The American Politics thread

[Flem274*]

Pharma ftl. I try to avoid smashing myself with drugs when I get sick, because I don't want to be one of those people who gets sick easier because they're taking weapons grade material for their sniffles and all their useful bacteria has suffered a nuclear holocaust.

[Spark]

Do you know what would happen if you deregulated medicine, essentially privatising oversight?

The pharmaceuticals, with their insane amounts of money and lobbyists, would find the most pliable, easy target and saturate them with money, lobbying pressure and what not. And then accept only them as the valid certifying body. That is not regulation.

That is rubber-stamping.

Sure, most medicine would still work, simply by the nature of the market itself. But because you have no choice not to buy medicine when you get sick and hence no way of using your most powerful market power - the "boycott" - the chance of poor, even dangerous drugs would be massively, massive increased by comparison.

Not to mention the aforementioned issues with neccesary research slowing to a crawl. The pharmaceutical industry is the only industry I am aware of where you make more money by not doing your job properly. By not making proper antibiotics, new antivirals, disease has an easier time propogating and becoming more dangerous. And the result - more people get sick! More people buy your drugs because they have to and you make more money! What a wonderful example of the free market as it's supposed to work.

As I said, I am a free-marketeer at heart, and there a lot of industries which could have a look at how they are regulated.

This is not one of them.

[Spark]

Originally Posted by Flem274*

Tell us what you really think Spark.

It's ****ing sickening when you read about it.

What makes me most angry is that I can do ****-all about it, because I get sick, I still need to take Panadol and anti-virals and continue the same cycle. I have no choice in the matter.

Ugh. This is probably the most left-wing "Occupy"ish you'll ever see me.

[Flem274*]

Pharma companies are indeed massive ****s.

[Ikki]

Originally Posted by Spark

Hahaha wtf? Specialist private bodies competing with each other for medical certifications?

Medical certifications of doctor's? I fear you've misunderstood me.

I'm not even going to list the problems with that, it'd take half an hour. For one thing, how are these bodies supposed to make a profit without ridiculous amounts of financial lobbying?

They would be funded by providing a service to the drug companies re their Testing services. They gain a reputation amongst people and the drug companies will want these recommendations. That's a proposition I've thought of. Someone like Friedman states that the free market itself is enough.

"Moreover, these bodies would not have the political force to stop helpful medicines coming because of the lobbying of others. It would be purely in the interest of serving the needs of the sick, and they could only keep their reputation as a board by being careful." Sorry, but do you have any idea how the pharmaceutical industry works at all? Do you know why we haven't had a genuinely new broad-specturm antibiotic in decades? Hint: it isn't because of over-regulation. It's because it's far more financially lucrative to keep pumping out painkillers and old anti-biotics which make them a ****-ton of money in the meantime. And as a result we've got a huuuuuuuge health crisis coming up in a few decades when we suddenly find some new flu strain which is high resistant to modern anti-virals and easily transmittable. What joy - but it's completely inevitable. There's already deep concern about superbug outbreaks in hospitals which are borderline untreatable because pharmas haven't got off their ass and bothered to find any new antibiotics in **** knows how long.

Why has there not been a stupid amount of money thrown by Pfizer, Merck et al at finding a chloroquine replacement despite that that is arguably the biggest health challenge of our time? Why is that being left to universities? Because people in Africa have no money, that's why. Far more lucrative to sell Panadol by the bucketload to us folks with common cold.

**** pharmaceuticals. I'm a free-marketeer but they are the worst example of the free market in play. Because you have no choice in the matter. If you get sick, you have to buy drugs to treat it short term. You have to buy painkillers. There's competition, sure, but it's the same. ****ing. drug.

This is one industry which requires far more government oversight, not less. For far too long they've been given a blank cheque to do whatever they damn well please, and have been consistently blocking any attempts to make them develop the drugs we will need in the future because it costs them too much money in the meantime. Well, yeah, sure, and how many millions of people are going to die in the next few decades because of it?

Unfortunately, the government is the number one perpetrator against change. It gets lobbied by such interests against those that could have more benefits for consumers for the cost of profits.

But, in the end, consumers have to be responsible. If they want a safer drug or one that costs less, then they have to actively vote that way out of their pockets - but they can only do so if the drug gets to market. The great irony is that the FDA is the known gatekeeper for new drugs coming to the market and have been politically influenced into doing so. Look into Stanislaw Burzynski.

Let's be clear; you cannot be for free-trade and then call for regulations like these. That is an oxymoron.

And you are certainly not for them like someone like Friedman. He also touches on patent controls as a barrier for new medicine:

Milton Friedman: Close Borders to Protect Patents

Let me start with Dr. Friedman. You are the ultimate free market pro-capitalist economist in the world. I think that is not an understatement. Some people say that if something is cheaper somewhere else, let’s import it into this country. But the question of price controls does complicate matters. Do you favor the importation or re-importation of pharmaceuticals from Canada?

Friedman: My initial reaction when I first was asked this question was to say yes. But the more I’ve thought about it, the more I’ve come to the belief that it’s not an issue of free trade at all, and that the right answer is not re-importation.

Glassman: I know you signed a statement with 140 other economists in opposition because of this issue of price controls. Maybe you could explain that, why you feel this is a different case and is not a case of free trade.

Friedman: Oh, it’s not a case of price controls, that isn’t the issue, either. The issue is patents. The issue is a government-granted monopoly and whether that, how extensively the rights that are granted for that purpose extend. The real issue is not really re-importation. The real issue in my opinion is the Food and Drug Administration. The FDA in the United States has followed policy, which means that it costs roughly $800 million to bring a single new drug entity to the market. And the question is where is that $800 million going to come from? The answer that we have given, whether the right answer or the wrong answer, the answer we have given is that it’s going to come by giving the producer of the drug a patent, a monopoly privilege to sell that drug, to exclude others from the sale of that drug.

And the question is, are you going to enforce that exclusion? The only way in which that $800 million can be raised is by charging very high prices to some people. Now, the question is given that you’re charging those high prices to some people, is it okay to charge low prices to some people? This is a standard case of a monopoly which engages in price discrimination as a way of maximizing its income. It charges high prices where the elasticity of demand is low, it charges low prices where the elasticity of demand is relatively high to the citizens of other countries.

Consider the following case: Suppose somebody in Canada simply counterfeits a patented drug. Does free trade require that the US accept importation of that drug? I think the answer’s no, if you’re going to enforce the patent, you have to keep out such counterfeits. Well, fundamentally and from an economic point of view, essentially when drugs that are purchased in the United States under a contract that they will be sold in Canada, or instead shipped to the United States, that’s the same thing. That’s violating the patent law. And the question is should the US government enforce one aspect of the patent and not another? That’s the real issue.

There’s no denying the fact that prices are cheaper in Canada. But the purpose of the law, the purpose of the patent was to enable the patent owner to make enough money to pay for the cost of producing the drug. And that’s not going to be possible unless you have price discrimination. And price discrimination adds to human welfare, it permits a larger number of people around the world to have the drug than it could otherwise do so.

[Ikki]

Originally Posted by Spark

Do you know what would happen if you deregulated medicine, essentially privatising oversight?

The pharmaceuticals, with their insane amounts of money and lobbyists, would find the most pliable, easy target and saturate them with money, lobbying pressure and what not. And then accept only them as the valid certifying body. That is not regulation.

That is rubber-stamping.

Unfortunately, you appear to have a misunderstanding of the free markets. How could the pharma companies lobby the government when there is a free market? There is nothing to lobby for, in order to abuse that power.

They are therefore responsible for only producing a competitive product.

Sure, most medicine would still work, simply by the nature of the market itself. But because you have no choice not to buy medicine when you get sick and hence no way of using your most powerful market power - the "boycott" - the chance of poor, even dangerous drugs would be massively, massive increased by comparison.

No, it wouldn't. At least no more than when the FDA exists. If the drug companies pump out harmful medicines they get sued and worse they lose revenue and go bankrupt. That is the nature of the market. You incorrectly extrapolate the situation to where the companies can continuously make bad choices for the welfare of their consumers. They can't after they've lost all confidence.

Not to mention the aforementioned issues with neccesary research slowing to a crawl. The pharmaceutical industry is the only industry I am aware of where you make more money by not doing your job properly. By not making proper antibiotics, new antivirals, disease has an easier time propogating and becoming more dangerous. And the result - more people get sick! More people buy your drugs because they have to and you make more money! What a wonderful example of the free market as it's supposed to work.

As I said, I am a free-marketeer at heart, and there a lot of industries which could have a look at how they are regulated.

This is not one of them.

It is the complete opposite if you believe a far more knowledgable (with all due respect) free-marketer by the name of Friedman who - if you saw the video I posted re his position on the FDA - you would know that the supply is slower because of the FDA.

The FDA does not force drug companies to invent new medicines, which is what you seem to be incorrectly implying here. They approve drugs. And that is why Friedman's argument is right: they hold the key to who comes out with new drugs. Government policies - I just posted his view on patents - shows why it is so difficult for new companies to come out with new drugs in order to compete with the established pharma companies which have no incentive to improve because they are protected by the kinds of bodies you deem necessary.

[Spark]

Originally Posted by Ikki

Medical certifications of doctor's? I fear you've misunderstood me.

They would be funded by providing a service to the drug companies re their Testing services. They gain a reputation amongst people and the drug companies will want these recommendations. That's a proposition I've thought of. Someone like Friedman states that the free market itself is enough.

Ever heard of marketing?

Unfortunately, the government is the number one perpetrator against change. It gets lobbied by such interests against those that could have more benefits for consumers for the cost of profits.

Do you have any evidence for this at all beyond ideology as it applies to the pharmaceutical industry?

Moreover, can you explain how this wouldn't happen in even greater degree when the pharmaceuticals self-regulate and hence can apply not only financial lobbying pressure but "market share pressure" by simply choosing which "regulatory" (I use the term loosely) bodies they like and dislike, given the absence of a government edict to force them to abide by any specific body?

But, in the end, consumers have to be responsible. If they want a safer drug or one that costs less, then they have to actively vote that way out of their pockets - but they can only do so if the drug gets to market. The great irony is that the FDA is the known gatekeeper for new drugs coming to the market and have been politically influenced into doing so. Look into Stanislaw Burzynski.

And this is so much worse than pharmaceuticals rubber-stamping their own products. Right. And having no impetus whatsoever to develop new drugs. Awesome.

Let's be clear; you cannot be for free-trade and then call for regulations like these. That is an oxymoron.

I can and I will because I am not an ideologue, I think about what will actually work best in specific situations. If that means being ideologically inconsistent with libertarianism from time to time, so be it.

The reason I make an exception for the pharmaceutical industry is because I said it works in a way which is fundementally anti-free market. Profit does not come from a steady improving of a product in the same way it does in every single other industry. There is no incentive to do so when they all buy your stuff anyway.

[Spark]

Originally Posted by Ikki

Unfortunately, you appear to have a misunderstanding of the free markets. How could the pharma companies lobby the government when there is a free market? There is nothing to lobby for, in order to abuse that power.

Err. Lobby other companies by choosing to directly advertise the recommendations from the companies they like.

They are therefore responsible for only producing a competitive product.

And marketing it.

No, it wouldn't. At least no more than when the FDA exists. If the drug companies pump out harmful medicines they get sued and worse they lose revenue and go bankrupt.

Right, well, since I don't like some of the bad stuff GSK does, or Pfizer, or Merck - and they've all done some horrible **** in their time - I'm going to refuse tamiflu if I get a severe viral infection, as is my fundamental right and my most effective way of engaging in the free market.

Oh, wait.

That is the nature of the market. You incorrectly extrapolate the situation to where the companies can continuously make bad choices for the welfare of their consumers. They can't after they've lost all confidence.

It is the complete opposite if you believe a far more knowledgable (with all due respect) free-marketer by the name of Friedman who - if you saw the video I posted re his position on the FDA - you would know that the supply is slower because of the FDA.

The FDA does not force drug companies to invent new medicines, which is what you seem to be incorrectly implying here. They approve drugs. And that is why Friedman's argument is right: they hold the key to who comes out with new drugs. Government policies - I just posted his view on patents - shows why it is so difficult for new companies to come out with new drugs in order to compete with the established pharma companies which have no incentive to improve because they are protected by the kinds of bodies you deem necessary.

Indeed it does not. The FDA is a regulatory body. Not a perfect regulatory body, and many of Friedman's criticisms are indeed valid. But what he does not do is explain how to get around the problems I have listed.

But if you honestly think that if we remove the FDA, we will be in this magic world where we'll have a new broad-spectrum antibiotic in ten years, you are sorely, sorely mistaken.

On the new companies thing - do you know why we haven't gotten new anti-biotics. Because it is absurdly expensive to develop new drugs. Especially when you have no a-priori evidence that your investment will be repaid. This isn't a university. This isn't DARPA. There actually needs to be a return on this. It took us decades for universities to work out the mechanism of chloroquine-resistant bacteria. Pharmas could probably have done it in a few years, and based on that started working on a new compound that could get around the resistance mechanism. But it would be incredibly difficult, incredibly expensive and with no guarantee of a return. So they don't put anything like the effort that the problem deserves into doing it because it is economically not viable to develop the drug that will save the lives of hundred of millions of people.

And that ****ing sucks.

Now, you will notice that nowhere here do I sing the praises of the FDA and how it operates. I'm just saying that the alternative you proposition - entirely deregulating the industry - is a bad bad bad idea.

[Ikki]

Originally Posted by Spark

Ever heard of marketing?

That's fine; let them market till their heart's content. Whatever they market, they cannot market false claims.

The bottom line is their drug has to work and work the best. Do you or I care how nicely marketed a chemo drug is if another one which doesn't advertise at all works?

Do you have any evidence for this at all beyond ideology as it applies to the pharmaceutical industry?

Moreover, can you explain how this wouldn't happen in even greater degree when the pharmaceuticals self-regulate and hence can apply not only financial lobbying pressure but "market share pressure" by simply choosing which "regulatory" (I use the term loosely) bodies they like and dislike, given the absence of a government edict to force them to abide by any specific body?

I mentioned one within the post you just quoted. The safe-point needle is another example where drug companies used bureaucracies, regulations and lobbying to keep plastic syringes in, instead of letting the safe-point needle come to market. The plastic syringes were cheaper, but far more dangerous as they could break or be reused causing a spread of disease

You again mention lobbying pressure. WHO are they lobbying? The point of the free market it is that the consumer is now free to make the choice. The only way to lobby the consumer is to provide a good product.

I can and I will because I am not an ideologue, I think about what will actually work best in specific situations. If that means being ideologically inconsistent with libertarianism from time to time, so be it.

The reason I make an exception for the pharmaceutical industry is because I said it works in a way which is fundementally anti-free market. Profit does not come from a steady improving of a product in the same way it does in every single other industry. There is no incentive to do so when they all buy your stuff anyway.

No, you can't. It's like saying: I'm a communist, but I think we should share all our resources.

I don't think you have thought about it as clearly as you think you have. I think in my own transition into becoming a fan of the free-market ideology I had my own reservations in other sectors where I thought it was necessary to safeguard against problems. I then found out that there were regulations, price controls, and plain bias, I didn't know about aiding the harmful effects that I was worried about in the first place. I'll admit, I am not extremely intimate with the medicine debate - although I've read enough that I can argue your points - but I am sure there are answers to your questions from free-market proponents.

[Uppercut]

Originally Posted by Ikki

The markets regulate the imperfections by making losers those that create bad products/services. It is the government which interferes to actually aid these imperfections in becoming full blown bubbles.

wtf, that's not what a market imperfection is. If market imperfections could be solved by the markets then they wouldn't be market imperfections. A market imperfection would be a mutually beneficial trade between two parties causing severe negative consequences for a third party, or imperfect information rendering a crucial market non-existent. I don't know how to respond without feeling like I'm giving a lesson in economics for dummies.

Originally Posted by Ikki

Also, as Friedman argues; the best solution to monopolies are the free markets.

That Friedman piece on monopolies is both fascinating and completely unrelated to the point you're trying to make.

[Spark]

Originally Posted by Ikki

That's fine; let them market till their heart's content. Whatever they market, they cannot market false claims.

They market other people's recommendations from these bodies you sing the praises of. That's the point.

The bottom line is their drug has to work and work the best. Do you or I care how nicely marketed a chemo drug is if another one which doesn't advertise at all works?

It will influence which one I buy, will it not?

I mentioned one within the post you just quoted. The safe-point needle is another example where drug companies used bureaucracies, regulations and lobbying to keep plastic syringes in, instead of letting the safe-point needle come to market. The plastic syringes were cheaper, but far more dangerous as they could break or be reused causing a spread of disease

And therein lies the issue. You want to give these people more power? The reason they have to lobby etc. is because they don't get their own way automatically.

You again mention lobbying pressure. WHO are they lobbying?

These "recommandation" bodies you speak so highly of. They don't directly lobby, they use a much more subtle way - pick and choose.

The point of the free market it is that the consumer is now free to make the choice. The only way to lobby the consumer is to provide a good product.

And when it comes to fine distinctions that can only be tested by an extensive scientific analysis? This is not a black-and-white game. It is extremely difficult to differentiate between products when they're all more or less the same. It then comes down to a case of who has more exposure and hence more brand name recognition. There is no difference, essentially, between the various versions of Panadol and its competitors. All contain 500g of paracetomol. They are the same. Why does Panadol get market dominance? Brand name recognition. Not because GSK are making an inherently superior product.

It gets even more dodgy with Herron, who were trying to differentiate themselves by saying "oh, we're Australian!" - what the **** do I care? I'm looking for something that will get rid of my headache, not nationalistic pride. Why is that relevant? But it's just another example of phama-companies using things which are not product quality to gain market share.

Hell, their ads IIRC actually boasted of making the exact same product as Panadol.

No, you can't. It's like saying: I'm a communist, but I think we should share all our resources.

Tell me, what is the world like when there are only two colours, black and white? I'd love to know.

I don't think you have thought about it as clearly as you think you have. I think in my own transition into becoming a fan of the free-market ideology I had my own reservations in other sectors where I thought it was necessary to safeguard against problems. I then found out that there were regulations, price controls, and plain bias, I didn't know about aiding the harmful effects that I was worried about in the first place. I'll admit, I am not extremely intimate with the medicine debate - although I've read enough that I can argue your points - but I am sure there are answers to your questions from free-market proponents.

Then find them.

---

As I said, the current regulatory framework is clearly not working. No body that oversees such a ****ed up industry could be working properly. But that doesn't make your alternative automatically superior.

[Quaggas]

Originally Posted by Flem274*

Pharma companies are indeed massive ****s.

Haha, yes. I recall an EMBA candidate from a major US pharma firm declaring in class that research was a waste of time ("shareholder value").

[Ikki]

Originally Posted by Spark

Err. Lobby other companies by choosing to directly advertise the recommendations from the companies they like.

What are they lobbying other companies for? You mean the independent boards I proposed? That is the point re competition. Who said there'd be one? A board being caught out for favouring drugs because of lobbying will lose their consumer confidence.

The is the problem with those who tend to argue against free market alternatives. They can see the first instance where a problem may arise but forgo thinking about the longrun where the free market is itself the regulator.

Unlike the FDA which is a federal bureaucracy which sits alone, these bodies will have to compete because unless they do a good job they go under. The FDA stays regardless. For even when it doesn't work and is a disaster, you have the old "the wrong person was running it" retort.

And marketing it.

As I replied in your other post, and for those reasons: let them.

What, are we to ban marketing now? If the drug is a cure for cancer, how would that work?

They can't claim something which it doesn't do. Good medicine will win out. It will spread because it works. They can market and saturate your TV or the internet as much as they want with their inferior drugs, but it won't last. People will eventually turn to what works. And even if that is slow, it is a FAR better alternative to having a federal body ban it coming to market, ever.

Right, well, since I don't like some of the bad stuff GSK does, or Pfizer, or Merck - and they've all done some horrible **** in their time - I'm going to refuse tamiflu if I get a severe viral infection, as is my fundamental right and my most effective way of engaging in the free market.

Oh, wait.

That makes zero sense and is a poor argument. If Pfizer makes drugs which work, then good. Why would you want them to go under? But Pfizer getting sued and losing huge revenues on drugs that don't work is even better as they have to self-regulate in order to make profits. They have to make some of those good drugs.

They can no longer get away with creating shoddy products whilst lobbying for regulations which make it extremely difficult - estimated between 400m to 2b dollars - for rivals to even get a drug out.

Indeed it does not. The FDA is a regulatory body. Not a perfect regulatory body, and many of Friedman's criticisms are indeed valid. But what he does not do is explain how to get around the problems I have listed.

But if you honestly think that if we remove the FDA, we will be in this magic world where we'll have a new broad-spectrum antibiotic in ten years, you are sorely, sorely mistaken.

A body that regulates drugs, even a flawed one, is not the central problem. It is a flawed body with the necessary power to mandate against other drugs through force of law and which can regulate the interactions between individuals and pharma companies.

The idea of regulations is fine, and that is what the free market is in itself: a regulator. It is survival of the fittest and without government assistance only those that produce a proper product can thrive. You don't seem to be listening to Friedman clearly, because he has answered all your problems. It is an ideological lever I feel you haven't completely understood, as that seems to compel you to ask questions which are already answered.

And again: the FDA is not in charge of creating new drugs. It is a regulatory body. Only human ingenuity can create new drugs. The FDA does not spur the creation of drugs, it inhibits them - it is definitively a control.

What does then create new drugs? A climate where entrepreneurs can readily get in the market with very little barriers where the competition is surrounded around who can produce the best drug to create the most profit and not who can lobby and influence government the best.

On the new companies thing - do you know why we haven't gotten new anti-biotics. Because it is absurdly expensive to develop new drugs. Especially when you have no a-priori evidence that your investment will be repaid. This isn't a university. This isn't DARPA. There actually needs to be a return on this. It took us decades for universities to work out the mechanism of chloroquine-resistant bacteria. Pharmas could probably have done it in a few years, and based on that started working on a new compound that could get around the resistance mechanism. But it would be incredibly difficult, incredibly expensive and with no guarantee of a return. So they don't put anything like the effort that the problem deserves into doing it because it is economically not viable to develop the drug that will save the lives of hundred of millions of people.

And that ****ing sucks.

Now, you will notice that nowhere here do I sing the praises of the FDA and how it operates. I'm just saying that the alternative you proposition - entirely deregulating the industry - is a bad bad bad idea.

I mentioned the patent controls and the FDA regulations inhibiting low price and entry into the market. If a drug is expensive to produce or to even develop for then one must ask why? Is it because the drug itself is inherently risky, needs resources which cost a lot - not related to the bloated costs associated with regulations - or is it because of the things we have been talking about re the FDA. You can do something about one, but not the other. If it is the former, then regardless of their being an FDA or a free market that drug is going to be expensive regardless - though undoubtedly those other things would probably be cheaper in a free market anyway. That discussion, however, is more aimed towards whether we should be a resourced based economy.

Anyway, with regards to Paul: he is against the FDA. So if it is so bad, and it is so beneficial to big pharma to get rid of these necessary regulations, how come they don't fund him? They seem to back everybody else.

[keeper]

Originally Posted by Spark

Profit does not come from a steady improving of a product in the same way it does in every single other industry. There is no incentive to do so when they all buy your stuff anyway.

You're spot on when you state the case for regulation of the Pharma Industry. On this part you are wrong, however. Pharma spends a huge amount of its turnover on developing new drugs. The reason? If companies relied purely on 'old drugs' their turnover would be massively slashed as patents end and generics become available. Similarly, they cannot rely on OTC medicines to replace branded prescribed medicines - especially those companies that don't have an OTC arm.

Given 10-15 years on the market for any one medicine Pharma companies have to introduce new drugs or accept a massive decline in turnover and company size, with all the shareholder pressure etc. that this would entail. It's simply not true that companies aren't trying to develop new drugs. In fact, it's quite the opposite. With a lot of the 'low hanging fruit' research having been achieved, there is a massive and hugely expensive arms race to develop the next wave of new technologies.

[Spark]

Originally Posted by keeper

You're spot on when you state the case for regulation of the Pharma Industry. On this part you are wrong, however. Pharma spends a huge amount of its turnover on developing new drugs. The reason? If companies relied purely on 'old drugs' their turnover would be massively slashed as patents end and generics become available. Similarly, they cannot rely on OTC medicines to replace branded prescribed medicines - especially those companies that don't have an OTC arm.

Given 10-15 years on the market for any one medicine Pharma companies have to introduce new drugs or accept a massive decline in turnover and company size, with all the shareholder pressure etc. that this would entail. It's simply not true that companies aren't trying to develop new drugs. In fact, it's quite the opposite. With a lot of the 'low hanging fruit' research having been achieved, there is a massive and hugely expensive arms race to develop the next wave of new technologies.

I'm thinking bigger picture. Chloroquine replacement. New generation of antibiotics. Stuff that is so desperately needed but so unattractive on an economic basis.

Take your point, though.