It is true that European countries free-ride off the high cost we pay for drugs, because it’s the U.S. market that drives innovation. But that doesn’t mean we’d be better off paying their prices, if that meant new drug development slowed. We don’t just want everyone to have health insurance in the future. We want them to be healthier, freed from diseases and pain that even the best health insurance today cannot cure or ease.
To this, progressives will note that pharmaceutical companies pump money into me-too drugs, spend gobsmacking amounts on advertising and administration, and make billions and billions in profits. And they’re right. It’s ludicrous to say that the pharmaceutical system we have now is oriented toward innovation. It’s oriented toward profit; sometimes that intersects with innovation and sometimes it doesn’t.
The solution for high prices is high prices. Because that encourages other producers to enter the market, increase supply and thereby lower prices.
Drug development is difficult, no one ever knows whether something is going to work. When something does what would we like? Other producers to enter that same market, increase supply and thereby lower prices.
Pharma companies pumping money into me-too drugs is the damn point.
Ezra Klein is an idiot, QED.
There’s no link to a larger article to check, but on the basis of these two paragraphs Klein seems reasonable.
“But that doesn’t mean we’d be better off paying their prices, if that meant new drug development slowed.”
He’s clearly saying higher prices can be worth it if it means better drugs.
“It’s ludicrous to say that the pharmaceutical system we have now is oriented toward innovation. It’s oriented toward profit; sometimes that intersects with innovation and sometimes it doesn’t.”
Nothing inaccurate in that. Sometimes you get better drugs, sometimes you get Theranos.
Which is not to say that Klein isn’t an idiot, just that this doesn’t demonstrate it.
Explain to me how the US drug market is not effectively a cartel enforcing high prices and defending against incomers. Could I buy a £20 insulin packet here and sell it in the US for 30 bucks? How would the $700 dollar guys react to that? (Insulin isn’t innovation, anyone can make it in the US market if they like.)
No, Modern insulin is biosimilars. Which the FDA has been regulating – idiotically – as new drugs with patent protections etc. This has just/is just about to change, thankfully.
The US insulin market is a product of idiot regulation.
Insulin is only an example known to me. The situation is not unique. There is a relationship between FDA and the drug companies (not to mention CDC) which works against a free market pricing structure. Remember the $700(?) epipens?
PJF – I think the clear lunacy is in complaining about “me-too” drugs. When PharmCo #2 comes out with a competitor version of a drug (especially if it’s generic) prices go down.
One other point – I’m always amused by people who complain about Pharma advertising. The people running BigPharmCo, who understand their business pretty well, believe that the money spent on advertising will bring in more money. So, if you forbid them from advertising they are poorer. This is helpful how, exactly?
Insulin is only shortly about to be no longer screwed up in the US because it was the first ever biological drug, by decades. And it isn’t physically possible to “generic” a biological drug (hence the biosimilars regulations).
Fortunately for the poor downtrodden insulin company that starts with a P, they now have a new injectable which everyone in the world absolutely needs to take twice a year forever!
Only idiots (and price setting boards) criticize me too and me three. They actually exert price pressure (when allowed to) and having half a dozen, say, sartans all doing the same thing, means patients can try them all out and see which gives them, personally, the best combination of effect and side effect.
Here’s the article:
https://countryask.com/us-news/opinion-the-economic-mistake-the-left-is-finally-confronting/
It seems odd that Tim chose the least stupid parts, since much of the rest does show Klein to be an idiot.
‘ We don’t just want everyone to have health insurance in the future. We want them to be healthier, freed from diseases and pain that even the best health insurance today cannot cure or ease.’
Sole purpose and reason for the NHS… to produce a society soooooo healthy it would gradually need less and less medical care…. how’s that working out?
John B – Indeed.
Although back in ’48, they might have been slightly over-optimistic about nuclear power and “wonder drugs” ie. them new-fangled anti-biotic doo-hickeys.
So, I’m sorta willing to give them a bit of slack there.
@ John B
That’s slightly unfair – there is less *need* for medical care if one uses the 1948 definition of “need”. Polio has been more or less eliminated, TB ditto, rickets had been (and is among the native population), most of the main childhood diseases (mumps, measles, chicken pox, scarlet fever, whooping cough, german measles) have become rarities except among anti-vaxxers and even in that group are less common, infant mortality is down, as is blindness. I’m not going to count emphysema because that’s due to closing coal mines and reduction in smoking.
The *demand* for healthcare has increased because it’s free.
The demand for healthcare has increased because people eat junk/processed food.
The demand for HC has increased because we’re fabulously wealthy & have technology that can improve our lives in ways they couldn’t imagine in 1948. We’ve cured or eliminated a lot of diseases, but with longer lifespans we have new issues to deal with. In 1948 very few people lived long enough to have dementia or Alzheimer’s and knee and hip replacements weren’t routine, etc.
“In 1948 very few people lived long enough to…”
We’d certainly never have noticed Covid in 1948, even if we’d had the technology. That’s a cool spunked £400 billion just saved (or whatever it’s currently climbing to)…
I just googled “Ezra Klein is an idiot” because I hate that little, smarmy, entitled Jewish cuck. HATE HIM and his ilk…so here I am ;o