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View Diary: Science Friday: The Breath of Life (138 comments)

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  •  The necessities v. luxuries divide is wrong. (0+ / 0-)

    Lots of real necessities, food, clothing and housing, for example, are provided perfectly well through a primarily market mechanism.  Being necessary isn't what makes the market problematic for drugs.  If people can't afford necessities, the solution is to give them more money, not to redesign the goods market.

    (Likewise, the reason other necessities, like water, are provided by public enterprises for the most part, is not because they are necessities, but because of the economies of scale involved.  It is a natural monopoly.)

    The biggest reason that the market is doing a poor job with drugs has nothing to do with their necessity.  It is a combination of the fact that most of the value of a drug is government created intellectual property value rather than ordinary good value, and the fact that government is already and inextribably deeply involved in the market.

    Notably, nobody is complaining seriously about problems with the generic drug market.  It is working just fine to provide quality products at a reasonable price to large numbers of people, largely free of political games, with only minimal government involvement mostly to insure safety standards, just like the markets for food, clothing and housing.

    What the market is turning out to be doing a rather poor job of doing is financing drug research.  It isn't that it doesn't finance drug research.  Private enteprise spends loads of money on drug research.  It's that the wrong people are paying for that research, that people are paying too much for that research, and that economic incentives to conduct that research don't match the health based needs very well.  

    "Those who can make you believe absurdities can make you commit atrocities" -- Voltaire

    by ohwilleke on Fri Jul 21, 2006 at 10:38:23 AM PDT

    [ Parent ]

    •  Agree with many, but not all of your comments... (0+ / 0-)

      I do appreciate your insight in this matter.  However, I do disagree with your assessment of some things...most notably affordable housing.  Low-income housing is no longer provided by market forces (heavily subsidized by government at this point).  Minimum wages (heck, even double to triple minimum wages) does not support non-subsidized housing purchases/rentals.

      Food is in an interesting category, how government subsidies are put out for that market is about as easy as following a dog chasing a rabbit through a thicket.

      I do think you are dead on with clothing.  That market (to my knowledge) isn't subsidized and seems to be working fine.  You have me on that one.

      I still think, however, that going back to the situation described in this diary, necessity is an issue.  A for-profit industry is going to go after 2 types of markets (yes, yes...I know there are hundreds of hybrid situations, but please bear with for simplicities sake - I don't want this post to be diary-sized).  A high-price market where the rich are impacted (and can afford), or a low-price, volume market where the masses are impacted.  A high-price market where the rich are relatively un-impacted (e.g. much of the cheap food available is highly refined and nutrient poor...which leads to multiple issues later in life...and represents a higher percentage of the diet of poor people) is not a market that a for-profit organization wants to go for.

      In any case, again, my main point isn't that for-profit business can't work.  My main point is that many times we focus on solving a problem with a specific framework.  I'm simply questioning whether that framework really needs to be adhered to.

      "Everyone wishes to have truth on his side, but not everyone wishes to be on the side of truth" - Richard Whately

      by unbound on Fri Jul 21, 2006 at 02:31:11 PM PDT

      [ Parent ]

      •  Just to be clear. (0+ / 0-)

        I'm not arguing that the market provides everyone with enough money to buy nutritious food or live in decent housing.

        Instead, what I am arguing is that in those cases, the market failure is not primarily on the housing provider or food provider side.  Instead, in those cases, the market failure is primarily on the distribution of income side.  There are sometimes some, usually short term, provider side problems -- housing shortages in fast growing areas, for example.  But, I'm not sure that the government would do better.  And, even then there is not a problem with the market in those cases because they are necessities.  California has an affordable housing problem because it has a land shortage and loads of people.  Alabama does not have those problems.

        Rent subsidies in housing built and operated by for-profit landlords tend to work at least as well, and often better, than designated housing projects operated by government for the benefit of the poor.  Government is not better at running apartment buildings than for profit landlords, who operate in a highly competitive, non-monopolistic marketplace.

        If the problem is income, give people more money.  If the problem is the provider market, fix the provider market.  For example, universal health insurance would probably greatly increase the profitability of drugs that treat conditions more common in the poor (e.g. nutritional deficiencies, or lead poisoning).

        The problem is that because the drug industry is broken, even if everyone had universal health insurance, the system would still be screwed up.

        "Those who can make you believe absurdities can make you commit atrocities" -- Voltaire

        by ohwilleke on Fri Jul 21, 2006 at 02:44:32 PM PDT

        [ Parent ]

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