rather than withheld and used as an anti-competitive bludgeons. Something like a means of finding a reasonable value for a patent (hopefully via some market mechanism) that takes into account the cost of invention, and then requiring the patent be licensed for that amount to anyone. If you look at the situation with Microsoft and Android, it's crystal clear: the patents in question are pathetic, and yet they're being used to extort billions of dollars. It's such a massive distortion, and leads to huge duplication of effort and wasteful incompatibilities, and in this case lives at risk.
- grandalf 10y ago
  The patent system is full of tradeoffs. Maybe patents should only last for 3 years, maybe 10, etc. But for all its tradeoffs, patent protection does create an incentive for massive investment in R&D. It's difficult to imagine a meaningful counterfactual scenario. Of course, bad patent office execution (leading to patent trolling, etc.) is parasitic and harms the system as a whole. But what about the FDA? The FDA is notoriously overly risk-averse when it comes to approving new treatments. It simply should not be hard to get a competing delivery mechanism approved. It's easy to test, the test of whether the mechanism works can be repeated at nearly zero cost thousands of times, offering substantially more data than the typical drug approval process yields (when the question is whether a drug is safe long term). If you are an FDA regulator, the only way you can really lose your job and pension is by approving a drug that should not have been approved. Nobody is keeping score of the suffering and loss of life caused by sluggish approvals.
  - badsock 10y ago
    I would argue that the FDA is that risk adverse because society is that risk adverse. And while I completely agree that those R&D billions should be compensated, when the go-to strategy for patents is to do a complete parallel re-invention rather than just pay the inventor, my stance is that the trade offs made by the current system are inefficient and damaging.
rdtsc 10y ago
> of a very noncompetitive situation created by various cronies and abetted by regulators. Isn't regulatory capture the most efficient and cost-effective way to maximize profits? Companies would have to be stupid not to do it. And not to rely on campaign contribution, lobbying, messing with local, state and national elections. This is the real capitalism. We are in the middle of it. > it's nothing like a market that allows competition That is the market. The market includes the government. There is no such thing as government interfering with the market vs nice companies competing with each other, guided by the Adam Smith's hand. That world doesn't exist. It never will. We might as well be talking about the Star Trek universe here.
- grandalf 10y ago
  I agree with you, I simply call it crony-corporatist capitalism. I agree that there may not be any such thing as the idealized form. However: - Our system has many biases toward over-centralization, and the idea that we should have one Federal entity completely in charge of drug approvals is pretty absurd. Why not encourage many other groups to make recommendations. Why can't the FDA have its own list, as well as a list made by the AMA, major HMOs etc. Why not also consider the list used in the UK, etc. When we a) combine effectiveness research with b) a public health mandate and c) risk-averse career burocrats, we end up with our current system. If our government weren't in the business of coordinating regulatory capture games, it would simply relinquish control of absolute authority, and allow respected third party institutions to have a voice. If your doctor prescribes drug x simply because it's FDA approved, that is very much the wrong decision. The side-effect for Vioxx that led to it being pulled was well known to doctors (and applies to all NSAIDs), and so any doctor who let a patent suffer with Vioxx was at somewhat clueless if not negligent. So yes, the government is yet another corrupt firm with a monopoly on certain things that it abuses for profit, harming all of us in the process. > This is the real capitalism Our economy contains some areas that are heavily corrupt and not very competitive, and others that are under the radar and are highly competitive.
  - rdtsc 10y ago
    > Why can't the FDA have its own list, as well as a list made by the AMA, major HMOs etc. Why not also consider the list used in the UK, etc. That is a pretty good idea. It makes sense. One instance where this happens is in Common Criteria Certification (the EAL levels). There is a mutual agreement between countries. And for example RedHat is going to Germany to get the EAL-4 certification for RHEL. Doing it in the US was too time consuming and expensive. https://www.redhat.com/en/about/blog/red-hat-enterprise-linux-7-evaluation-common-criteria-certification https://www.redhat.com/en/about/blog/red-hat-enterprise-linu...

poopsintub 10y ago

Right, is that not exactly what is supposed to happen? Performance and profits are directly related to pay, especially when you're publicly traded.

ceejayoz 10y ago

> perhaps (gasp) a startup would have started selling epi pens The first version of Soylent lacked iron because Rhinehart couldn't be bothered to Google basic nutrition requirements. We've tried the no regulation medical market. The term "snake oil salesman" exists because of it.

grandalf 10y ago
> The first version of Soylent lacked iron because Rhinehart couldn't be bothered to Google basic nutrition requirements. Yet it is legal for someone to subsist only on Doritos. Why not regulate those too.
- allengeorge 10y ago
  No one markets Doritos as a complete nutrition substitute. They're not equivalent at all.
cookiecaper 10y ago
You're talking about different things. Foodstuffs can and should be regulated to a reasonable degree, and they are regulated, not only by the FDA but also by state departments of agriculture and local departments of health. Whether an early iteration of Soylent should've been legal or not is beside the point. The point is that, iirc, Mylan has a government-granted monopoly on the EpiPen via a patent for the injection mechanism. That means Mylan is the only company that is legally allowed to manufacture it in the United States. In addition, it takes millions of dollars to bring a treatment through the slow FDA approval process (though it's not clear if this is necessary to compete with EpiPen), so even if someone was somehow able to circumvent and/or license any patents Mylan may hold, it'd still take herculean resources to bring a competitor to market. That's what the grandparent is talking about. The EpiPen can be so expensive because no one else is legally allowed to sell a substantially similar device without Mylan's permission. When the consumer has only one option, especially for something as crucial as a life-saving medication, things are really bad, whether the economic system that consumer is living under calls itself "capitalism" or something else. We've got to fix our intellectual property laws, both patent and copyright. A large part of the Fortune 500 is only there because of the excessive legal monopolies that we've granted through intellectual property (which means it'll be basically impossible to fix).
- ceejayoz 10y ago
  > The point is that, iirc, Mylan has a government-granted monopoly on the EpiPen via a patent for the injection mechanism. No, they don't. The EpiPen's patent is long expired. https://www.google.com/patents/US4031893 https://www.google.com/patents/US4031893
  - cookiecaper 10y ago
    I know that some patents on the device have expired. However, there still seems to be frequent reference to Mylan's current eligibility for patent protection. Here's one such reference from a New York Times editorial, published today [0]: >Today that same tiny, lifesaving bolus of epinephrine — used mostly to treat severe allergic reactions — is delivered via sometimes elaborate devices called auto-injectors. Though the medicine itself hasn’t changed, the delivery devices have been protected by patents, enabling drug makers to charge ever escalating — sometimes prohibitive — prices for one of the oldest drugs in medical use. It doesn't say which patents specifically may cover the EpiPen, but as far as I can tell, the consensus is that the device is patent protected. I would love to know if there's definitive evidence either way -- specifically which patents Mylan claims to be protected under, or whether this is in reality just a common assumption/myth. [0] http://www.nytimes.com/2016/09/04/opinion/sunday/the-lesson-of-epipens-why-drug-prices-spike-again-and-again.html http://www.nytimes.com/2016/09/04/opinion/sunday/the-lesson-...

rayiner 10y ago

There was an FDA approved competitor. It got pulled from the market because of fears it wasn't delivering the right dosage, and the company selling the drug wasn't willing to put up with the potential liability.

grandalf 10y ago
Perhaps they knew the design was flawed, or perhaps they made a very foolish decision (since they would have profited handsomely if the design could be fixed).
- 20yrs_no_equity 10y ago
  Any potential profit must be balanced against the highly political question of whether the fix (assuming one was needed) would get thru the FDA, and at what cost, how many bribes, or more politically correctly put, campaign contributions would be needed and whether even doing so would be sufficient to make it onto the market with a revised version. It's not like these decisions are being made purely on a scientific basis.
  - harryh 10y ago
    I have just as many problems with an overly restrictive FDA as the next free market guy, but there isn't really a lot of evidence that the issues are due to political corruption. In reality the FDA is too conservative due to the incentive structure: people getting hurt from a drug approved too fast are very visible. People that get hurt due to a drug being approved too slowly are not. This is the core issue.
maxerickson 10y ago
There is a competitor. Adrenaclick is not a perfect substitute for Epipen, but it is an auto-injector and delivers the same drug. There are also companies making generics for Adrenaclick, they cost ~$140.

joesmo 10y ago

Just because our system falls so far outside the ideology it claims to espouse does not mean it's not capitalism. Just as the reality of communism was far from the ideology, so is our reality of capitalism. I'd argue, however, that this is capitalism. How things should work is a fantasy. They do not work the way you describe in most 'capitalist' systems (US, European countries, China). I'd argue that what you call capitalism doesn't exist and pretending that it does supports and fuels the current system and state of affairs by legitimizing the idea of capitalism when the actuality of capitalism is not so rosy (hundreds of dollars for an EpiPen). The idea of capitalism that you espouse, I'd argue, is mere fantasy and delusion and a rather dangerous one at that just as the idea of communism has been to the world.

20yrs_no_equity 10y ago
Your argument is kinda like pouring brown paint into a can of white paint, pointing to its tan color and then saying that white paint is a fantasy. Yes there are various degrees of purity in capitalism across the world and one of the interestingly consistent things across history is that prosperity follows relative economic freedom, even if there is no purely free economy.

badsock 10y ago

There's already an FDA-approved, tried-and-tested method for delivering epinephrine: the one that Mylar has a patent on. It's stupid to force competitors to invent a completely different method to do the same thing, and then have them try to get it through FDA approval, just because Mylar is unwilling to license the patent to competitors at a reasonable rate. The fact that a company can just flat-out stop an idea from being implemented by anyone else for 20 years is insanity. There needs to be a mechanism that incentivises patents being licensed, rather than withheld and used as an anti-competitive bludgeons. Something like a means of finding a reasonable value for a patent (hopefully via some market mechanism) that takes into account the cost of invention, and then requiring the patent be licensed for that amount to anyone. If you look at the situation with Microsoft and Android, it's crystal clear: the patents in question are pathetic, and yet they're being used to extort billions of dollars. It's such a massive distortion, and leads to huge duplication of effort and wasteful incompatibilities, and in this case lives at risk.

grandalf 10y ago
The patent system is full of tradeoffs. Maybe patents should only last for 3 years, maybe 10, etc. But for all its tradeoffs, patent protection does create an incentive for massive investment in R&D. It's difficult to imagine a meaningful counterfactual scenario. Of course, bad patent office execution (leading to patent trolling, etc.) is parasitic and harms the system as a whole. But what about the FDA? The FDA is notoriously overly risk-averse when it comes to approving new treatments. It simply should not be hard to get a competing delivery mechanism approved. It's easy to test, the test of whether the mechanism works can be repeated at nearly zero cost thousands of times, offering substantially more data than the typical drug approval process yields (when the question is whether a drug is safe long term). If you are an FDA regulator, the only way you can really lose your job and pension is by approving a drug that should not have been approved. Nobody is keeping score of the suffering and loss of life caused by sluggish approvals.
- badsock 10y ago
  I would argue that the FDA is that risk adverse because society is that risk adverse. And while I completely agree that those R&D billions should be compensated, when the go-to strategy for patents is to do a complete parallel re-invention rather than just pay the inventor, my stance is that the trade offs made by the current system are inefficient and damaging.

rdtsc 10y ago

> of a very noncompetitive situation created by various cronies and abetted by regulators. Isn't regulatory capture the most efficient and cost-effective way to maximize profits? Companies would have to be stupid not to do it. And not to rely on campaign contribution, lobbying, messing with local, state and national elections. This is the real capitalism. We are in the middle of it. > it's nothing like a market that allows competition That is the market. The market includes the government. There is no such thing as government interfering with the market vs nice companies competing with each other, guided by the Adam Smith's hand. That world doesn't exist. It never will. We might as well be talking about the Star Trek universe here.

grandalf 10y ago
I agree with you, I simply call it crony-corporatist capitalism. I agree that there may not be any such thing as the idealized form. However: - Our system has many biases toward over-centralization, and the idea that we should have one Federal entity completely in charge of drug approvals is pretty absurd. Why not encourage many other groups to make recommendations. Why can't the FDA have its own list, as well as a list made by the AMA, major HMOs etc. Why not also consider the list used in the UK, etc. When we a) combine effectiveness research with b) a public health mandate and c) risk-averse career burocrats, we end up with our current system. If our government weren't in the business of coordinating regulatory capture games, it would simply relinquish control of absolute authority, and allow respected third party institutions to have a voice. If your doctor prescribes drug x simply because it's FDA approved, that is very much the wrong decision. The side-effect for Vioxx that led to it being pulled was well known to doctors (and applies to all NSAIDs), and so any doctor who let a patent suffer with Vioxx was at somewhat clueless if not negligent. So yes, the government is yet another corrupt firm with a monopoly on certain things that it abuses for profit, harming all of us in the process. > This is the real capitalism Our economy contains some areas that are heavily corrupt and not very competitive, and others that are under the radar and are highly competitive.
- rdtsc 10y ago
  > Why can't the FDA have its own list, as well as a list made by the AMA, major HMOs etc. Why not also consider the list used in the UK, etc. That is a pretty good idea. It makes sense. One instance where this happens is in Common Criteria Certification (the EAL levels). There is a mutual agreement between countries. And for example RedHat is going to Germany to get the EAL-4 certification for RHEL. Doing it in the US was too time consuming and expensive. https://www.redhat.com/en/about/blog/red-hat-enterprise-linux-7-evaluation-common-criteria-certification https://www.redhat.com/en/about/blog/red-hat-enterprise-linu...