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"I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the ri
by cs702 10y ago
"I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the risk of nurses contracting HIV through accidental needle sticks. The syringe received rave reviews from nurses, hospital executives and public health officials, a major grant from the National Institutes of Health and robust private investment. But when my partners and I tried to sell it to hospitals, we were told time and time again that even though it was a better product — a lifesaving product — they weren’t able to purchase it. The primary supplier of syringes, which controlled 80 percent of the market, structured an arrangement with a vast network of hospitals that essentially closed our industry to new firms for good."
A market in which buyers are not free to choose better products is not a free market.
A market in which new entrants cannot compete fairly against established players is not a free market.
A market in which innovators have to get permission and pay established players for "access" (think ISPs) is not a free market.
And yes, a market in which economic and political power is concentrated in large corporations geographically clustered in a handful of giant metropolitan areas... is also not a free market.
Those corporations have both strong incentives and the means to change the rules of competition to their advantage.
- thriftwy 10y agoNot the first time this story is on HN. I always wondered - why focus on selling to American hospitals which could not care less? If the problem is universal, pitch to elite European hospitals, especially Swiss. They cater for rich patients from all around the world and if it's a good idea they'll definitely be interested. Later on, when it catches, American hospitals will come to you too. Or maybe you will find that European hospitals has already figured this out in some way. Tough story, then.
- kayhi 10y agoThis is also a huge problem in scientific research supplies and chemicals.
- del82 10y agoOne quick question: why does it matter that the large corporations in which power is concentrated are geographically clustered? Would the situation be better if ceteris paribus the corporations were more geographically distributed?
- skummetmaelk 10y agoThat's the thing though, that is exactly what a late stage "free market" looks like. What you need is a heavily regulated market that prevents exactly this behaviour. People need to stop wishing for the "free" market. The term is abused by orators and manipulators who prey on peoples desire for a market which is free in the spirit of the word, and deliver to them a market which is technically "free" and horrible.
- wyager 10y ago> That's the thing though, that is exactly what a late stage "free market" looks like. How would you know? We haven't had anything approaching a free market since the early 20th century, even if we ignore government-granted monopolies via restricted land grants and patents.
- skummetmaelk 10y agoAt least to me it looks like making the market more "free" by means of deregulation would only exacerbate the problems mentioned above.
- arca_vorago 10y agoFree market != deregulation
- bobwaycott 10y agoSadly, it often does in the realm of public discourse as directed by politicians and the average voter who engages.
- sova 10y agoMaking the market "monopoly and oligopoly free" by regulation, as a synopsis.
- mikeyouse 10y agoThis is exactly the same argument people make in favor of socialism..
- zeusk 10y agoWhat you're describing is a fair market, not a free one.
- shmerl 10y agoFree market means free from monopolies as well.
- Qwertious 10y agoNonsense. Free market means the ideal market of whatever one's personal ideology thinks will work best. It's the economic version of "a perfect world", and everyone has a different vision of what "a perfect world" even means.
- zeusk 10y agoNonsense. Free market, which btw has grown to become a economical and political buzzword, is not "the ideal market of whatever one's personal ideology thinks will work best"; The core ideology behind it was to let the buyer and seller work on what works for them and keep third party interference to the least. Fair market imply either party is made aware of all the details behind the trade in case of which price discovery is impossible as the buyers won't buy above real value and sellers won't sell below real value. Anti-trust and Anti-monopoly laws that are sub-points of a fair market are inherently against the ideal free market. Also, theory does not really work in practice and no market is entirely free or fair.
- adrianN 10y agoNo it doesn't. https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly
- shmerl 10y agoIt does: > One view is that a free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. That's how I define it. Monopoly makes the market non free.
- wyager 10y agoI agree. Of course, most of the reticence to do anything new in medical care comes from extremely overwrought CYA policies. It's very hard to argue that these policies aren't the result of legislation particular to medicine, whether it's legally necessary (but patient-unfriendly) bureaucratization of medical care or insurance red tape brought on by legally enforced uniformity of insurance concerns.
- socialist_coder 10y agoI'm not sure what your point is. This isn't a free market because of monopolies or because of regulations? To me, it seems like we have a completely free market here... and that is the problem. Companies are free to create and exploit monopolies. It's the final state of a completely free market.
- ams6110 10y ago80% of the market is not an unassailable monopoly. Such things rarely if ever exist unless they are created by regulation.
- Aloisius 10y agoThat depends on the actions of the market leader no? There are any number of anticompetitive practices that the market leader can engage in to effectively eliminate any threat to their monopoly from tying to predatory pricing to exclusive deals.
- ams6110 10y agoDoesn't pass the smell test to me. So a big company had 80% of the market? What about the other 20%?
- mjevans 10y agoThink Intel, AMD, and um, who else makes desktop grade chips? (No, netbooks/tops don't count)
- bluejekyll 10y agoWhy not count those? ARM is much more democratized and is huge. With the advent of compiler backend abstractions being used in LLVM and GCC, it's even possible to target unique chips more easily. Intel is definitely no longer the monopoly player they were after the huge success of ARM in lower power environments.
- valuearb 10y agoIntel has never been a monopoly. There have always been dozens of competitors in most of their markets. Even at the height of Wintel, there was AMD and others. Intel didn't win there because it was able to shut out competitors, those competitors copied Intel designed instruction sets and Intel couldn't stop them from doing it. Intel dominated the market because of their better processes.
- Aloisius 10y agoFrom an antitrust perspective, a monopoly is simply a firm with significant and durable market power with courts having typically set that to having over 50% marketshare within a certain geographic area. Intel certainly qualifies.
- bko 10y ago> A market in which buyers are not free to choose better products is not a free market. Most businesses can choose better products (not sure about hospital industry). They can also choose to sign an agreement that makes a supplier relationship exclusive. For instance, a restaurant can sign an agreement to accept only Mastercard. Is this not a free market?
- valuearb 10y agoA restaurant that agrees to exclusively accept Mastercard would be out of business very quickly (no matter how much Mastercard lowered its fees for them). That's why we don't have to regulate such behavior.
- bko 10y agoSo what you're saying is that market forces prevent this behavior that harms consumers and pushes an inferior product?
- valuearb 10y agoI'm saying I don't know what market forces allow an Applebees to survive.
- twoodfin 10y agoNot a restaurant, but Costco used to accept only Amex as a credit card (debit was a different story) and now only accepts Visa.
- JackFr 10y agoYeah so the point is that if the only restaurant in the USA is Applebee's and they sign an exclusive agreement with Mastercard, they are extending their monopoly -- likely illegally in the US: "But exclusive dealing also can be anticompetitive in some circumstances. For example, exclusive dealing may allow one manufacturer, in effect, to monopolize efficient distribution services and thereby prevent its rivals from competing effectively. As then-Judge Breyer explained, exclusive dealing can harm consumers by thwarting entry or inhibiting the growth of existing rivals: 'Exclusive dealing arrangements may sometimes be found unreasonable under the antitrust laws because they may place enough outlets, or sources of supply, in the hands of a single firm (or small group of firms) to make it difficult for new, potentially competing firms to penetrate the market. To put the matter more technically, the arrangements may "foreclose" outlets or supplies to potential entrants, thereby raising entry barriers. Higher entry barriers make it easier for existing firms to exploit whatever power they have to raise prices above the competitive level because they have less to fear from potential new entrants.'" https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-8 https://www.justice.gov/atr/competition-and-monopoly-single-...
- zekevermillion 10y agoThat kind of arrangement already clearly illegal if the hospital takes government healthcare funds.
- deleted 10y ago[deleted]
- leakybit 10y agoQuite frankly, auto retracting syringes suck ass, which is way 20+ years later, they're still not commonly used in healthcare facilities.
- WalterBright 10y agoThe medical industry, including the medical device industry, is the most heavily regulated industry in the US. It's far from free market.
- mschuster91 10y agoAlso, airspace (FAA) and railways. And the regulations exist for good reason - f..k stuff up and people die. The problem arises when regulations are not kept up-to-date or the regulators are being outright bought (like in financial services), and that must change.
- WalterBright 10y ago> 80 percent of the market What about the other 20%? what about the international market? what about the non-hospital market (i.e. people who inject themselves, such as diabetics, at home)?
- ivanhoe 10y agoThe trick is in how you define "the better". Problem is that hospitals don't buy just syringes, they buy lots of medical supplies at once, and corporations can offer much better deals on such orders, you can just buy everything at once. They then use that position to push exclusive deals with hospitals and kill the small players. It is still a free market at work, hospital gets the best deal business-wise, but it has retrograde effects on the progress and end-users.
- flamedoge 10y agoWhat about outside of US?
- Spooky23 10y agoThat's why I always eyeroll when people in forums like this talk about the free market. Many many corners of the economy are little vertical command economies. Fiscal policy, de-toothing of regulators, and allowing large players to form cartels is the antithesis of free market. Markets require a firm regulatory hand to be free. Medical is a great example. Between strategic sourcing in hospitals that killed all of the little companies making medical supplies, the CVS/Walgreens/RiteAid/ExpressScripts shitshow that eliminated meaningful retail and wholesale drug competition, and now the formation of regional medical cartels is a planned economy more valuable than the Soviet Union was. In 10 years we'll be back to the Bell System for telecommunications, without the consumer protections and firm controls of tariffs that blunted the impact of the AT&T monopoly.
- maxxxxx 10y agoI am not sure how to pull this off in practice but I think it would be healthy for an economy if companies couldn't grow beyond a certain size. Once companies get too big they pretty much kill new and innovative companies. Just look at how quickly small companies in the 70s and early 80s innovated around personal computing and how little innovation is happening in the smart phone or search engine area now because Google and Apple are pretty much trampling over the small guys. Again, I have no idea how to do this in practice.
- Network2020 10y agoHmmm I believe that the Google/Apple smartphone issue is squarely the result of developers (the same ones who complain about Android and IOS). Manufacturers could create smartphone after smartphone, but if developers don't build apps to make the phones attractive, consumers aren't interested in purchasing. Developers, unfortunately, are the ones blocking out other smartphone makers.
- maxxxxx 10y agoIt's a feedback loop. Without developers a platform can't thrive but without users of the platform the developers can't afford to write apps for the platform.
- fuzzfactor 10y agoAnother element is that a monopolistic institution can often afford to wait until expiration of any promising patents and that appears to be a factor in this case as well: At Retractable, "Shaw still isn’t any closer to breaking into the hospital market, and in the meantime the life on his patents is dwindling." "So he has partnered with Chinese companies, which put up money to build assembly lines in China in return for permission to produce his syringes for the Chinese market. When his patents do run out, the Chinese manufacturers will be the ones poised to bring his technology to the world market, meaning all the jobs and economic benefits that could have gone to the local residents will instead go to the people of Gansu Province." http://washingtonmonthly.com/magazine/julyaugust-2010/dirty-medicine-2/ http://washingtonmonthly.com/magazine/julyaugust-2010/dirty-...
- tiatia 10y ago"A market in which buyers are not free to choose better products is not a free market." Which is not the case here. If I sign a one year gym contract and suddenly a much better, much cheaper gym opens across the street, I can whine that the gym market is "not free". In fact it is, not like "free" in "free beer" but in "free" like in "freedom". But if I insist of using the better gym instantly I may have to pay for two gyms at the same time.
- 6t6t6t6 10y agoThe paradox is that a market, in order to be free, needs regulation. Markets don't tend to entropy by themselves.
- grecy 10y ago>is not a free market One of the things that fascinates and terrifies me most about American political discourse is this need to label things, and then have those labels divide people into polar opposites so they argue endlessly about the label, instead of the actual issue. Really, who gives a s&%t what the hell you call the system you have now. It's completely meaningless. What really matters is you decide if it's good or not, and what to do about fixing it. THAT'S what really matters. Americans have forgotten the point is to actually get around to improving things, they are so busy arguing about labels. "Single Payer" vs "Socialism", "Theocracy" vs. "Democracy", etc. etc.