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 ThisI'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"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 AMThe 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 PMFor 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 PMJust where do they think the innovation in pharms is coming from? Some drug "collective"?
Posted by: Shaun on December 3, 2006 09:12 PM