[eloff]

On one hand yes, on the other the company wouldn't exist. Regulators are important, but they also serve incumbent interests as they raise the barrier to entry for newcomers. It's a way to pull the ladder up behind you once you've achieved success. I don't know how we can better balance those seemingly conflicting aspects.

[slg]

> Regulators are important, but they also serve incumbent interests as they raise the barrier to entry for newcomers.

Call me crazy, but when it comes to products that could so easily cause death, a barrier to entry is a good thing.

[missosoup]

Aaaaand that's why Americans need to pay 500 bucks for an insulin injector pen while Indians pay 10 bucks for the same device.

The problem with regulatory capture and arguing it's a good thing, is that there's a downside/cost to the barrier it creates. And often that downside outweighs the upside.

To be clear, no one is arguing regulation shouldn't exist. Just that the nature of regulation is to be captured by incumbents and serve a purpose orthogonal to protecting the people.

[slg]

I didn't say regulatory capture is a good thing. I said that barriers to entry can be good in certain instances. In the instance of medical devices, the problem in the US has nothing to do with barriers to entry. If you can drive across the border to Canada and buy an identical product for a fraction of the price it would cost in the US, that isn't because the barrier to entry is too high in the US. The product already exists and is being produced, it just costs more due to a broken healthcare industry.

[missosoup]

No, Americans are paying 500 bucks for a pen precisely because of regulatory capture. None of the manufacturers of the cheaper version have been successful in jumping the regulatory barrier to entry which the incumbents lobbied for, and tens of thousands of Americans suffer for it each year.

[bildung]

I have a hard time believing e.g. most european countries have less regulation in the medical sector than the US. Probably less corruption/"lobbying" (because corporate campaign distribitions are more strictly regulated in most other countries), but corruption quite different from regulation, even if both affect how law gets written.

[throwaway100773]

Many times it’s hard to distinguish the difference between regulation and corruption. Sometimes they’re one disguised as the other. Not sure what method you have for distinguishing between the two, so please share!

[sokoloff]

In what way is that scenario not suggestive of a barrier to entry to the US market for the maker of the product already being sold in Canada?

[hiram112]

> Aaaaand that's why Americans need to pay 500 bucks for an insulin injector pen while Indians pay 10 bucks for the same device.

I can't speak for insulin injectors, but I know for a fact that the reason Indian pharmaceuticals are often times massively cheaper is because they ignore patents by which the majority of the world abides.

Now in many cases, the patent system is set up for incumbents who have enough legal muscle to develop and patent isomers, metabolites, or "extended release" versions of successful drugs which are losing their patent privileges. But that's not the whole story. We know that some patents and copyrights are needed to encourage investment in R&D.

India (used to?) just blindly copy drugs, ignore paying royalties, and take the profits. I haven't ever been on any blockbuster meds developed natively in India. Have you?

[sokoloff]

Taking another angle, when it comes to a product that could so easily save a net of 10s of thousands of Americans every year once fully developed, barriers to entry might be counter-productive.

(I’m actually fairly bearish on level 5 self-driving being “close”, but if it was, speeding that up would almost surely be worth throwing the switch on the trolley tracks for both the lives saved and the reduction in wasted attention of those who would have otherwise used a lot of their lifetime driving.)

[Benjammer]

I can never really understand this argument. Why can't we carefully craft regulations to scale in their burden with the company's ability to bear said burden in some way? Scale with revenue or head count numbers? Similar to how income at the lowest bracket isn't taxed, to lessen the burden on people much less able to pay.

[taneq]

Because (a) then you'd end up with things like pacemakers designed by sole operators because their regulatory burden would be that much lower than what a biomedical engineering firm would face, and (b) any such system would be trivial to game anyway.

[jdbernard]

We can, but usually it's the established encumbents who are helping draft the language of the legislation (which is better than politicians with no expertise working alone) and they are not incentived to encourage the kind of regulation you propose.

[eloff]

I like this idea a lot. We don't currently do this, but it would get most of the benefits without most of the downside. Seems like a win.