3 ms·

You make two points. First, you say that "free enterprise" is not the only problem and you cite things like the artificial restriction on the supply of doctors.

You make two points. First, you say that "free enterprise" is not the only problem and you cite things like the artificial restriction on the supply of doctors. Then you suggest simpler fixes for the US system. Your first point does not persuade me, because I live in Canada where we also have restrictions on doctors. We have thousands of foreign trained doctors driving taxis because the powerful medical lobby won't let them practice. My wedding photos were taken by a Filipino cardiologist! We buy and sell the same drugs you do, from the same companies. So our costs ought to be the same as yours. Yet somehow Canadian pharmacies are selling brand-name drugs to Americans for less than what your pharmacies pay! It may be valuable to split hairs and say "it's not the free market at fault." To which I reply, American markets aren't free and never have been. Your "free market capitalism" is actually a series of interconnected oligopolies where a few powerful players control the market and use lobbying to errect barriers to free enterprise. Like your patent system. Or your Disney/Bono laws controlling copyrights and copying of creative works. I'm prepared to believe that free market capitalism might work, but I am skeptical that such a thing has existed or will exist in the USA during my lifetime.

euroclydon 17y ago
You know Canada just has price restrictions on drugs, right? The US doesn't, so we subsidize the cost of drugs for all the other countries that have price restrictions. If we implemented those restrictions too, the financial numbers for the drug companies would suddenly become much different, not without consequences.
- raganwald 17y ago
  Yes I know that we do things differently than you do and I think the point of the OP is that the consequences of our doing things differently is that we provide health care more universally and more efficiently. The drug companies spend hundreds of millions if not billions telling you that there would be dire consequences if they couldn't patent their work six ways from Sunday and charge amazing amounts of money for a few pennies worth of chemicals. They remind me greatly of your entertainment oligopolies, right down to the way they control your laws through their lobbying prowess. Asking a drug company what would happen if you asked them to charge less is like asking the fox what would happen if you locked the door to the chicken coop.
- wmoxam 17y ago
  Sounds like a good story, one that is often repeated in the US. Unfortunately it's not entirely true. The facts: * There are severe restrictions on prescription pharmaceutical advertising in Canada. For example, access to product information on pharmaceutical 'brochureware' sites is restricted by 'password' (I developed many of these sites for Pfizer years ago). Television advertising is limited to brand recognition type ads, the ad can't actually tell you what the drug does. * The result of these restrictions has lead to far less marketing costs for pharmaceuticals. * Medicare pharmaceutical guidelines (PMPRB) do impose price increase restrictions after they have been introduced to the market, and stated in it basic manner, will not endorse drugs that achieve the same effect as current drugs, yet cost more. * Canadian gov't provides plenty of tax subsides for pharmaceutical research So yes, while there are pricing guidelines, it's not a one way street, there a bit of give and take here. In exchange for following pricing guidelines, companies receive generous tax credits for research. The (intended) effect of pricing on advertising guidelines is designed to guide doctors to prescribe the best (from a cost/effectiveness standpoint) drug, rather than the 'new thing' or the one their patient is demanding due to seeing it advertised repeatedly on television. This idea that the US is subsidizing the cost of drugs for other countries is silly. Drugs of US origin would not be sold abroad if it weren't profitable to do so. And given the 'free market' in pharmaceuticals in the US, wouldn't drugs be sold at the most profitable price anyways, regardless of market conditions elsewhere?
bokonist 17y ago
To which I reply, American markets aren't free and never have been. Your "free market capitalism" is actually a series of interconnected oligopolies where a few powerful players control the market and use lobbying to errect barriers to free enterprise. Economic sectors can fall in three general categories: 1) free market ( low or no regulation, freedom of contract, no legal barriers to entry, people voluntarily choose to buy their product, freedom to make profits, freedom to take losses) - Examples include: most manufacturing, retail, entertainment, electronics, furniture, cars, clothes, lasic surgery, trucking, shipping, tourism, software 2) guild & cartel - businesses or associations recieve numerous special privileges and legal barriers to entry. One example is the banking sector and the special access to the lender of last resort and to bailouts. Another is the doctors associations and their monopoly right to dispense life saving pills. 3) socialized - a sector that is under operational management by the government. For instance, the public education system or the park system. The basic test for a free market is this: If I wanted to start a business to compete with player X in this industry, would I be thwarted or hindered by the government in doing so? America as whole has never been a perfect & absolute pure free market. But certain sectors tend to pretty come close the ideal. And its those sectors that tend to produce products of increasing quality and lower prices. The sectors that seem to have endemic problems that end up being the subject of national debates, are all in categories 2 and 3 (finance, healthcare, and education). Of course there is no easy way to go from 3) to 1) or 2) to 1). A socialized system is a system of both price controls and restricted entry. If you remove just the price controls, you have given the industry a license to rake the consumers over the coals. Thus your path from 3) to 1) actually makes things worse. This is the fatal law of many of the Cato libertarians. At the end of the day, competency of the government is still important no matter what path is chosen.

euroclydon 17y ago

You know Canada just has price restrictions on drugs, right? The US doesn't, so we subsidize the cost of drugs for all the other countries that have price restrictions. If we implemented those restrictions too, the financial numbers for the drug companies would suddenly become much different, not without consequences.

raganwald 17y ago
Yes I know that we do things differently than you do and I think the point of the OP is that the consequences of our doing things differently is that we provide health care more universally and more efficiently. The drug companies spend hundreds of millions if not billions telling you that there would be dire consequences if they couldn't patent their work six ways from Sunday and charge amazing amounts of money for a few pennies worth of chemicals. They remind me greatly of your entertainment oligopolies, right down to the way they control your laws through their lobbying prowess. Asking a drug company what would happen if you asked them to charge less is like asking the fox what would happen if you locked the door to the chicken coop.
wmoxam 17y ago
Sounds like a good story, one that is often repeated in the US. Unfortunately it's not entirely true. The facts: * There are severe restrictions on prescription pharmaceutical advertising in Canada. For example, access to product information on pharmaceutical 'brochureware' sites is restricted by 'password' (I developed many of these sites for Pfizer years ago). Television advertising is limited to brand recognition type ads, the ad can't actually tell you what the drug does. * The result of these restrictions has lead to far less marketing costs for pharmaceuticals. * Medicare pharmaceutical guidelines (PMPRB) do impose price increase restrictions after they have been introduced to the market, and stated in it basic manner, will not endorse drugs that achieve the same effect as current drugs, yet cost more. * Canadian gov't provides plenty of tax subsides for pharmaceutical research So yes, while there are pricing guidelines, it's not a one way street, there a bit of give and take here. In exchange for following pricing guidelines, companies receive generous tax credits for research. The (intended) effect of pricing on advertising guidelines is designed to guide doctors to prescribe the best (from a cost/effectiveness standpoint) drug, rather than the 'new thing' or the one their patient is demanding due to seeing it advertised repeatedly on television. This idea that the US is subsidizing the cost of drugs for other countries is silly. Drugs of US origin would not be sold abroad if it weren't profitable to do so. And given the 'free market' in pharmaceuticals in the US, wouldn't drugs be sold at the most profitable price anyways, regardless of market conditions elsewhere?

bokonist 17y ago

To which I reply, American markets aren't free and never have been. Your "free market capitalism" is actually a series of interconnected oligopolies where a few powerful players control the market and use lobbying to errect barriers to free enterprise. Economic sectors can fall in three general categories: 1) free market ( low or no regulation, freedom of contract, no legal barriers to entry, people voluntarily choose to buy their product, freedom to make profits, freedom to take losses) - Examples include: most manufacturing, retail, entertainment, electronics, furniture, cars, clothes, lasic surgery, trucking, shipping, tourism, software 2) guild & cartel - businesses or associations recieve numerous special privileges and legal barriers to entry. One example is the banking sector and the special access to the lender of last resort and to bailouts. Another is the doctors associations and their monopoly right to dispense life saving pills. 3) socialized - a sector that is under operational management by the government. For instance, the public education system or the park system. The basic test for a free market is this: If I wanted to start a business to compete with player X in this industry, would I be thwarted or hindered by the government in doing so? America as whole has never been a perfect & absolute pure free market. But certain sectors tend to pretty come close the ideal. And its those sectors that tend to produce products of increasing quality and lower prices. The sectors that seem to have endemic problems that end up being the subject of national debates, are all in categories 2 and 3 (finance, healthcare, and education). Of course there is no easy way to go from 3) to 1) or 2) to 1). A socialized system is a system of both price controls and restricted entry. If you remove just the price controls, you have given the industry a license to rake the consumers over the coals. Thus your path from 3) to 1) actually makes things worse. This is the fatal law of many of the Cato libertarians. At the end of the day, competency of the government is still important no matter what path is chosen.