TorteDeForm

Justinian Lane

Inter Alia on the Internet – Monday Edition

I was forced to sit through part of “I Love Money” today, and I’m coming to the conclusion that we’re 50, and not 500 years away from living in Idiocracy.

  • Why are prescription drug prices so high in England?  “Perverse incentives” that put profits ahead of patients.
  • Texas canceled a children’s drug program because of fears pharmaceuticals bribed their way into it.
  • Small retailers are in danger of going out of business because of minimum pricing agreements that are no longer illegal thanks to the pro big business Supreme Court.
  • A key Vioxx study was directed by the Merck marketing department.
  • Longtime readers know my mother-in-law died as a result of a MRSA infection.  If we lived in Sweden, perhaps she’d still be alive.  “Fewer than two per cent of the staphylococci in Sweden are MRSA, compared with sixty per cent in the United States.”  Why?  Because in the U.S. profits come ahead of patients.
  • How many professions are there?  Three. 
  • Jury duty can be interesting; jurors had (or got, depending on your view) to watch four hours of porn
  • Justinian Lane: Author Bio | Other Posts
    Posted at 7:06 PM, Aug 18, 2008 in Roundup
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    Comments

    1) Actually, big retailers prefer anti-RPM laws. It's the small retailers that are benefited by retail-price maintenance, because then they can't be undercut by Wal-Mart and Best Buy, and can compete on service, where they have a comparative advantage. Small manufacturers like it, too, because they can convince retailers to sell complex products with high margins and provide adequate customer support--without RPM, it can't promise the high margins to retailers, and the retailers won't sell the product. For a blog that is supposed to be pro-consumer, it certainly seems to be upset whenever the law permits consumers to have more choices.

    2) Trial-lawyers drove pharmaceutical manufacturers out of the antibiotic business, so I hope you're not blaming the pharmaceutical companies. It's true that trial lawyers have put profits ahead of patients.

    Posted by: Ted | August 19, 2008 8:39 AM

    Justinian: Please, do not hum in writing on a blog. It is extremely annoying. It says, my thinking noises are so important, even they have to get recorded. Feel free to hum in a brief or in a motion. Only real jackasses hum in writing.

    Posted by: Supremacy Claus | August 19, 2008 9:56 AM

    Your point about RPM and big business only applies if we're talking about the sort of goods that Wal-Mart and Best Buy carry. It's a whole different story if we're talking about Coach and Prada, etc. I don't like RPM laws because of my property-rights perspective: Once I buy something from the manufacturer, it's mine. I should be able to sell it for any price I want.

    Ketek tells us two things about antibiotics: The tort system hasn't driven pharma out of the antibiotic market, and the FDA approval process is terribly broken. More on the second point later.

    You do see the inherent conflict in our for-profit system of medicine, don't you Ted? A pill that can cure baldness or impotence or wrinkles will be far more profitable than a pill that cures MRSA. Remember my earlier post where I mentioned that dermatologists are putting "real" patients on the back-burner so they can make their Botox bucks? Perhaps the solution is to give pharma a strong financial incentive in the form of tax credits to develop life-saving drugs instead of lifestyle drugs.

    Posted by: Justinian Lane | August 19, 2008 10:02 AM

    "It's a whole different story if we're talking about Coach and Prada, etc. "

    Why? If anything, Prada is more concerned about its image than a DVD-player manufacturer is. Its entire business model is based on prestige. Ask Burberry what happens when the glamour element of its product line dissipates.

    "Once I buy something from the manufacturer, it's mine. I should be able to sell it for any price I want."

    Sure. But property rights go both ways: the manufacturer can refuse to sell to a retailer unless it agrees to certain conditions. At which point, the retailer's contractual agreement is what counts.

    "A pill that can cure baldness or impotence or wrinkles will be far more profitable than a pill that cures MRSA."

    That's only true if baldness or impotence or wrinkles are a bigger problem than MRSA that people will pay more for.

    "Remember my earlier post where I mentioned that dermatologists are putting "real" patients on the back-burner so they can make their Botox bucks?"

    It's a natural consequence of government regulation of medicine. Dermatologists can make more money in the unregulated fields, and flee the regulated ones.

    "Perhaps the solution is to give pharma a strong financial incentive in the form of tax credits to develop life-saving drugs instead of lifestyle drugs."

    That's the right direction to think about things. Perhaps longer patent protection for antibiotics, since the problem is that new antibiotics should be held in reserve for last-resort cases, which means that there isn't much demand for them during the life of the patent.

    Posted by: Ted | August 19, 2008 2:02 PM

    "At which point, the retailer's contractual agreement is what counts." I agree with you to some extent. Remember a few years ago when the director of Louis Roederer implied that he wished African Americans (or at least the hip hop crowd) would stop buying Cristal? I'm sure you'd agree we shouldn't let Louis Roederer prohibit its retailers from selling to people based on race. It's just a question of line-drawing.

    "That's only true if baldness or impotence or wrinkles are a bigger problem than MRSA that people will pay more for." Don't forget market size. More people get wrinkles than MRSA. If the market for wrinkle cream that works is 10 times as big as a MRSA market, the MRSA cure has to sell for ten times as much for the pharmaceutical to want to sell it, ceteris paribus.

    "Perhaps longer patent protection for antibiotics..." Provided that the pharmaceutical isn't gouging on price, I have no problem with a sliding scale on patent protection based on the societal usefulness of a drug.

    Posted by: Justinian Lane | August 19, 2008 3:22 PM

    "Don't forget market size."

    I didn't. If 10 million people will spend $100 to solve problem A, it's a bigger problem than a problem B that affects 100 people who will spend $10,000.

    If you want manufacturers to be making niche drugs, then they need incentives to do so. That's one reason preemption is so important: it eliminates the tremendous disincentives created by unfair product liability litigation.

    Posted by: Ted | August 19, 2008 4:35 PM

    "If 10 million people will spend $100 to solve problem A..."

    I think with drugs, it's not so simple. Use wrinkles and MRSA, for example. I would guess that close to 100% of all people who contract a MRSA infection would pay $10k to be cured. But nowhere near 100% of people who have wrinkles will pay $100 to get rid of them. Perhaps looking at percentages are more important than looking at numbers. But, that's not how the economic realities of pharma marketing work. (sigh)

    "...unfair product liability litigation."

    Well Ted, as you know I don't think the product liability laws are unfair. I do think that it's unfair for pharmaceuticals to shift the billions of dollars in economic
    damages caused by their drugs onto consumers and taxpayers. I've still yet to hear a compelling reason why if someone has a stroke and runs up $100k in medical bills because of Acme's drug, someone other than Acme should pay for those bills.

    Posted by: Justinian Lane | August 19, 2008 6:04 PM

    Justinian: Just around the corner for you, the failure of a long series of organs awaits you. Your body will become a most entertaining source of surprise and shock.

    Those are side effects you want makers to pay for. If you impose strict liability on drug makers to pursue land pirate plunder, your organ failures go untreated. You will have deserved your untreated torments.

    I suggest that no lawyer be sold any medication, since they seek the destruction of the drug companies so they may get rich. No judge. No lawyer. No plaintiff gets sold any medication. As these cult criminals seek the destruction of a top economic performer, helping billions of people, and saving hundreds of millions of lives, so should the cult criminal face personal destruction in return. I am quite serious about the black list as a remedy. Sue or threaten to sue, allow the false claim, face the series of organ failure alone.

    Posted by: Supremacy Claus | August 19, 2008 9:00 PM