Thursday, January 24, 2008

Fairness or Capitalism?

Check out this excellent Freakonomics piece about the pharamceutical industry.

Zola Horovitz makes an excellent and illuminating point about the rising costs of healthcare in the U.S, and the prescription drug costs underlying much of it. "The U.S.," he states, " is subsidizing prescription drug prices for the rest of the world." How so?

Because we pay "free market" prices that subsidize the R&D of new drugs which are globally consumed, while people in other countries get the benefit of these drugs at a fraction of the true cost - because their governments set price controls.

Well, of course.

Where I differ is in the issue of what to do about it.

Horovitz argues that we should force other countries to pony-up for their share of development costs, if they want to enjoy the benefits of new drug development.

This sounds a bit like the rich kid in class complaining about the kids at the next table getting a reduced-price lunch.

Most of today's American citizens benefit from resources (natural and human) that were stolen or exploited by earlier Americans. Was it fair when we wiped out millions of native Americans with smallpox, thus entering a cultivated and well-tended land empty of most competitors? Was it fair when we denuded Africa of millions of its able-bodied inhabitants and used them as slaves to enrich our economy? Is it fair that we use up far more than our share of the world's natural resources per capita, and pollute more per capita than the rest of the world?

No. Fairness doesn't enter into colonialism, or the free market. And Americans have come to equate democracy with "free market" capitalism. We're not willing to use the kind of democratic socialist methods that have let other governments collectively bargain about prices, or collectively acknowledge that
we as a society are supporting development of new drugs, and so we are, individually, left to fend for ourselves in the market.

Which really sucks if you're a poor, uninsured or underinsured American.

But not as much as it sucks to live in many Third World countries.


Blogger -suitepotato- said...

First, the land was NOT well tended and taken care of. Modern farming and forestry methods are ultra-superior to anything the Indians practiced. They slashed and burned from time immemorial as they had no metal working capabilities to make the tools that allow efficient and accurate lumbering and land clearing possible.

Second, we did not denude Africa through slavery and various African tribes were heavily involved first in the selling of slaves, then the enabling of slaving raids alongside their troops. Had Africa resisted in any uniform way slavery would NEVER have grown to the level that it did from a sheer cost-benefit viewpoint.

Third, that other nations use anti-competitive anti-market laws to force price limits on vendors is not the fault of the American public nor should they foot the bill. Instead those other nations should simply not be sold to if they insist on maintaining the price controls. They should share the cost and fairly so without their governments using their police powers of state to prevent access to that market for no reason other than they want to have their way and the people's needs including ethical be darned.

I have to agree with Horovitz.

Finally as to reduced-price lunches, those reduced prices are subsidized via taxation of a populace that arguably gets less each year in benefit from a demonstrably failing educational system, which they have an even less and growing less say in the administration thereof.

I grew up poor in a housing project on welfare for part of my youth and know first hand how the system really works from the inside. Like sausage making you don't want to see it up close. MacBeth and Oedipus together aren't as perverted and corrupted.

The issue with development costs is many-fold but primarily comes down to a few things being legal costs both for tort defense and ongoing legalese generation and exposure checking, political lobbying costs to be paid out to politicians who will obstruct their offerings and work simply to extort said lobbying efforts for their own need for attention and power, and long-term development and testing costs in the labs being not insubstantial as highly educated and test scoring college grads don't work for free.

On top of this, many of the drugs that are being argued over tend to cause side-effects in large segments of the population which in the view of many patients are worse than the primary malady being treated, precisely because we don't have the best computational model of the overall human structure to forsee how a simple compound will result in major damage to an otherwise obscure protein for instance AND because "good enough as long as there's somewhat fair disclosure" is the rule of the day.

Bring on nanotechnology.

1/25/2008 8:21 PM  
Blogger Tzipporah said...

Suitepotato - the methods the Native Americans used to farm were perfectly suited to their needs, the times, and the local flora/fauna. What you call "slash and burn" - as was often used here in the Willamette Valley - was an excellent way to get rid of old husks, grasses, etc., and add nurtients back to the soil. Since they weren't living in an indistrialized era, pollution was not an issue, as it would be today.

I don't have the patience to argue this whole point with you, so if you care to actually learn more, you can find an awful lot of information by googling "Native American farming methods."

Your other factual points are similarly specious, although I can't speak to your personal experience in a housing development.

1/28/2008 1:42 PM  

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