A question on general economic theory and the role of government

Craig234

Lifer
May 1, 2006
38,548
350
126
To try to help bridge the views of many here on opposite sides:

Do you agree that the government, as the representative of the public interests, has an obligation to ensure that drugs needed for public health are affordably availble?

In particular, do agree that the government is right to use the following guideline:

1. If the 'free market' meets the need of affordable drugs, great.
2. If it falls short, the next step is for the government regulate and incent as needed.
3. If the government cannot get the need supplied with #2, then it can evaluate whether the need is best met through direct involvement - funding/producing the drugs.

For #1 above, perhaps and example is computer games. With the exception of America's Army propaganda for recruiting, this market pretty much takes care of itself.

For #2 above, perhaps energy is an example. While it's mostly met privately, it's highly regulated, with price controls and subsidies.

For #3 above, perhaps fire departments are an example. The natio used to have private companies for it, but it was found to not meet the need and work best this way.

I'm wondering if there's much common ground on the above, or if the ideology some have makes them disagree.

 

sandorski

No Lifer
Oct 10, 1999
70,699
6,257
126
Drug companies definitely need to recover the Costs involved in Developing a Drug. Affordability can't always be guaranteed because of that. Although your #2 and 3 could help in that regard. Could get expensive for the Government though as some Drugs have a very small Market/Need.
 

TruePaige

Diamond Member
Oct 22, 2006
9,874
2
0
If #1 exists, but with the help of #3 it could be lowered further, then in the cases where #1 is still not affordable for everyone that needs it #3 should ALWAYS be used.
 

CycloWizard

Lifer
Sep 10, 2001
12,348
1
81
This is yet another example of the inability of Americans to understand the difference between what is actually needed. While someone might need these drugs to maintain a certain quality of life, or even to remain alive, the company also needs to make money off of said drug. If the company can't make money off the drug, then the drug would never be developed in the first place and all of the "needs" of the people would go unanswered. Thus, it is important to understand that people *want* a certain quality of life, just like the drug companies want to make money off of their products. This gives both parties incentive to help each other: the drug company helps the public by producing the drug, while the public helps the drug company by buying it from them.

This is the foundation of a free market system. Removing or diminishing the incentive of either side will always result in diminished good for both sides in the long run. You might think that you can help people today by taking a patent away, having the government produce the drug du jour, and distributing it to the masses for peanuts, and you probably would be doing good for today. However, the next time around, that company isn't going to bother developing any more drugs because you removed their incentive for doing so by taking their profits away. I'm not a fan of intellectual property in general, but I recognize that it is necessary on some level for the development of novel products.
 

sandorski

No Lifer
Oct 10, 1999
70,699
6,257
126
Originally posted by: CycloWizard
This is yet another example of the inability of Americans to understand the difference between what is actually needed. While someone might need these drugs to maintain a certain quality of life, or even to remain alive, the company also needs to make money off of said drug. If the company can't make money off the drug, then the drug would never be developed in the first place and all of the "needs" of the people would go unanswered. Thus, it is important to understand that people *want* a certain quality of life, just like the drug companies want to make money off of their products. This gives both parties incentive to help each other: the drug company helps the public by producing the drug, while the public helps the drug company by buying it from them.

This is the foundation of a free market system. Removing or diminishing the incentive of either side will always result in diminished good for both sides in the long run. You might think that you can help people today by taking a patent away, having the government produce the drug du jour, and distributing it to the masses for peanuts, and you probably would be doing good for today. However, the next time around, that company isn't going to bother developing any more drugs because you removed their incentive for doing so by taking their profits away. I'm not a fan of intellectual property in general, but I recognize that it is necessary on some level for the development of novel products.

You're missing the point. There are some Drugs that are simply unaffordable to those that Need it. No amount of Basic Economic Principles are going to satisfy Supply/Demand in those cases.
 

ebaycj

Diamond Member
Mar 9, 2002
5,418
0
0
Originally posted by: CycloWizard
This is yet another example of the inability of Americans to understand the difference between what is actually needed. While someone might need these drugs to maintain a certain quality of life, or even to remain alive, the company also needs to make money off of said drug. If the company can't make money off the drug, then the drug would never be developed in the first place and all of the "needs" of the people would go unanswered. Thus, it is important to understand that people *want* a certain quality of life, just like the drug companies want to make money off of their products. This gives both parties incentive to help each other: the drug company helps the public by producing the drug, while the public helps the drug company by buying it from them.

This is the foundation of a free market system. Removing or diminishing the incentive of either side will always result in diminished good for both sides in the long run. You might think that you can help people today by taking a patent away, having the government produce the drug du jour, and distributing it to the masses for peanuts, and you probably would be doing good for today. However, the next time around, that company isn't going to bother developing any more drugs because you removed their incentive for doing so by taking their profits away. I'm not a fan of intellectual property in general, but I recognize that it is necessary on some level for the development of novel products.

Isn't the whole patent system really just "government restrictions on a free market via legislation"?

In a truly free market, there would be absolutely nothing preventing someone from taking your idea, reverse engineering it, manufacturing it at their costs (which include minimal R&D), selling it at a lower price point than you can afford to, and putting you (the original inventor) out of business.

Free market is a religion, and really is an all-or-nothing thing. Just like in normal religions, whose followers almost universally tend to pick and choose which parts of the religion they follow (even though it is hypocritical to do so), followers of the "free market philosophy" certainly like to refer to it as their defense for furthering their agenda, but like to disregard it when it gets in the way of their agenda.


 

CycloWizard

Lifer
Sep 10, 2001
12,348
1
81
Originally posted by: ebaycj
Isn't the whole patent system really just "government restrictions on a free market via legislation"?

In a truly free market, there would be absolutely nothing preventing someone from taking your idea, reverse engineering it, manufacturing it at their costs (which include minimal R&D), selling it at a lower price point than you can afford to, and putting you (the original inventor) out of business.

Free market is a religion, and really is an all-or-nothing thing. Just like in normal religions, whose followers almost universally tend to pick and choose which parts of the religion they follow (even though it is hypocritical to do so), followers of the "free market philosophy" certainly like to refer to it as their defense for furthering their agenda, but like to disregard it when it gets in the way of their agenda.
I think you've got it a bit backwards, actually. The current patent system forces disclosure of the formulation and process by which a drug is made. Therefore, it limits the incentive to the company, which might otherwise simply keep the formulation secret and make money off it indefinitely. Sure, it would be possible in some cases to reverse engineer the product, but this is hardly a trivial process and requires a substantial investment in and of itself. From a pharmaceutical company's perspective, it would rarely be worth it to do so. Thanks for the dig about religion though, and belittling the difficulties associated with reverse engineering something you obviously know nothing about: it makes it clear that you're following some religion of your own.
 

CycloWizard

Lifer
Sep 10, 2001
12,348
1
81
Originally posted by: sandorski
You're missing the point. There are some Drugs that are simply unaffordable to those that Need it. No amount of Basic Economic Principles are going to satisfy Supply/Demand in those cases.
You're missing the point: your argument is an appeal to emotion, nothing more. There will always be better medical treatments available for those who can afford them, just as there are better cars for those who can afford them. No amount of government intervention can overcome the laws of economics, so why do you insist that they continue to try?
 

Moonbeam

Elite Member
Nov 24, 1999
74,572
6,712
126
Originally posted by: CycloWizard
This is yet another example of the inability of Americans to understand the difference between what is actually needed. While someone might need these drugs to maintain a certain quality of life, or even to remain alive, the company also needs to make money off of said drug. If the company can't make money off the drug, then the drug would never be developed in the first place and all of the "needs" of the people would go unanswered. Thus, it is important to understand that people *want* a certain quality of life, just like the drug companies want to make money off of their products. This gives both parties incentive to help each other: the drug company helps the public by producing the drug, while the public helps the drug company by buying it from them.

This is the foundation of a free market system. Removing or diminishing the incentive of either side will always result in diminished good for both sides in the long run. You might think that you can help people today by taking a patent away, having the government produce the drug du jour, and distributing it to the masses for peanuts, and you probably would be doing good for today. However, the next time around, that company isn't going to bother developing any more drugs because you removed their incentive for doing so by taking their profits away. I'm not a fan of intellectual property in general, but I recognize that it is necessary on some level for the development of novel products.

Ask your doctor if this philosophy is right for you.

This message is brought to you by the owners of congress.
 

sandorski

No Lifer
Oct 10, 1999
70,699
6,257
126
Originally posted by: CycloWizard
Originally posted by: sandorski
You're missing the point. There are some Drugs that are simply unaffordable to those that Need it. No amount of Basic Economic Principles are going to satisfy Supply/Demand in those cases.
You're missing the point: your argument is an appeal to emotion, nothing more. There will always be better medical treatments available for those who can afford them, just as there are better cars for those who can afford them. No amount of government intervention can overcome the laws of economics, so why do you insist that they continue to try?

Incorrect, I have made no Appeal to Emotion, simply to Reality. There are Drugs that are the only Drugs for certain Diseases that are too Costly for the Average Person. In that situation Supply/Demand simply doesn't work.
 

CycloWizard

Lifer
Sep 10, 2001
12,348
1
81
Originally posted by: sandorski
Incorrect, I have made no Appeal to Emotion, simply to Reality. There are Drugs that are the only Drugs for certain Diseases that are too Costly for the Average Person. In that situation Supply/Demand simply doesn't work.
You assumed that I should care, that I should pick up the tab for this person, because you have some emotional strings which are pulled by this person's plight. This unstated axiom forms the very foundation of your argument. While I agree it is pitiable, I disagree with your proposed solution.
 

Moonbeam

Elite Member
Nov 24, 1999
74,572
6,712
126
Originally posted by: CycloWizard
Originally posted by: sandorski
Incorrect, I have made no Appeal to Emotion, simply to Reality. There are Drugs that are the only Drugs for certain Diseases that are too Costly for the Average Person. In that situation Supply/Demand simply doesn't work.
You assumed that I should care, that I should pick up the tab for this person, because you have some emotional strings which are pulled by this person's plight. This unstated axiom forms the very foundation of your argument. While I agree it is pitiable, I disagree with your proposed solution.

You assume that I should care. You have some emotional reasons why you don't want to pick up the tab, the stated axiom that forms the foundation of your argument. While it is pitiable for you that we will force you to pay, I have to agree with his solution. You might be the one who winds up needing those drugs one day and I have a feeling that if that should happen the matter would move from just pitiable to really serious.
 

daishi5

Golden Member
Feb 17, 2005
1,196
0
76


Would distributing current drugs to save lives be worthwhile if the methods taken to ensure their distribution delayed the discovery of other lifesaving drugs?
 

totalnoob

Golden Member
Jul 17, 2009
1,389
1
81
Originally posted by: Moonbeam
While it is pitiable for you that we will force you to pay, I have to agree with his solution. You might be the one who winds up needing those drugs one day and I have a feeling that if that should happen the matter would move from just pitiable to really serious.

Your "solution" involves the initiation of force..which is immoral, and hence wrong. Drugs are not natural resources like raindrops that fall out of the sky and are available to all. They can be no more considered an entitlement than your home, food, car, clothing and other things you need to sustain your life. Material goods require the time, energy, and voluntary consent of those providing them. Once you make any product of human labor an "entitlement", you bring slavery into the equation. It's actually quite an ugly philosophy once you peel back the feel-good exterior.
 

CycloWizard

Lifer
Sep 10, 2001
12,348
1
81
Originally posted by: Moonbeam
You assume that I should care. You have some emotional reasons why you don't want to pick up the tab, the stated axiom that forms the foundation of your argument. While it is pitiable for you that we will force you to pay, I have to agree with his solution. You might be the one who winds up needing those drugs one day and I have a feeling that if that should happen the matter would move from just pitiable to really serious.
I never said I had a problem picking up the tab. Indeed, I support several charitable organizations that help people do just that. I simply object to using the government as a means to enforce your own lack of empathy for these people. If you really had empathy, you would give freely without the need for legal coercion.
 

bamacre

Lifer
Jul 1, 2004
21,029
2
61
1. If the 'free market' meets the need of affordable drugs, great.

This won't ever exist again in the USA, at least not anytime in the foreseeable future.

And if anything, gov't has done a good job of making sure the market can not offer citizens affordable drugs. Banning medicines from outside our borders is a larger example of this, and outlawing marijuana is a smaller one. At one point in time that I know of, Australians were buying American-made medicines for cheaper prices than Americans.
 

MovingTarget

Diamond Member
Jun 22, 2003
9,002
115
106
I agree with this. The healthcare needs of society cannot be satisfied under #1. We've been under #2 for quite some time, and even that is failing. So here we are, trying to decide whether 2 or 3 is the most prudent.

One thing I take issue with is that we have to keep the current pharma industry around for research purposes. The research into drugs can be done via the medical university system or otherwise done by a federal organization. There are many universities nowadays that research new drugs. One thing that the government does well is research, which isn't incentivized in the markets very well in a lot of cases. We might be able to significantly reduce the cost of drugs if we just have the pharma industry producing drugs, not finding/developing drugs...
 

CycloWizard

Lifer
Sep 10, 2001
12,348
1
81
Originally posted by: LumbergTech
i'd like to see some proof of this..of course no one was talking about abolishing profits anyway
Who will develop new drugs pro bono? Significant tax increases would be needed to bring NIH funding of drug development to anything resembling what private industry currently spends.
 

dmcowen674

No Lifer
Oct 13, 1999
54,889
47
91
www.alienbabeltech.com
Originally posted by: CycloWizard
Originally posted by: LumbergTech
i'd like to see some proof of this..of course no one was talking about abolishing profits anyway
Who will develop new drugs pro bono?

Significant tax increases would be needed to bring NIH funding of drug development to anything resembling what private industry currently spends.

Why the fuck do you care anyway?

Your way didn't work so fuck off
 

sandorski

No Lifer
Oct 10, 1999
70,699
6,257
126
Originally posted by: CycloWizard
Originally posted by: sandorski
Incorrect, I have made no Appeal to Emotion, simply to Reality. There are Drugs that are the only Drugs for certain Diseases that are too Costly for the Average Person. In that situation Supply/Demand simply doesn't work.
You assumed that I should care, that I should pick up the tab for this person, because you have some emotional strings which are pulled by this person's plight. This unstated axiom forms the very foundation of your argument. While I agree it is pitiable, I disagree with your proposed solution.

Ya, like I said, not an Appeal to Emotion.
 

MovingTarget

Diamond Member
Jun 22, 2003
9,002
115
106
Originally posted by: CycloWizard
Originally posted by: LumbergTech
i'd like to see some proof of this..of course no one was talking about abolishing profits anyway
Who will develop new drugs pro bono? Significant tax increases would be needed to bring NIH funding of drug development to anything resembling what private industry currently spends.

That depends on what the tradeoff is. I havent' seen any data regarding this, but I feel that it may be quite enlightening. If the NIH (or other agency/state/etc) takes over the role of research (or some role), then those taxes can be offset by what we pay in terms of drug prices.

If the companies only have to put R&D into process development instead of drug discovery, then we should be able to get significant price concessions from them. The drug companies would no longer be able to justify their high prices citing the cost of finding new drugs...only producing them. This of course all depends on how the patents are worked out, and how trials of said drugs are done.

It may not be feasible in the end, but at the very least it is something worth looking into...
 

LunarRay

Diamond Member
Mar 2, 2003
9,993
1
76
I think that this issue like very many others requires one to choose either a 'top down' or 'bottom up' approach to the decision.

IF you choose to go from some fundamental set of criteria and then justify a decision based on that then you loose sight of the facts surrounding the issue which may, in fact, alter to some extent the fundamental criteria you use.

I think you must go from the bottom up! In this case we have a situation of health giving drugs and basically who are entitled to those and based on what rationalization.
We ALL ought to have available to us the means to control disease or eliminate it. So then how can we achieve this if the cost for each may be a significant % difference of our individual total funds to pay for it. Or, as an aside, IF the drug itself has yet to be developed how can we legislate to provide what may be developed.
I think it comes down to the role of government and the competing tax dollar proponents AND the understanding of what are Natural Rights vs Legal Rights and Other Rights that don't quite fit under the above two rights. Society ought to define what Rights folks ought to enjoy and Government ought to act in accord with that.
I think Liberty is the foundation of Natural Rights. A right either by virtue of our creator or the nature of our being. Upon the alter of Liberty sits sub Natural rights and among them is or ought to be equal right to live in a healthy manner so to enjoy Liberty unencumbered by illness.