You may not like this fact but markets will out

Indeed, I don\’t like the effects of this all that much either: but I\’ll still note that markets will out.

More than 50 drugs are now in short supply because doses which were intended for NHS patients are being sold to speculators who sell them in Europe for a profit.

Experts blame rogue pharmacists and drugs wholesalers who are selling the drugs intended for the NHS to traders who sell them in Europe where the drugs are more expensive.

Women being treated for breast cancer have been forced to trek across the country in search of the drugs Femara and Armidex.

Stocks of 56 drugs, including treatments for cancer, Parkinson\’s disease, schizophrenia, depression, kidney disease, high blood pressure, and epilepsy have now run low.

Others have been put on inferior treatments because the pills they had been prescribed cannot be found in time.

Part of this is the recent decline in the value of the pound, allied with the Single Market. Part of it is the way in which the NHS uses its bargaining power as a very large consumer to negotiate down prices.

But note that it\’s not \”Big Pharma\” making all this happen: it\’s the small guys in the distribution chain doing it.

But also note that whether you like it or not it\’s inevitable that such things will happen. When you have price differences for the same (or substituitable) goods then arbitrage will occur.

That is \”will\” occur.

Which leads to the lesson to be learned. While you can indeed attempt to set prices, you cannot do so successfully. Either you set prices so that they\’re around and about what they would be anyway in which case nothing much happens or you get them wrong and people will buy and sell them at what is the market price given whatever restrictions you have placed on the trade.

Heroin is illegal, meaning that the legal price is effectively infinite: yet it\’s openly available at less than infinite prices. The same is true of prescription drugs: set the price too low and they will be traded abroad. And as the article points out, a few years back, with a strong pound, the trade ran the other way: Brits got drugs from Spain.

One comment on “You may not like this fact but markets will out

  1. A long time ago, in a country ”just down the road”, the citizens of this wonderland, were not happy with the ‘kings’ and the way they rulled the country. So, in line with the country’s laws, an election was held and the rulling ‘kings’ were removed from the court.
    The people decided to replace the removed kings, with some court servantes and their masters.
    Before put in power, the servantes promised to speak and defend the working classes and upheld the basis of Democracy. After the change of ‘kings’, the servantes forgot about their promises to the people and became ‘ass-kissers’, a new position created for the servantes of the new ‘kings’.
    But their ‘masters’, now kIngs, made the servantes anounce the bad news to the people, with silly litlle excuses as to why it had to be the newly created job-holders who had to do this. one of the excuses was, they had to stop cinderala’s toes from growing, or the shoe would not fit. So the ‘kings’ and their newly appointed ‘ass-kissers’, decided that the best thing to do was to CUT cinderelas toes, that way, the shoe would allways fit. Now the ‘ass-kissers’ go around pretending to be ‘kings’ and threatning to do this and the other, while the ‘kings’ go around telling the people that, it was the people that put them in charge because the previous ‘kings’ were rubiish. In all truth, said a liar, they were not perfect… but at least they were a thousand camels better than the new ‘kings’ and the newly appointed ‘ass-kissers’…
    Moral of the story:
    One never rializes how good the croops were, untill they loose
    them.
    Well done Great-Britain, killed all infected with malaria but forgot about the mosquitos…

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