Contributor Post Created with Sketch. So, Readers, What Happens When We Fix Pharmaceutical Prices?

 

Let me say from the outset that I don’t exactly trust the reporting of the Daily Mail, and that if Greek children are being dumped in the streets, it’s not because their parents are poor, it’s because their parents are bad. 

But let’s leave that argument aside and look at the logic of the less sensationalist claim:

Further evidence of Greeks feeling the pinch of austerity measures is the lack of aspirin and other medicines now available in the country.

Pharmacists are struggling to stock their shelves as the Greek government, which sets the prices for drugs, keeps them artificially low.

This means that firms are turning to sell the drugs outside of the country for a higher price — leading to stock depletion for Greeks.

That’s not the “pinch of austerity,” that’s the “pinch of price-fixing.” That’s what happens when you try to keep prices artificially low. That’s very basic economics, and if a reactionary right-wing rag like the Daily Mail doesn’t grasp this, Britain has no hope. 

I do wonder what’s wrong with the Greek black market, though. Surely the same racketeers who keep drug stores in Istanbul full of pharmaceuticals that according to the law aren’t sold here could be helping to keep Greece in aspirin?  

There are 13 comments.

  1. Liver Pate Inactive

    They don’t have aspirin, but there are more cell phones in use in Greece than there are Greeks. I can’t recall if Bayer was one of the Seven Sages of Ancient Greece or not.

    • #1
    • January 12, 2012, at 10:28 AM PST
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  2. flownover Inactive

    I thought this was a telling indicator of the state of Greek affairs:

    http://www.nydailynews.com/life-style/health/pedophilia-a-disability-greece-uproar-allowing-pedophiles-kleptomaniacs-special-status-article-1.1004112

    • #2
    • January 12, 2012, at 10:32 AM PST
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  3. DrewInWisconsin, Type Monkey Member

    I’m not buying the “austerity measures” excuse while Greece is giving disability payments to pedophiles.

    • #3
    • January 12, 2012, at 10:32 AM PST
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  4. Nobody's Perfect Inactive

    The ultimate effect of price controls and regulatory restrictions imposed upon pharmaceutical companies is that people will unnecessarily suffer and die.

    Given the staggering cost of developing a new drug, pharmaceutical companies have no choice but to practice triage with regard to which research to fund and which to eschew. As government price controls strip them of working capital, fewer drugs are developed.

    Government-controlled health schemes inevitably must apply heavy pressure to control drug prices, in order to avoid going bust. In doing so, they kill people.

    • #4
    • January 12, 2012, at 10:53 AM PST
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  5. DocJay Inactive

    All price controls are inane. Socialism is inane. The problem in the US is that big pharma colludes and price fixes themselves. In addition, big pharma has lobbied for tremendous legal advantages they should not have. I have no love for big pharma but would never use the government to price fix them. Rather I would strip away their lobbyist influence which is considerable and allow a free market fix.. I have no love for their industry, having been lied to by their reps, as was directed by the upper management.

    • #5
    • January 12, 2012, at 11:08 AM PST
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  6. Stuart Creque Member
    Claire Berlinski, Ed.: Let me say from the outset that I don’t exactly trust the reporting of the Daily Mail, and that if Greek children are being dumped in the streets, it’s not because their parents are poor, it’s because their parents are bad. ·

    I note that at various times in human history, people have dealt with the problem of too many mouths to feed by reducing the number of mouths and focusing on the ones in which they’ve already invested the most time and resources.

    It’s not limited to humans, either. A number of species use the same solution to the problem of scarcity.

    • #6
    • January 13, 2012, at 1:11 AM PST
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  7. Jeff Y Inactive

    Price fixing kills.

    • #7
    • January 13, 2012, at 2:36 AM PST
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  8. EThompson Inactive
    DocJay: The problem in the US is that big pharma colludes and price fixes themselves. In addition, big pharma has lobbied for tremendous legal advantages they should not have.

    Pfizer, as an example, must make a $800 million dollar investment, on average, to fund the research and development of a new drug that won’t hit the market for a full 10-15 years. Prevented from earning a profit, Pfizer (et.al) will end up as GlaxcoSmithKline, a British-based company that can no longer afford to produce a flu shot.

    Big Pharma USA should enjoy every advantage the govt can legally extend to them; it is the world’s best hope for providing state-of-the-art, life-saving drugs.

    • #8
    • January 13, 2012, at 8:15 AM PST
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  9. DocJay Inactive

    Every advantage can include deliberate lying about potentially deadly side effects through bought doctor speakers and reps who are instructed to minimize these side effects. Vioxx put me over the edge since I caused two heart attacks at a minimum through my naivete. I really do understand your point EThompson but there’s a reason why pharma was the first domino to fall against obamacare. I guess there should be freedom from silly restrictions, punishment against class action lawyers bringing bogus suits, freedom from political influence of drugs to be developed, patent rights reflecting the difficulty of development involved somehow, and anything else beneficial to a business that does not include the government picking winners and losers.

    • #9
    • January 13, 2012, at 11:16 AM PST
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  10. cbc Inactive
    cbc

    Crony capitalism strikes again !!!!

    Big Pharma can corrupt the process and put small pharma out of business, because we have given the government the power to let them do so. Government regulation almost always works to protect the big and the politically powerful against competition.

    • #10
    • January 13, 2012, at 12:05 PM PST
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  11. SoCalUSA Member

    It is happening here too. There are a number of commonly used drugs that are in short supply every day. Talk to hospital pharmacists about how they procure the daily drug needs.

    • #11
    • January 13, 2012, at 12:08 PM PST
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  12. Tom Jones Inactive

    Some time ago I was put in charge of the operations of a retail food company, across Europe. Although Greece was not among my territories, France and Belgium were. I needed to hire some decent executives in many of the `countries, and the reckoning we used to create an offering package was Base Salary plus 130% to cover “social charges.”

    I had to terminate a do-nothing alcoholic based in Brussels, who for ten years had been living his life off his company Amex card. No one had dared fire him, given what it too would cost. It ended up at, in Pounds Sterling, around 250K (or US$375K) to get him gone. As the only American involved in the operation, I questioned these numbers but everyone shrugged it off as “the way things are.” This was 30 years or more ago, and I remember wondering how the “system” could survive. The chickens truly are coming home to roost.

    • #12
    • January 13, 2012, at 12:41 PM PST
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  13. DocJay Inactive
    SoCalUSA: It is happening here too. There are a number of commonly used drugs that are in short supply every day. Talk to hospital pharmacists about how they procure the daily drug needs. · Jan 12 at 11:08am

    You are very correct. On the low end, various regulations have messed with profit motive. We have run in to shortages of diuretics, anti herpes medicine and so many others that are generic. There are almost never high end shortages so rest easy, our hair growth, energy drugs, and ED pills are flowing.

    On the high end, Big Pharma has behaved abhorrently. Merck has a special place in my little hate jar for their vioxx lies. Pfizer had handled the Lipitor going generic with some very questionable moves in price manipulation of the generic product. I bet they lose big but Im sure the stock price reflected that already.

    Idiots that want a government to give them stuff all the time should never be upset when the more devious and intelligent game the system.

    • #13
    • January 13, 2012, at 12:58 PM PST
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