December 03, 2006
I Hate to Say I Told You So

Some comments in past threads on the political antics of Democrats on the Medicare drug benefit and related nonsensical policy proposals (which the MSM already reports is a sinking ship) have brought the usual populist arguments in response, oft seen in liberal circles. Let government "negotiate" directly with the evil pharmaceutical companies to demand lower prices they say, the government pays for all the research anyway, doesn't it?

Yeah, right. As usual, such comments display the disturbingly all-American trend of having little understanding of economics or the reality of many industries in the modern age.

Pharmaceutical giant Pfizer recently made news with a stark reminder of the monetary risk required in the drug industry, and thus the need for profit to incentivize such risk. Pfizer announced it was halting late stage development of a high-profile cholesterol drug. This after investing a whopping $800 million in attempts thus far to bring the product to market. Such setbacks are harsh for pharmaceutical companies, and usually decimating to their less-diversified biotech counterparts. In this case,

Pfizer said the loss of the product would mean an acceleration of cost cutting measures it promised in October, which were already supposed to extend beyond the promise it made last year to slash $4 billion in expenses by 2008.

That's likely to mean more job cuts and less spending on other drug development programs hoping to bring new therapies to the American medicine cabinet. The same outcomes one can expect if liberal Democrats were to get their way and have the federal government "negotiate" drug prices.

No thank you.

UPDATE: The Wall St. Journal interviews the CEO of Eli Lilly in a story published today. He gives some stark warnings on the stakes of going down the path Democrats would like, borne out by past history of the industry's research investments.

Posted by Eric Earling at December 03, 2006 08:41 AM | Email This
Comments
1. The Democrats aren't really against "big pharmaceutical companies" per se... they're just against not having their own fat slice of the action. The whole point of their push to be directly involved with pharmaceutical pricing- hell, about anything they do that involves the free market- is to force a collective socialist economy upon the United States. It isn't about the people. It isn't about the children. It isn't about the minorities. It's about taking the freedom to choose out of the hands of American citizens and placing the determination of our lives into the hands of the Democrat socialist elites like Kerry and Pelosi.

I'll send up a little warning flare to you: if you think your ER wait is long now, just watch. If you allow the Democrats to nationalize healthcare, you ain't seen nothin' yet.

Posted by: ERNurse on December 3, 2006 09:52 AM
2. To quote from the previous round of attempted "Hillarycare"...

"If you think health care is expensive now, just wait to see what it costs when it's free".

Posted by: Ken on December 3, 2006 10:44 AM
3. Having spent nearly 3 months in the hospital, it's surprising how many of the staff fall for the government being the answer to the ills of the medical situation.
Most of them are libs, granted, but none have any idea of what it takes, how many hoops and regulations one needs to comply with, to put a product on the market.
For two weeks, I could do nothing while a hospital in Hawaii practically pillaged my private insurance, but of course the Hawaii hospital was managed by the state. The couple months back in WA near the insurance company was a different story.
I do wonder though, how a state run hospital will rape the state...oh never mind. The tax increases will take care of that.
One other thing though. While in Canada, the locals were constantly bragging about their "free health care system". Many of the braggarts asked where I got this nifty brace on my ankle as they've seen nothing like it. The smart a$$ answer was "Well I guess your FREE system won't provide you with one now will they!!??"

Posted by: PC on December 3, 2006 10:56 AM
4. If the Dems succeed in implementing socialized medicine, internally, prices will go through the roof, quality will decline, waits will increase, etc. And then that will be the backdrop to ask for more money, to "fix" the system, etc. just as it has been with public education.

The whole trouble with the healthcare system now is that there's no connection between the patient (consumer) and the provider (seller) because of the current laundering through all of the health maintenance organization and insurance companies. If the system were privatized so that there was real competition, consumers would be able to choose their medical products just like they do their electronics and their produce. And prices would be driven down. It would also create an incentive for people to be healthy, because health insurance would be for catastrophic problems as it is with automobile insurance, and minor healthcare would be financed directly by the consumer. Many more people would focus on prevention, and overall health as a directive incentive to keeping their own costs low. And mobile preventative screening clinics would become all the rage so that cheap technicians could perform a large battery of tests at a very low cost direct to the consumer.

This is what I do now as an independent business owner. I have a very high deductible and a mostly catastrophic policy. I maintain my own health through proper diet and exercise, and my family does the same. We use cheap regular screenings to be aware of any major health issue that might arise, and we otherwise pay for the small incidental health issues at clinics.

I hate hospitals, and I avoid them at all costs. All they are is a giant waste of money with simple procedures and supplies at costs reminiscent of the the $50 government hammers. Hospitals can get away with that waste because it's all a back-end negotiation with insurance companies and the consumer rarely sees or cares about the actual costs because it is fronted by someone else.

The whole system needs reform, but socialized medicine is the worst possible outcome because it would only emphasize all of the problems the system has today and make everything worse.

Looks for Dems to gleefully support such an economically mindless approach.

Posted by: Jeff B. on December 3, 2006 02:09 PM
5. Ask any Canadian how their system would work if most of them didn;t have to option to go the US for any procedure that they can't wait 6 months to 2 years for (80% of the population didn't live within 100 miles of the US border).

For most people in the US, if you need a procedure, you have it within a few days to a couple weeks. In Canada, if you need a procedure, you hope to survive the slow climb to the top of the waiting list. If the US had 2 year waits for fairly simple knee surgeries, ther would be rioting in the streets. Look at the worst US innercity public hospital - that is your level of service in the wonderful Canadian system (rent the Barberian Invasions - a Canadian made moovie with a Canadian hospital as the backdrop).

Posted by: krm on December 3, 2006 06:26 PM
6. ERNurse smokes out the true nature of this beast; for libs, the motivation behind the rhetoric is the destruction of the free choice in our current private model, and replacing it with their socialist (communism light) juggernaut.

Just where do they think the innovation in pharms is coming from? Some drug "collective"?

Posted by: Shaun on December 3, 2006 09:12 PM
7. If the government spends billions studying biological weapons and their delivery systems while rarely successfully finding a cure would it not make sense to have them do the same with normal, daily health problems? The defense budget is enormous anyways and to include health care in a strict program would make sense. Bring in the leaders of the healthcare industry to lead the new agency. Let the professionals work for the government much like professional lawyers and investigators to in other government apparatei.

Posted by: Andrew Mozeleski on December 4, 2006 08:05 PM
8. In response to post number 7...
Why should our defense budget make room for the nations healthcare problems when the primary goal of the dod is to be the federal department charged with coordinating and supervising all agencies and functions of the government relating directly to national security and the military.

Posted by: Jeff on December 4, 2006 08:21 PM
9. Andrew @ #7, I just went through the constitution real quick, don't see a call for a dept of pharmacy.
Now we all know that means squat to politicians as they get security creating those little monsters. But personally, the way DOD gets the weapons that secure your home from enemies both foreign and domestic, is what PJ O'Rourke calls cheap homeowners insurance. I don't know what an Apache helicopter costs but timesharing one with the other fellow Americans is worth it.
Those are operated by the pros.
Government healthcare for the masses would without question end up like the post office. Think about that when you're in line mailing a package this Christmas season.
(ooops, Stefan, can we say Christmas on this site or do we have to go the Kwansmas route?)

Posted by: PC on December 4, 2006 11:04 PM
10. well mr pc. The dept of defense is not in the constitution either jack. Andrew also never mentioned apache helicopters, but since were speaking of defense programs, the US military has several multi-billion dollar aircraft platforms when there is no formal rival and the economy can support up to 20 more mutlt- billion dollar platforms. I'm American and proud to be apart of the best nation on the planet. I have a cough and I think my government knows the cure.

Posted by: zach leo on December 5, 2006 10:22 AM
11. ..."a well armed militia"...
What do you call that zach?

Posted by: PC on December 5, 2006 11:30 PM
12. not armed, regulated. Too much going on at once.
Seems to me though, it calls for militia being a duty of government.

Posted by: PC on December 6, 2006 02:23 PM
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