[dv_dt]

This is what the breakdown of working competitive markets look like, and in this case it takes both government monopolies, as well as well as overwhelming short-term greed on the part of the private companies.

Long term don't these companies think that charging outrageous prices for drugs will cause a future voter/government backlash of some sort... or maybe they think they should extract profits now because of a chance of drug price regulation coming to the US in the future?

[Sangermaine]

>Long term don't these companies think that charging outrageous prices for drugs will cause a future voter/government backlash of some sort

No, because it demonstrably won't. People say they're angry and then do nothing about it. The US has an entire political party angrily decrying any effort to regulate healthcare as socialist slavery.

The drug companies know they'll be just fine. Maybe some token slaps on the wrist and public performance of cosmetic changes to appease people now and then, but nothing will happen to them.

[alexanderstears]

the US has an entire political party angrily decrying any effort to regulate healthcare as socialist slavery.

Argubly regulation is the problem we're in this mess. Do you think an epipen would cost $600 if there weren't a Government granted monopoly?

We have two parties who love the current amount of regulations on competition - you need to go to an AMA approved medical school to become a doctor, there aren't H1Bs for health care workers, and the government gets to pick and chose who's allowed to sell medication.

They just disagree on the amount of subsidies for poor people. One party thinks prepaid consumption with cross subsidies is insurance and the other party thinks that insurance shouldn't be so binding if you get sick.

[dv_dt]

Regulations can put pressure on prices (and if you look at epipens in particular, part of the regulations allowing the increase of their price have nothing to do with monopoly and a lot to do with getting policy placed into areas where organizations are required to keep an epipen on hand by regulation...).

But in terms of overall effect, one can't ignore other nations which pay much lower prices for healthcare with both regulation for drug patents, as well as regulation on drug prices. That combination manages to deliver better care at lower costs than the US (we pay on average double per capita). So I don't think one can generically fault "regulation" for a poorly performing health market in the US.

[alexanderstears]

So I don't think one can generically fault "regulation" for a poorly performing health market in the US.

You're absolutely right, however, I do think the worst parts of our medical system exist as consequences of regulation.

The mandate that emergency rooms treat anyone who enters is onerous and there's no free lunch, paying customers are stuck with the bill.

The licencing system isn't optimal for cost effective care.

There's a lot to be desired for people who favor supply side solutions to expensive problems.

[dv_dt]

> The mandate that emergency rooms treat anyone who enters is onerous and there's no free lunch, paying customers are stuck with the bill.

I don't think that's onerous, I think that is a minimal, and admittedly imperfect, expression of our societal intent that people shouldn't die unnecessarily in emergency rooms - either from lack of being able to pay; nor from a practical standpoint, lack or delay of on-hand proof of ability to pay.

Removing those regulations would cause all sorts of other problems. Someone arrives in an ambulance near-death, if I lack morals then one level of maximized extraction price is to have those patients commit to pay a value that represents the earning potential for that person for the rest of their life. They have to agree before getting admitted. Even more profitable, if I judge that person as having a well connected social network, I can charge even more because I know their friends and colleagues would chip in to save them... I'm not sure how a competitive market with no regulation changes the worst case for this transaction - if someone is near death then moving on to another emergency room is out of the question.

I see universal healthcare with a shared cost-pool as the lowest overhead way to provide for our social moral desires (but then I'm not in fear of the regulation with may be needed to implement that policy).

Insurace with a shared risk pool is a technically workable, but adds even more overhead, and ends up a more expensive way to do the same thing... but again regulations are involved (and fixing very flawed ones at that).

[AnthonyMouse]

> Someone arrives in an ambulance near-death, if I lack morals then one level of maximized extraction price is to have those patients commit to pay a value that represents the earning potential for that person for the rest of their life. They have to agree before getting admitted.

Actual markets don't work that way. If you could actually make that much money then someone would open a competing emergency room right across the street, let everyone know that they charge $1 less and take all the business. Then the first emergency room would charge $2 less to take it back, until they're both charging reasonable prices.

It's the same reason you don't have to sign your life away to buy food even though you would die without it.

The problem in the US is that the regulations on the market for medical services work almost the exact opposite of that. There is no price transparency at all so you have no idea which facilities are more expensive. And if someone wants to open a competing facility, they have to get a Certificate of Need proving that the existing facilities don't have enough capacity. Even though having enough capacity doesn't preclude charging outrageous prices in the absence of competition.

> I see universal healthcare with a shared cost-pool as the lowest overhead way to provide for our social moral desires (but then I'm not in fear of the regulation with may be needed to implement that policy).

The existing US system is pure corruption. It's heavily regulated but the regulations are a result of regulatory capture by insurance companies (who want higher costs because higher costs means more vig), and all the industries the insurance money pays for like pharma.

The result is that medicine in the US is outrageously expensive. But the expense doesn't go away even with universal coverage unless you fix the regulations, and if you did that then people would be able to afford medicine out of pocket without insurance.

[alexanderstears]

I don't defend the status quo. I think this is the right way to resolve healthcare.

I agree with about 95% of this: https://market-ticker.org/akcs-www?post=231949

We just need smarter regulations:

> every medical facility needs to have a price for each billing code

> every healthcare facility has to publish their prices

> heatlh care facilities must honor their published prices for everyone

> if someone needs car and they can't pay, the government will pay for the care but the government holds a debt and can garnish wages / use tax refunds / credit welfare to cover the debt

If people could shop on price for routine care, medical companies would become more efficient and extend those prices to people in an emergency

[conanbatt]

I concur. The argument that healthcare in the US is broken because its a market almost triggers me. It has profound regulations that affect its market behavior.

[jeffbax]

"So I don't think one can generically fault 'regulation' for a poorly performing health market in the US."

Well articulated counterpoint: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...

Also, we live in a country where most places they don't even allow opening a new hospital without the permission of surrounding hospitals, and all of the recent healthcare regulations have encouraged a seriously problematic consolidation just like the big banks.

As an industry, healthcare is so over-regulated it isn't even funny. The good news is that drug prices are still generally falling outside of big examples like Daraprim and Epipens and there are fairly effective solutions to the spikes we could have if the FDA would get onto more reciprocity with other nations: http://marginalrevolution.com/marginalrevolution/2016/02/the...

Also relevant, the US Cost disease: http://slatestarcodex.com/2017/02/09/considerations-on-cost-...

[dv_dt]

I don't find that first link well argued at all: because corporations have achieved some degree of regulatory capture from the FDA, we need to eliminate regulations and let those same corporations run completely rampant and somehow that will result in better performance? That makes no sense to me.

Also, the comparison there in the drug vs the chair market there is poor too. The key difference between manufacturing drugs and chairs (as in the example), is that anyone could enter the chair making with one guys who has had high school woodshop. Manufacturing a drug has a much much higher bar...

[alexanderstears]

I don't find that first link well argued at all: because corporations have achieved some degree of regulatory capture from the FDA, we need to eliminate regulations and let those same corporations run completely rampant and somehow that will result in better performance? That makes no sense to me.

If that's what you got from SSC's cost disease article, you might have some bias in your framework.

[Sangermaine]

>Argubly regulation is the problem we're in this mess.

No, that's not even arguable. Other countries with even more highly regulated healthcare manage to provide it for much, much less. You're just regurgitating mindless libertarian talking points that have no relation to the real world.

The particular form of regulation in the US may be a problem, but regulation in general is demonstrably not.

[alexanderstears]

Let me clarify - the US's regulations are the reason the US has expensive healthcare.

IF we regulated single payer health care into existence, we'd have cheaper care. The problem isn't regulation per se, it's our current regulations.

[milcron]

Party A: Create new regulations which benefit pharma

Party B: Remove old regulations which disadvantage pharma

[alexanderstears]

I love the reductionism.

[hansthehorse]

The epipen delivery system and the Epinephrine inside of it should be sold at cost. Both were developed by the US Military (taxpayers) and American taxpayers should own it.

[alexanderstears]

At-cost? Enough to cover the executive compensation, right?

[tormeh]

>Argubly regulation is the problem we're in this mess. Do you think an epipen would cost $600 if there weren't a Government granted monopoly?

All property is government intervention. And property is good. Because property is capitalism, and capitalism is God's will.

/s

[evanwise]

I sometimes feel like "free-market" types are actually incapable of understanding this point. The idea that markets and property exist as some sort of independent, empirical objects is baked so deeply into their ideology that it's almost as if they lack the symbolic vocabulary to even conceptualize the idea that property itself is created by regulations.

[Banthum]

You seem very strongly invested in this point, which is strange considering how easily refuted it is:

Property existed long before third-party regulation.

Rather than ownership being enforced by a third party with monopoly on violence, it was enforced by the threat of escalating violence from the property owners themselves.

Eg. You take one goat from my herd and refuse to give it back, and we are now at war. Result: Nobody takes any goats.

So the property was defined by mutual understanding and mutual enforcement, not regulation.

This is still done in some societies and sub cultures (Eg. Criminals). Even animals do it, with things like territory or sharing food from a kill.

A mutual cultural belief in property strengthens this mechanism and makes it work more smoothly. This cultural belief is part of what ""free-market" types" (sic) would like to spread.

[evanwise]

It's interesting that you start off attempting to refute me but end up demonstrating my point. The cultural conditions in early agricultural societies, before the development of the city-state, were insufficient to support a strong rule of law, and hence, property as we now know it. Property and personal possession are not the same thing. Certainly, individuals claimed ownership of goods, and barter occurred, but these were far from the only or even the dominant modes of economic activity in early agricultural societies, which also incorporated gift economies and cooperative sharing of labor and goods. By interpreting past economic systems through the lens of capitalism, you are proving my point: that the defenders of the free market commit the fallacy of reifying markets and property, as we now define them, as some sort of inevitable emergent attribute of human society, when there have been many different economic systems throughout the history of human civilization, none of which fully correspond to the abstract conception of the free market as discussed by economists.

[dv_dt]

And with those conditions economic growth and stability of society seems much lower than the more civilized alternatives...

[hacking_again]

This doesn't mean property exists in the same way that objects exist. A piece of property is just a protected object.

[philwelch]

Property is created by government, but markets are more like evolution or society; a system that emerges naturally out of multiple separate but interacting agents given the right set of conditions (namely, scarcity and the ability to exchange goods and services).

Even in places like East Germany or prison where overt markets are suppressed, people still exchange things with each other, even developing bootleg currencies such as loose cigarettes. And if there’s a sudden shortage of a specific good inside these black markets, the price will go up; likewise if there’s a sudden surplus, the price will go down; likewise; if there’s a sudden surplus in whatever good is used as a currency (e.g. cigarettes) then there will be inflation, at least until its cost-effective to switch currencies.

[131012]

Or swords and chainmails if we go back to the birth of common law and guns and bacterial warfare in the case of Turtle Island aka Americas.

[dv_dt]

Perhaps, though I think I'm more energized personally voting & with campaign involvement in the upcoming elections this year than ever before. And part of that is knowing that it might help Medicare for all or other universal healthcare options - maybe not this election or the even the next - but personally I feel it has to happen and is worth working towards.

[jaggederest]

I suspect that at some point there will be a backlash in the form of someone or some people with nothing to lose becoming violent in the face of an effective death sentence in the form of unaffordable healthcare.

"Ultima ratio regum" is an appalling way to enforce fairness, but it doesn't seem to me that greed in general will stop short of a true class war or an external threat ala a World War.

Also to be clear I am definitely not advocating this route, I'm trying to figure out what anyone can do to prevent it and thus far I am at a loss.

[Mz]

I'm trying to figure out what anyone can do to prevent it and thus far I am at a loss.

You quietly find another path and make these insanely expensive drugs vastly less relevant. The real challenge is effectively spreading the word. Something truly disruptive in this area seems to be about the most offensive thing a human being can do.

[jaggederest]

The funny thing is that pharmaceuticals are simply one of a number of unconscionable negative-sum-games that are being played these days.

I just don't understand how people can make such a blatantly destructive set of choices when it's really clear that it will come back and bite them in a way even the most psychopathically mercenary people should understand, let alone anyone with a more advanced morality than "I got mine".

[Mz]

Currently, the world actively makes it hard to make any other choice. I have made other choices. Part of the result:

I spent ~5.7 years homeless while classist assholes (online and off) shit all over me.

I believe part of this is happenstance. Humans are little monkeys with brains designed to parse a social order for a tribe of 150 members. With 7 billion people on the planet and a global economy by necessity, the paradigms developed to parse our tribe break in the face of a sudden new world order.

It is actively dangerous to give a damn about the welfare of other people. Some of that is also happenstance. Strangers from extremely different backgrounds face substantial obstacles to good communication.

But, we really need to solve this, even if we are all cold hearted sociopaths who don't give a damn about anyone but ourselves. Like you said: If we don't, this will eventually go very bad places.

Given the recent mass shooting in Las Vegas, the record destruction of hurricanes in Texas and Florida, and the ongoing fires in California, I think it is reasonable to assert that our choices are already coming back to bite us. We can do something more sensible or continue to suffer the consequences.

[trapperkeeper74]

Don’t get lost barking up the partisan tree, most Americans aren’t the enemy. Both parties are different flavors of corrupt (Gore Vidal’s Property party): one ignores their base while taking corporate money and the other panders to extremists and also takes the same blood money.

[leggomylibro]

It's a sliding scale, but it's not close to balanced right now. Saying things along the line of 'different sides of the same coin' does not make sense.

[rubyn00bie]

No. :(

Businesses have no concern over their long term viability. Executives are not incentivized in anyway to care about long term interests. In fact all their bonuses and compensation explicitly reward the short term. Compounding the problem is a simple cost benefit analysis means they've already costed out the future "backlash," and still find themselves to be more profitable.

The "long term" is nothing but a mental exercise with no real world manifestation for businesses. The closest you can probably get to it having meaning is for business school grad students doing case studies.

[PeterStuer]

No, this is exactly what a 'working competitive market' looks like. If you somehow still believe the simplistic fantasies of economics 101 with a clean partition between 'the market' and the meta-market game, then you urgently need to wake-up.