So Tired Of Winning…
By Mitch Berg
Drug companies are freezing prices.
Novartis’s chief executive, Vas Narasimhan, said during an earnings call with investors that the company had made the decision in June, amid escalating outrage over high drug prices. “We thought that was prudent, given the dynamic environment we’re currently in,” he said.
A spokesman for Novartis said the company notified the state of California, which has a new drug-price transparency law, of its decision in June, but the news was not widely known.
Who’d have thunk it?
July 20th, 2018 at 6:35 am
The asthma drug Relva has been approved in Europe and Japan, but not the United States and right there is the problem. The FDA no longer functions as a health and safety agency but rather as “captured regulation” bureaucracy whose primary mission is to protect monopolies.
Sen Ted Cruz has sponsored a reciprocal drug approval bill. You have to wonder where our “nice lady” senators stand on that.
July 20th, 2018 at 9:17 am
Gee, why wouldn’t this news be widely known?
And Greg, our nice lady senators (Vanilla Fluff and Frau Blucher) are more interested in reciprocal abortion rights.
July 20th, 2018 at 11:00 am
The unwritten story is Trump’s approval rating is quite steady — about 45% approve, and 52% disapprove. This despite the full-throttle, 24/7 outrage machine operated by all of the democrats, half the republicans, the media, and academia. Amazing. Our elite institutions aren’t nearly as powerful as they believe themselves to be.
July 20th, 2018 at 11:01 am
The prescription drug market is so chaotic that increasing/holding/reducing prices doesn’t even mean anything. When the same drug can sell for $5,000 per dose and $5 per dose, the problem is much deeper than price.
July 20th, 2018 at 11:43 am
That’s profound, Emery. I would never have suspected there might be deeper problems in the drug market. Pray, enlighten us: what are the problems and what are the solutions?
July 20th, 2018 at 12:25 pm
The problem is called government.
July 20th, 2018 at 1:01 pm
Well, Emery, for that, you can thank your hero Barack.
He gave Big Pharma carte blanche to charge what they wanted, as long as they backed his piece of crap Obamacare.
July 20th, 2018 at 1:06 pm
JD: The only way to bargain effectively with an effective monopoly is to create a monopsony on the other side of the table.
BH429: Obamacare perpetuated everything that was bad about the system they were attempting to fix. You’ll never hear me defend the ACA.
July 20th, 2018 at 2:44 pm
So when the government grants a monopoly seller, it must create a monopoly buyer in order to mitigate the effects of having a monopoly seller.
I think that is an accurate paraphrase of Emery’s freakonomics.
July 20th, 2018 at 3:29 pm
Are you saying you agree with having an economy dictated by presidential threat?
July 20th, 2018 at 5:48 pm
I don’t think your solution works, Emery.
Wal-mart is a monopsony. It’s a giant buyer which is able to play manufacturers off against each other. They’ll offer to buy your entire output for the next year but at a buck less than you’re presently charging – and if you don’t take this offer, they’ll make the same offer to your competitor. Single buyer, competing sellers, prices go down.
If I invent a drug to cure diabetes, on which I’m given a patent so I can be the exclusive seller for 17 years, I will be able to charge all the market will bear. That’s the point of the patent – it gives me a monopoly to protect my right to profits to repay my investment.
If Wal-mart comes to me and makes that offer, I’ll tell them to pound sand. If they don’t want my drug at my price, I’ll sell it to someone else. There is no competitor to undercut me so no reason to lower my prices.
Can you explain why your solution works and my analysis is wrong?
July 20th, 2018 at 6:34 pm
Emery on July 20, 2018 at 3:29 pm said:
Are you saying you agree with having an economy dictated by presidential threat?
No. That would be stupid. I said nothing about presidents.
July 20th, 2018 at 6:41 pm
Normally a monopoly price is controlled by substitute goods. If I don’t want to pay the monopoly price markup for an Apple or MS OS, I can go Linux, or go without.
For some drug monopolies there may be no substitute good, so the only option is pay the monopoly price or go without. Nice position for a seller to be in.
On the other hand, any one can buy stock in big pharm & rake in a share of the massive profits that they make. Pfizer pays a divident of around 4%.
July 20th, 2018 at 7:27 pm
[…] Nicaraguan Crisis? Power Line: The Brennan Factor Revisited, also, Analyze This Shot In The Dark: So Tired Of Winning The Jawa Report: Sandcrawler PSA – Just To Get Strzok’s Creepy Face Off The Front Page […]
July 20th, 2018 at 7:36 pm
At one point, counterprotesters pulled a small American flag off of a pickup, doused it in lighter fluid and set it ablaze. The crowd then began chanting, cursing the government and saying, “America was never great.”
http://www.latimes.com/local/lanow/la-me-ln-maxine-waters-protest-20180719-story.html#
Maxine Waters is an outspoken critic of President Trump. Her supporters are America-hating flag burners. Therefore, if you are an outspoken critic of President Trump, you are an America-hating flag burner.
Guilt by association makes it so much easier to find out who the bad people are.
Gotta love the LA Times. They spend the bulk of the story accusing the Oath Keepers of being a hate group, citing no specific instance of Oath Keeper “hate.”
In paragraph five they say the Oath Keepers called off the protest to ensure peace. Not until paragraph ten do they cite the only actual act of hate to occur, when pro-Maxine protesters tear a flag off of a truck (vandalism) and then light it on fire while shouting anti-Trump and anti-American slogans.
July 20th, 2018 at 9:51 pm
Utilizing a monopsony is the economic lesson 70 years of various forms of single-payer and socialized medicine: the only thing that really works to reduce pharmaceutical prices, but also hospital and doctor fees, is to create a knowledgeable and motivated monopsony which uses its monopsony powers to limit the prices of medical goods and services.
Is this an abandonment of market economics and philosophy? Sure, but neither the supply side nor the demand side of the healthcare market is an efficient market worth preserving. Hospitals and doctors’ offices are not efficiently run by 21st century standards of business, and bloated pharmaceutical firms spend far too much on marketing and overly ambitious research, with ever-diminishing returns in new products. Patients know too little to be intelligent consumers, and their employers have serious conflicts of interest and little expertise as well. We abandoned the market for the most part, anyway, when rich nations decided in the mid-20th century that we were going to share the burden of others’ healthcare costs. A health care monopsony is the only pragmatic solution, and the only way that health care costs can or will be reduced in the US.
July 21st, 2018 at 1:25 am
Reducing consumer choice increases economic efficiency.
The 1930s are calling, it wants its economic policy back.
No one — and I mean no one — disputes that monopoly (e.g, IP protection) increases innovation in pharmaceutical developement. The lion’s share of Big Pharma’s profits are sunk in R&D, not ‘adverstising”:
http://www.scielo.br/scielo.php?pid=S0104-530X2016000200365&script=sci_arttext&tlng=en
I am not a free market purist. But what the free market does is guarantee the most efficient production of a given product. The idea that a hundred — or a thousand — bureaucrats can produce greater value than the market can is absurd.
July 21st, 2018 at 6:28 am
If we really wanted cheaper drugs, it would copy what European countries do, and refuse to buy drugs that do not offer good clinical value for money.
July 21st, 2018 at 6:42 am
Emery, thanks for the explanation. It feels like there’s something wrong with that analysis but I’ll ponder it before I reply.
July 21st, 2018 at 7:53 am
Joe, the reason Dunnink_Kruger’s explanation feels wrong is, it’s not his explaination.
“If we really wanted cheaper drugs, it would copy what European countries do, and refuse to buy drugs that do not offer good clinical value for money.”
https://www.economist.com/leaders/2018/05/19/why-trumps-plan-will-not-cut-drug-prices
My rule of thumb is, if Emery is weighing in on anything other than how to blow snot bubbles from your nose, it’s plagiarized.
July 21st, 2018 at 8:11 am
And, of course, the rest of Emery’s analysis is cobbled together from the comments of much smarter people than he…
“The only way to bargain effectively with an effective monopoly is to create a monopsony on the other side of the table. That is the economic lesson 70 years of various forms of single-payer and socialized medicine: the only thing that really works to reduce pharmaceutical prices, but also hospital and doctor fees, is to create a knowledgeable and motivated monopsony which uses its monopsony powers to limit the prices of medical goods and services.
.
Is this an abandonment of market economics and philosophy? Sure, but neither the supply side nor the demand side of the healthcare market is an efficient market worth preserving. Hospitals and doctors’ offices are not efficiently …”
https://www.economist.com/node/21742698/comments
If you’re interested in having this discussion with an intelligent thinker, I suggest going to the source. Emery is just diddling himself; as usual.
July 21st, 2018 at 8:41 am
These comments remind me of why Obamacare failed so spectacularly – as well as why other Democratic (Socialist) plans promise to do the same.
Obamacare and free college attack affordability rather than cost. To make medical treatment more affordable, Obamacare sought to bring more payers into the market by mandating everyone buy insurance – but did very little to control costs.
The same with Free College. If government pays for college, it becomes more affordable, masking the problem of out-of-control costs.
So why not address costs?
Or put another way, what is the politics of controlling costs?
Uh…..who do doctors, nurses, radiologists, professors and university administrators vote for? And who would the ones who don’t vote Democratic, vote for if Congress attempted to lower costs?
Hint: costs = salary.
July 21st, 2018 at 10:25 am
gee swiftee, with a buzzkill like you around Emery’s going to end up with a bad case of Wanker’s Cramp.
Emery, for relief try: https://www.scribd.com/doc/6325751/Wankers-Guide
July 21st, 2018 at 11:57 am
The Economist is about the worst thing you can read if you want to know how economics works. The Rationalwiki says of The Economist: “Criticisms
The Economist is intended for a highbrow, well-educated, upper-class audience, and it shows. Most of its writers (who don’t attach their names to articles, but rather hide behind pseudonyms or don’t give a name at all) are young and fresh graduates of Oxbridge. Because of the serious tone of the magazine, readers may be deceived into thinking they must be experienced and distinguished journalists. Therefore, the magazine steers clear of vulgar libertarianism, but tends towards espousing free markets and privatization as a solution to almost every problem. Having said that, The Economist staff are by no means free-market fundamentalists; they just have a strong bias towards market solutions, though they also support state intervention for some things (like healthcare)”.
More serious and detailed criticism of The Economist can be found here: https://www.spectator.com.au/2017/01/went-wrong-economist/
The article is by Bob Catley, an academician who once served in the Aussie parliament. Catley especially dislikes The Economist‘s editorial viewpoint: “warmist cultism, same sex marriage, drug legalization, chosen restrictions on free speech, acceptance of hideous cultures and cultural practices, an excessive toleration of Islam, excessive support for Blair, Hillary and the EU, and a sustained critique of Christianity, of which I am not an adherent but whose worthy historical virtues I nonetheless admire. [. . . } The Economist’s complete mis-identification of the modern democratic state. The modern state is not primarily an impediment to the market economy; it is the only means of establishing the legal structure on which it is based.”
Catley echoes two of my criticisms of The Economist: It will tell you things that an Econ 101 course will inform you are false, and it has been wrong about many of the most important events in the world of economics. The Economist was wrong on the Brexit vote, and wrong on the election of Donald Trump, and wrong on the welcome that Syrian refugees would receive in Europe. What’s more, because The Economist nearly always supports American military intervention abroad, it is sometimes accused of being influenced by the CIA.
July 21st, 2018 at 12:57 pm
Maybe we can start 3D printing decent healthcare too.
July 21st, 2018 at 3:38 pm
Mamm, you think Emery understands what he plagiarized? Lol, no.
He’s attracted to multisylabic words. It’s one of the things I look for before I waste my time tracking down who he is plagiarizing. He’s Dunning_Kruger.
Emery has no shits to give about the value of the content of his thefts, as long as it sounds teh smert, he’s good.
In fact, the Emery character is so over the top stupid, I’m beginning to think he is Merg’s sock puppet to rev up the comments.
July 21st, 2018 at 3:42 pm
And now, watch.
Dunning_Kruger will dissapear for a couple days. Hes been outed, mocked and belittled again. He has no capacity to rebut, so he’s gonna hide.
He thinks everyone has the same long term memory problems he has.
July 21st, 2018 at 3:46 pm
Maybe we can start 3D printing decent healthcare too.
Pity you can’t 3D print an original, instructive thought. He’ll, who am I kidding? You’d do well to 3D print a successfully prepared bowl of Spaghetti-O’s.
You po ting.
July 21st, 2018 at 4:44 pm
The Trump presidency is a real-life Caddyshack, with Trump as Rodney Dangerfield and Ted Knight as every liberal.
I suppose many liberals grew up watching Caddy Shack and idnetifying as the Rodney Dangerfield character. When they see how closely the Current Occupant resembles Rodney Dangerfield, and that the part they are playing is the snooty, uncool president of the golf & yacht club, they will demand the movie be remade, with the Ted Knight character the hero and with the rodney Dangerfield character as the villian. The real Bill Clinton will play the part of Carl.
July 21st, 2018 at 6:44 pm
You’re right MP.
When leftists are out, they’re pretentious and boring. But when they have power, they become Caligula; imperious, mad and dangerous.
They are, in the main, a pestulance on civilization.
July 22nd, 2018 at 8:08 am
Dang, MP, that 4:44 comment is darn near profound.
July 22nd, 2018 at 8:08 am
[…] From a commenthere: […]
July 22nd, 2018 at 2:59 pm
He did nail it, didn’t he?
July 23rd, 2018 at 9:15 am
The problem with Emery’s solution is that either patients don’t get the benefit of an available drug that the single payer refuses to buy, or that pharma companies have no reason to develop new drugs since the single payer would not reward their efforts.
July 23rd, 2018 at 9:36 am
MP: I loved it when Trump told Merkel that she must have been something before electricity.
July 23rd, 2018 at 9:39 am
And in the Caddyshack alternate version of our universe, Spaulding represents the media.
July 23rd, 2018 at 12:37 pm
MP, your 4:44 is brilliant.
Additional evidence the delusion is real: sticking it to the man. https://www.youtube.com/watch?v=ZG-VB5xb6KM
July 24th, 2018 at 7:51 am
There are a number of problems with the American health care.
First, researchers develop new treatments using government funding. If their efforts are successful, they leave the institution, patent the treatment then set up a corporation or sell the patent to another corporation. The corporation then sells the treatment at an inflated price until the patent expires.
When the patent expires, the FDA employees often assist in maintaining the monopoly by placing multiple bureaucratic roadblocks to applications for generic drugs then exit the agency for a well paid job with Big Pharma on top of an already lucrative federal pension.
The FDA also limits competition by inventing new regulations on existing drugs including drugs which were granfathered into the Food & Drug Act.
It doesn’t help that many states and localities require a certificate of need. Let’s say you find a lightly used MRI machine. One would think that you could buy this and set up Bubba’s Cheep MRI’s but without the certificate of need the community is denied your service.
Another problem with. healthcare is that the major customers are in fact government agencies; VA, Medicare, Medicaid, and Indian Health Services to name but a few. Each of these agencies hire hundreds of thousands of employees who process mega-forests of paperwork.
Finally, what few stop to consider is that all these administrators must be paid, office space purchased or leased, furniture bought or leased, Utilities paid and office supplies purchased by the truck load. Who do you think is paying this? If you say the government, where does the government get its money?