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A life or death lesson on the free market

G

Gonad the Barbarian

Lifer
Caught this last night. It's on companies hoarding pharmaceuticals in short supply for huge markups.
www.youtube.com/watch?v=Ma7tSK7qA0k
Text here:
www.cbsnews.com/8301-31727_162-20120140-10391695.html
MIAMI - Sara Danielsen, 39, was diagnosed with a rare form of appendix cancer in March. "The tumors inside me are growing if I don't stop them," Danielsen said.

To shrink the tumors, Danielsen has endured 11 painful sessions of chemotherapy. For one of those treatments, she went without the crucial drug Flourouracil - her hospital had simply run out.

"I don't have time to take a break and let them keep growing and then try and fight them back later," she said. ""I've got to like get them now."

More than 200 drugs in critical short supply

CBS News investigative correspondent Armen Keteyian reports a record drug shortage has opened the door for so-called gray market companies that expoit the short supply. They buy up drugs for everything from cancer to infections, stockpile them, then sell them to hospitals at massive markups.
Click to expand...
 
So how did they hold product to raise prices? Are they colluding? Is there a corporate monopoly involved?

If I'm not mistaken, either is a crime and/or actionable by current laws.
 
This is a failure of government intervention and the pharmaceutical industry isn't pro-market. The pharmaceutical companies would rather have price fixing than to be stripped of their special legal priveleges. Pretty much every progressive would feel like an idiot if the free market ever got going here, since we've never even really had it. The two times we were even anywhere close to the free market was during the Articles of Confederation era and after Jackson got rid of SBUS and before Buchanan signed into law the Morrill Tariff. The common men who were Jeffersonians and Jacksonians loved those times. Unfortunately, it was replaced by mercantilists because they couldn't prosper without help from the federal government.
 
Jaskalas said:
So how did they hold product to raise prices? Are they colluding? Is there a corporate monopoly involved?

If I'm not mistaken, either is a crime and/or actionable by current laws.
Click to expand...
My understanding was that distributors bought the drugs and held them. Now that there's a shortage, raping begins. There are other factors in the shortages. New regulations, shortage of raw materials, low profitability of a drug means it gets the ax......
 
Jaskalas said:
So how did they hold product to raise prices? Are they colluding? Is there a corporate monopoly involved?

If I'm not mistaken, either is a crime and/or actionable by current laws.
Click to expand...

The point is, by either breaking the law (bypassing a trade barrier), or there being no law preventing it, when you consolidate control of S, those few control P.
 
So what caused the actual shortage to begin with? No one distributor can "corner the market" on something, so if there's a shortage it's because the producer isn't producing enough to meet demand. . That could be for a variety of reasons, one of which is government regulations and red tape. I guess it could also be a sudden unexpected surge in demand, but that's not likely with cancer drugs.

Edit: please explain how this is a lesson of the "free market", when it is in fact anything but free, it's massively entangled with regulation, red tape and meddling.
 
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I agree with PokerGuy where does "free market" fit into all this??? In fact countries with govt controlled market has wayyyyyy more black-marketing. Also, a lack of free market will not have these highly advanced life saving drugs. No high profit margin = no investment in research = no innovative new drugs. Epic fail OP.
 
Gonad the Barbarian said:
Post 5. But I didn't expect you free marketeers to accept anything that rubs the polish off your free market dogma.
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Yes, because the alternatives work so well.

Your post 5 is exactly a defense of free markets in general: they work better than any other mechanism to deconsolidate power.
 
What's the problem here? Companies should be allowed to set their own prices.... if the manufacturer has other distributors, then the hospital is free to purchase elsewhere
 
Atreus21 said:
Yes, because the alternatives work so well.
Click to expand...

I see a whole bunch of other countries' healthcare systems that clearly demonstrate yeah, they do. But like I said, I really don't expect any of you folks to leave your free market lala land.

Your post 5 is exactly a defense of free markets in general: they work better than any other mechanism to deconsolidate power.
Click to expand...

Except when there's a naturally concentrated control of production resources. Or lack of profit motive to produce adequate quantities. Or producer collusion. Or a myriad of other reasons that fall under a free market. Such as the very one happening here. But you guys stick to your fallacious ideology that the free market has no faults.
 
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Gonad the Barbarian said:
I see a whole bunch of other countries' healthcare systems that clearly demonstrate yeah, they do. But like I said, I really don't expect any of you folks to leave your free market lala land.
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These countries you talk about, do they have all these latest and greatest live saving drugs available to everybody? You are so sadly mistaken. They just get free treatment but the technology is like 10 years behind US. In fact if you want the same level of treatment, you can easily receive it in US with no problems. Do you think the drug mentioned in OP is available to everyone getting Kemo in France or England or Canada??? We expect more and then blame our system.
Give me a name of another country that has same number of pharmaceutical companies, with similar balance sheets, coming up with same number of new and advanced drugs... not even same lets say only 50%.

People like you who have been systematically fed with guilt of being America do not understand the fundamental principal the country is based on. People in academia are out of touch with reality, stop listening to them. This is one of the reasons why this country is going down. If you are not proud of yourself and proud of the environment and country, how the hell are you supposed to do great things??? This is the basic reason we have a whole generation of retards protesting at wall street. People from academia have produced a lost generation.
 
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Jaskalas said:
Do you have a suggestion on how to force production of something no one wants to produce?
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Of course. Do you suggest we just let people die because the drugs they need are being hoarded and not produced in adequate quantities because such a solution would fall outside of a profit-driven free market?
 
DesiPower said:
These countries you talk about, do they have all these latest and greatest live saving drugs available to everybody? You are so sadly mistaken. They just get free treatment but the technology is like 10 years behind US.
Click to expand...

I'm calling shens on that statement because I think you pulled it out of your ass. But I'm open to being proven wrong. Please attempt to do so.
 
Gonad the Barbarian said:
Of course. Do you suggest we just let people die because the drugs they need are being hoarded and not produced in adequate quantities because such a solution would fall outside of a profit-driven free market?
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What incentive do companies have to hoard resources that people will pay through the nose to get?

Your response: To drive up the price even further.

Yes, until a competitor comes along to put them out of business.
 
Gonad the Barbarian said:
Of course. Do you suggest we just let people die because the drugs they need are being hoarded and not produced in adequate quantities because such a solution would fall outside of a profit-driven free market?
Click to expand...

How about the people of 4th world nations starving? Do you suggest we just let them die becaause the food they need doesn't exist in their country and isn't being sent there in adequate quantities because such a solution would fall outside of a profit-driven free market?
 
woolfe9999 said:
I'm calling shens on that statement because I think you pulled it out of your ass. But I'm open to being proven wrong. Please attempt to do so.
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well.. I agree, its in part pulled out of my ass. But the fact is if you look at the drugs that are advertized in TV, these are not available to regular people through their hospitals to people I know living in France and Canada. Nor do the dentists or Ophthalmology have all these advanced chairs and equipments. I am speaking from personal experience, through people I know and I have talked to...
 
Atreus21 said:
What incentive do companies have to hoard resources that people will pay through the nose to get?

Your response: To drive up the price even further.

Yes, until a competitor comes along to put them out of business.
Click to expand...

And just why aren't competitors coming along now? Natural barriers to entry and trade barriers perhaps? Or is it all just burdensome government regulation keeping folks dying from a drug shortage as opposed to having folks dying from an abundant availability of unsafe drugs?

There's really no point in arguing this with folks like you. In case you have sigs turned off
If more money can be made by perpetuating a problem rather than solving it, don't expect the solution from a free market.
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And if you don't see that, and I mean just as plain as day, as it is happening all over around you, then there's just no hope for you.

I don't hate the free market. I actually like it quite a bit. I like my truck quite a bit too. But I don't expect it to transform and start battling evil robots. Everything has its limitations.
 
Gonad the Barbarian said:
And just why aren't competitors coming along now? Natural barriers to entry and trade barriers perhaps? Or is it all just burdensome government regulation keeping folks dying from a drug shortage as opposed to having folks dying from an abundant availability of unsafe drugs?

There's really no point in arguing this with folks like you. In case you have sigs turned off

And if you don't see that, and I mean just as plain as day, as it is happening all over around you, then there's just no hope for you.

I don't hate the free market. I actually like it quite a bit. I like my truck quite a bit too. But I don't expect it to transform and start battling evil robots. Everything has its limitations.
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Your sig makes no sense to me. In an environment where monetary exchange is voluntary, companies don't have an incentive to perpetuate a problem because no one would pay for it. If in your example a company was deliberately hiking up prices, I'd be chomping at the bit to find a competitor. If one didn't come along, I'd prefer to pay ridiculous fees to get what I need rather than not get it at all.

I don't know why competitors aren't coming along. All I know is that no other system promotes real competition more than free markets.

You mistake trust for zeal. The free market isn't a perfect system that I worship. I just say its the most efficient mechanism for giving people what they want. Government intervention has wrought more problems with a few exceptions.
 
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DesiPower said:
well.. I agree, its in part pulled out of my ass. But the fact is if you look at the drugs that are advertized in TV, these are not available to regular people through their hospitals to people I know living in France and Canada. Nor do the dentists or Ophthalmology have all these advanced chairs and equipments. I am speaking from personal experience, through people I know and I have talked to...
Click to expand...

I'm betting that for virtually every drug you'll see advertised on TV, you'll find in France or Canada, either a) the same drug under the same name, b) the same drug under a different name (this happens often), c) the same drug as a generic equivalient, or d) other drugs in the same family with the same therapeutic purpose and overall efficacy.

See, e.g.:

http://hc.wharton.upenn.edu/danzon/...romNineCountries_HA_WebExclusive29Oct2003.pdf

Exhibit 1 illustrates the diversity of pharmaceutical markets across countries.
Of our 249 molecules, at least 90 percent are available in all countries except Japan,
which has only 76 percent of the molecules, despite being second-highest in
total sales.
Click to expand...

When using the proper methodology of identifying molecules, i.e. the active drug itself rather than a brand name, 90% of a sampling of 249 drugs are available in 8 of the 9 studied countries. The studied countries include both Canada and France. Specifically, of the 249 molecules used as a sample by the study, all 249 are available in the US, Canada has 236, France 228. Note that the sample of 249 were chosen because they existed in the U.S. market to begin with, so the U.S. has 100% of them available by definition.

Disclaimer: the numbers are from 1999. I doubt that matters but you never know as trends like this could change.

This study is hardly coming from a left perspective. Look at the subtitle of the study, which reads: "The U.S. market structure, with its higher prices for on-patent products
and strong generic competition, appears more favorable to innovation than markets elsewhere."

I don't know about medical equipment and machinery. That would require other sourcing.

- wolf
 
Gonad the Barbarian said:
Post 5. But I didn't expect you free marketeers to accept anything that rubs the polish off your free market dogma.
Click to expand...

Instead of spouting bull, why don't you show us how that market rife with regulation and government oversight is a "free market"? Once you do that, feel free to rail against that free market, which simply doesn't exist.
 
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