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You are here: Home / Economics / Free Markets Solve Everything / Another Free Market Success Story

Another Free Market Success Story

by $8 blue check mistermix|  August 20, 20117:30 am| 51 Comments

This post is in: Free Markets Solve Everything

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There’s a shortage of some chemo drugs and antibiotics this year:

More than half the recent shortages have resulted because government or company inspectors found problems like microbial contamination that can be lethal on injection. Others have occurred because of capacity problems at drug plants or lack of interest because of low profits, according to the F.D.A. […] “The race to the bottom has led to an increase of products coming from plants in China and India that may have uncertain supply and may have never been inspected,” Ms. Bresch said. “If the F.D.A. was required to inspect foreign drug plants at the same rate it does domestic ones, we might not have so many of these shortages.”

One example: Johnson & Johnson, whose cancer drug Doxil is in short supply says that “Our third-party manufacturer has had some manufacturing issues related to capacity.” J&J made $2.8 billion last quarter, with a yearly profit margin a bit over 20%, but that’s still not enough.

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51Comments

  1. 1.

    Professor

    August 20, 2011 at 7:41 am

    That is what is called ‘CAPITALISM’

  2. 2.

    WereBear

    August 20, 2011 at 7:42 am

    The Ferengi were supposed to be a cautionary parable.

  3. 3.

    Keith

    August 20, 2011 at 7:44 am

    If only they weren’t regulated, all of these problems would go away.

  4. 4.

    Sko Hayes

    August 20, 2011 at 7:50 am

    I work with livestock and we have the same issues with drugs and manufacturers. When a plant gets shut down, it can take months to get going again, and of course shortages result in higher prices. Then the plant gets going again, but the prices never go down.
    Things that make you go hmmmm…

  5. 5.

    Punchy

    August 20, 2011 at 7:52 am

    I work in a very related field, and youd be STUNNED at what my company will now accept in terms of quality, as long as its cheaper n thus grows the bottom line….

  6. 6.

    A Mom Anon

    August 20, 2011 at 8:00 am

    Perhaps exposure to all that cash causes some sort of brain virus where all sense of decency and logic is eaten away. R&D THAT assholes. I really think the whole of business schools and corporate culture is sick,mentally and physically.

    Seriously,after a person has,oh,a half a billion(and I’m being generous) or so in personal wealth wtf else do they really need? And could we please get something done so that executive salaries are not tax write offs anymore? This is so depressing,jesus.

  7. 7.

    Dennis SGMM

    August 20, 2011 at 8:01 am

    Sort of related:
    I sometimes watch the History Channel. It has ads. A goodly proportion of those ads are for new medications. What jumps out at me are the disclaimers at the end of nearly every one of them.

    “Side effects include nausea, diarrhea, projectile vomiting, and incontinence. If you experience muscle aches while taking this medication call your doctor immediately as this may be the sign of a rare but fatal side effect.”

    Yeah, I’m paraphrasing but that’s pretty much the rap. Most of these new products seem to be offering incremental improvements over the old ones at the cost of some fairly horrific side effects. This is progress?

  8. 8.

    Earl Butz

    August 20, 2011 at 8:04 am

    People die every day. What’s the fuss all about?

  9. 9.

    Stu

    August 20, 2011 at 8:08 am

    “If the F.D.A. was required to inspect foreign drug plants at the same rate it does domestic ones, we might not have so many of these shortages.”

    Am I the only one who sees the gaping hole in the logic of this statement?

  10. 10.

    Dennis SGMM

    August 20, 2011 at 8:08 am

    @Earl Butz:
    Libertarians will assure you that dying is your way of depriving these companies of your business.

  11. 11.

    A Humble Lurker

    August 20, 2011 at 8:10 am

    @Dennis SGMM:

    I want to second this. I remember when they use to parody those kinds of adds on things like Madtv. Now the actual adds are like twice as long as those parodies were. (Oh my God. I’m old.)

    It doesn’t sound like any pill is worth taking anymore because the side effects are worse than the thing they’re supposed to solve.

  12. 12.

    WereBear

    August 20, 2011 at 8:16 am

    @Dennis SGMM: My husband absolutely loathes the ad for Abilify; which causes death in elderly patients and suicidal thoughts in younger ones. For something that just might moderate your depression… unless, of course, it winds up increasing it.

    It’s disgusting that they are allowed to advertise, anyway. Something like 1/3 of the prices we pay winds up being because they are spending money on advertising!

    But, just like campaign financing, this winds up being good for the moguls who run television.

  13. 13.

    Keith

    August 20, 2011 at 8:18 am

    @Dennis SGMM:
    My favorite drug ad is one The Onion ran for a drug called “Sucrosa” (or brand-name “placebo”), with the slogan “It’s a pill.”

  14. 14.

    Ron

    August 20, 2011 at 8:22 am

    @Dennis SGMM: Keep in mind they are required by law to report all possible side effects in these ads. So even if it occurred in a small number of patients it’s still one of the “possible side effects” rattled off.

  15. 15.

    Dennis SGMM

    August 20, 2011 at 8:27 am

    @Ron:

    Good point. It’s still disturbing that so much of the new stuff seems to come with debilitating or fatal side effects for what seems to be a modest increase in efficacy.

  16. 16.

    mistermix

    August 20, 2011 at 8:32 am

    @Stu: Here’s the logic:

    Bacteria and other contaminants were discovered in medicines when then came to market.

    FDA inspections of the factory would have found the source of contamination, or the process errors, before the medicine came to market.

    Therefore, instead of having a shortage of medicine because batches have to be taken off the shelves post-production, contaminant-free meds would have been produced after correcting the issues found by the FDA.

    It’s the same logic as meat inspection – more of it would lead to less sickness and death, not less meat.

  17. 17.

    RSA

    August 20, 2011 at 8:34 am

    The best/worst line in the article:

    Some wholesalers buy certain drugs in large quantities because they are betting there will be a shortage. The excessive buying can help make their predictions come true.

    Who could have expected that leaving amoral organizations concerned only with profit in charge of supplying life-saving drugs would lead to any problems?

  18. 18.

    SiubhanDuinne

    August 20, 2011 at 8:36 am

    I’m seeing a sidebar ad here for “ADD/ADHD Symptom Relief — SYNAPTOL.”

    Hmmmm.

  19. 19.

    WereBear

    August 20, 2011 at 8:36 am

    @Ron: Yes, but this is after they screen out “obvious reactors” during studies. And then doctors either don’t report side effects, or they are tagged as isolated incidents.

    Seeing how statin myopathies went from “invisible” to “holy crap” levels possibly higher than 10%… I would tend to listen to those rare but serious side effects.

    They are telling us something.

  20. 20.

    Wag

    August 20, 2011 at 8:36 am

    @ Dennis SGMM and @ WereBear

    As someone who works in a related field, and who routinely reads drug profiles and side effect lists any prescription drug, generic or brand name, outrageously expensive or dirt cheap, has a similar list of side effects. The problem with the current regulations requiring disclosure of side effects is there is no sense of perspective. A side effect like mild diarrhea may occur in 1% of patients, but is given the same weight as a1 in 100,000 risk of suicide. The consumer is left to wade through a meaningless list where a drugs list of side effects obscures any possible benefit. It is a case of TMI. I believe that informed consumers can make excellent choices, however the current system simply floods us with garbage, and makes I formed decision making more difficult.

    I think direct to patient advertising of prescription advertising should stop.

  21. 21.

    WereBear

    August 20, 2011 at 9:08 am

    @Wag: The problem with the current regulations requiring disclosure of side effects is there is no sense of perspective.

    I agree with this; there’s also the incredibly fertile field of genetic responses; which seem to have a HUGE influence on side effects; yet even the information we do have does not get out there to influence prescription writing.

  22. 22.

    cathyx

    August 20, 2011 at 9:39 am

    @Dennis SGMM: The drug ads on the history channel are probably because there are more older people watching it than younger people.

    The percentage of Americans that use at least one prescription drug a month has increased from 44 percent to 48 percent. That’s almost half the population,” said the CDC’s Charles Dillon. “A lot of the increase is in older people,” Dillon said. “With aging, people have more health problems. Nine out of ten Americans over age 60 take a prescription drug at least once a month.”

  23. 23.

    Odie Hugh Manatee

    August 20, 2011 at 9:40 am

    They no longer want to make people healthy and help to make their medical problems go away (or at least manage them). Nope, all they want to do is make lots of money and become another problem that sick people and their families have to deal with (on top of their illnesses).

    ‘Medicine’ has sure come a long way, eh?

  24. 24.

    Jennifer

    August 20, 2011 at 9:43 am

    Well, thank heavens US consumers are barred from buying drugs out of Canada that may not be as safe.

  25. 25.

    Odie Hugh Manatee

    August 20, 2011 at 9:43 am

    @Wag:

    I did like that one drug that had two side-effects with potentially dangerous financial implications:

    … may cause Restless Leg Syndrome, … may lead to excessive gambling…

    What a combo! Time to head to the c a s i n o! (FYWP!)

  26. 26.

    Constance

    August 20, 2011 at 9:49 am

    Want to drive your doc crazy? When she suggests a drug, ask, “Is there something I can do or change in my life that would mean I didn’t need to take this drug?” I’m not a fanatic, I take penicillin for strep throat. I take thyroid because I have Hashimoto’s disease so am unable to make my own thyroid.

    Two docs recommended bone-building drugs which have horrific side effects. I reversed my osteoporosis by giving up sugar, grains and legumes. It took a year to see if the experiment worked. My endocrinologist was not enthused–I’ve since fired him. My doctor of osteopathy was enthused as was my doctor of Oriental medicine. It’s often difficult to find docs who welcome patients with the desire to partner in their own health care,

    I wasn’t born an anarchist. For 50 years I did whatever doctors told me I should do. They were all male and had the god complex. I watched my mother taking eight different drugs the last 20 years of her life. She paid for them herself and luckily she could afford to.

    I decided I wasn’t going to live my life dependent on drugs if I could figure out how to avoid that. I can’t afford that many drugs, the unintended consequences terrify me, and I have great genes for which I can take no credit. Life is often a crap shoot and in that respect I was born lucky.

    I agree that ads for drugs should be outlawed but I’m not a libertarian or a Republican. I’m a socialist when it comes to education and health care. I also believe we need to participate in our health care. I suspect that TV makes it more difficult to do that responsibly. As Reagan so capably illustrated, we only have to hear a lie three times to think it’s the truth.

    This is rambling and the caffeine in my tea hasn’t kicked in yet so I can’t fix it (see, I’m not a fanatic) but the free market crap makes me a little crazy. Corporations (oh, sorry, I mean people) are the root of most of the evil we’re talking about. I’m going to stop nattering and get more caffeine

  27. 27.

    Constance

    August 20, 2011 at 9:53 am

    Wow, I hit the big time. My comment is awaiting moderation. Why? Because it’s early in the morning and I’m not very articulate before the caffeine kicks in? I didn’t even use the “F” word.

  28. 28.

    terraformer

    August 20, 2011 at 9:55 am

    Ahh, the drug ads. The narrative that always gets me (in a “what the?” kind of way) is:

    “If you have cancer, lymphoma, cystic fibrosis, Crohn’s disease, or leukemia, make sure your doctor knows this.”

    I mean, WTF? If my doctor doesn’t know that I have any of these things, what the f0ck is the point, you know?

  29. 29.

    Jennifer

    August 20, 2011 at 9:55 am

    Yeah, I can see the thing on the side effects, and I’m in the camp of “they shouldn’t be marketed directly to the public” because, duh, the general public aren’t doctors.

    But really, it’s kind of a natural by-product of the relentless booster-and-hucksterism that’s pretty much typified the Baby Boomers every step of the way. I remember seeing some 20 years ago a guy giving some seminar on TV where he’s on and on about how boomers are “gonna REVOLUTIONIZE aging!” And I remember thinking at the time, “no, you’re still gonna fucking get OLD, you’re just going to look a whole lot more ridiculous doing it.” And I was right to a large degree.

    Don’t get me wrong – being over 60 these days is preferable to being over 60 in the 1960s, without doubt. Old people don’t look as old now, and a lot of them are significantly healthier than they were 50 years ago. But, they’re still over 60. And on that other hand – bad plastic surgery, inappropriate wardrobe choices, and etc. None of that makes anyone younger or healthier – it just allows them to indulge in an illusion that they’re not as old as grandma was at the same age.

  30. 30.

    Constance

    August 20, 2011 at 9:57 am

    I often use the “F” word when discussing corporations, libertarians, republicans, drug companies, and the tea party assholes.

  31. 31.

    Jennifer

    August 20, 2011 at 10:06 am

    But also, what Constance said.

    I’m firmly in the “don’t take a drug unless you absolutely have no alternative” camp.

    Lately my blood pressure has been higher than ideal. The thought of stroke probably terrifies me more than anything else, so I don’t want it to get any higher and want to bring it under control. But I don’t want to be stuck on some drug for the rest of my life. So I went online and did some research, and found out that CoQ10 can lower BP by an average of 18 points. After 3 weeks of taking the CoQ10 supplement, the blood pressure is back down in the ideal range.

    So yeah, people should take responsibility and control over their own health – the point is, 30 second ads for pharmaceutical manufacturers isn’t going to produce that outcome. Nor is it intended to.

  32. 32.

    WereBear

    August 20, 2011 at 10:07 am

    @Constance: Want to drive your doc crazy? When she suggests a drug, ask, “Is there something I can do or change in my life that would mean I didn’t need to take this drug?”

    Marvelous advice. Doctors are so stuck in the mentality that says, “Patients won’t do that” that they forget at least a third are more than willing to do so. Because they WILL get better outcomes.

    Treat the disease, not the symptoms.

  33. 33.

    ppcli

    August 20, 2011 at 10:08 am

    @Jennifer: True. But I’m sure that all the Senators who grandstanded about the allegedly unclear safety of Canadian drugs will be making a fuss about this.

  34. 34.

    Villago Delenda Est

    August 20, 2011 at 10:08 am

    @Dennis SGMM:

    Good point. It’s still disturbing that so much of the new stuff seems to come with debilitating or fatal side effects for what seems to be a modest increase in efficacy.

    Depends on how you define “efficacy”. Is that the actual medical efficacy? Or is it the financial efficacy for the various MBA type executives of the firm?

  35. 35.

    evinfuilt

    August 20, 2011 at 10:10 am

    @21 werebear
    Remember humans as a whole have a very difficult time weighing risks. So even if it said the odds of death from this drug is equal to bitten by a shark in the winter off of cape cod; people would weigh it as likely as the 10% chance at the runs.

    Which is of course why we put our country into mass debt due to terrorism and allow people to die from sickness and no health insurance or poor regulations at meat plants.

  36. 36.

    evinfuilt

    August 20, 2011 at 10:10 am

    @21 werebear
    Remember humans as a whole have a very difficult time weighing risks. So even if it said the odds of death from this drug is equal to bitten by a shark in the winter off of cape cod; people would weigh it as likely as the 10% chance at the runs.

    Which is of course why we put our country into mass debt due to terrorism and allow people to die from sickness and no health insurance or poor regulations at meat plants.

  37. 37.

    cathyx

    August 20, 2011 at 10:17 am

    @WereBear: I know so many people who would rather take a drug for whatever their problem is instead of changing their lifestyle it fix it. That’s why the drug industry is booming.

  38. 38.

    WereBear

    August 20, 2011 at 10:31 am

    @evinfuilt: Remember humans as a whole have a very difficult time weighing risks

    Very true. And studies have shown how “what we want” has a huge influence on our weighing of such risks. Take this boner pill, even though you might go blind and deaf… big signups anyway.

    @cathyx: I know so many people who would rather take a drug for whatever their problem is instead of changing their lifestyle it fix it.

    Oh, absolutely. Sometimes people will tell me about their health troubles; and I’ll suggest something they could do that would FIX IT RIGHT UP. But they will sigh and start explaining why they can’t do that thing and how much they prefer just taking a pill.

    For instance, I went gluten free last winter; and my arthritis, which had been getting worse, is now getting better, and showing signs of vanishing completely. And I didn’t have any digestive complaints; no celiac symptoms. I was simply willing to see if I was one of the many people who don’t have overt problems with wheat; just hidden ones.

    And it turns out, I am.

  39. 39.

    Bill H.

    August 20, 2011 at 10:33 am

    made $2.8 billion last quarter, yearly profit margin a bit over 20%

    In the interest of accuracy, their 10Q for the second quarter of 2011 shows $6.8 billion, and a 16.7% profit margin, but that does invalidate your point. The oil companies that we excoriate so badly all run about 5-7% profit margin, with one or two as high as 10%, so drug companies are a far more deserving target.

  40. 40.

    tkogrumpy

    August 20, 2011 at 11:27 am

    @Stu: No.

  41. 41.

    batgirl

    August 20, 2011 at 11:34 am

    @Constance:

    Want to drive your doc crazy? When she suggests a drug, ask, “Is there something I can do or change in my life that would mean I didn’t need to take this drug?”

    I’ve been on anti-depressants as long as I can remember. I’ve had battles with very serious depression but have felt really great the last year and a half. I decided to have the “maybe I could cut back my drugs” talk with my doctor and see how I do without them or with less of them. The response I got was “depressing” — that people with my history are considered to be life long candidates for medicine, etc.

    I still said I want to at least begin to lower the dose and see how I do. We agreed to wait until the spring and give it a try because my depression is definitely seasonal. But there is no question that I’m going to have to fight my doctor the whole way in trying to get off these drugs.

    By the way, the drug company makes so much money on my medication that they are willing to pay half my copay every month no questions asked.

  42. 42.

    Lojasmo

    August 20, 2011 at 11:35 am

    @WereBear:

    Try going off grains and legumes altogether for a couple of weeks. I think you will be pleasantly surprised. (meat, veggies, dairy, and fruit only)

    As an aside: about six months ago, the alcohol wipes that I have used at every job I have worked at for fifteen years (the ones we use to cleanse the skin prior to starting an IV, to clean vials before injecting or withdrawing meds, etc.) were recalled due to bacterial contamination.

  43. 43.

    Mike G

    August 20, 2011 at 12:01 pm

    “The race to the bottom has led to an increase of products coming from plants in China and India that may have uncertain supply and may have never been inspected,”

    But remember, we can’t allow individuals to import less expensive Canadian pharmaceuticals because of “safety profit concerns”.

  44. 44.

    OzoneR

    August 20, 2011 at 12:05 pm

    @Dennis SGMM:

    Most of these new products seem to be offering incremental improvements over the old ones at the cost of some fairly horrific side effects. This is progress?

    Isn’t this how Americans solve all problems?

  45. 45.

    OzoneR

    August 20, 2011 at 12:07 pm

    @Constance:

    I agree that ads for drugs should be outlawed but I’m not a libertarian or a Republican.

    I’m not sure a libertarian would support that.

  46. 46.

    Bill Murray

    August 20, 2011 at 12:41 pm

    @Jennifer: you do realize CoQ10 is a drug, it just isn’t regulated in the same way as non-dietary supplement drugs. In particular “dietary supplements” the manufacturer is responsible for ensuring the safety of the product. Further, the manufacturer does not have to show any proof of safety or other claims — “except for rules described above that govern “new dietary ingredients,” there is no provision under any law or regulation that FDA enforces that requires a firm to disclose to FDA or consumers the information they have about the safety or purported benefits of their dietary supplement products.”

    http://www.fda.gov/Food/DietarySupplements/ConsumerInformation/ucm110417.htm#what

    eta: I added non-dietary supplement drugs on edit as I forgot it on first posting

  47. 47.

    Bill Murray

    August 20, 2011 at 12:45 pm

    @OzoneR: these ads used to be banned. In any case much advertising aims to subvert the underlying principles of free markets, so libertarians shouldn’t really favor it.

  48. 48.

    Jennifer

    August 20, 2011 at 1:21 pm

    @Bill Murray: It’s not a drug in the sense of being a man-made compound you wouldn’t normally find in the body. Our cells produce it but produce less of it as we age. Granted it may not be produced under conditions any safer, or even as safe, as prescription drugs, but it’s still not a “drug” in the way I would define it, any more than a vitamin or mineral supplement is.

  49. 49.

    Mart

    August 20, 2011 at 4:01 pm

    At the local Home Depot during the 2010 NCAA BB tourny a worker in his fifties comes up to assist. He mentions that his Alma mater was still in it, to which I responded, wow an Ivy League school. He said yea, working at the Home Depot with a Masters from Cornell in pharmaceutical production does not make a lot of sense, but if he wants a job in the industry he would need to learn Cantonese.

  50. 50.

    Constance

    August 20, 2011 at 5:38 pm

    @OzoneR:

    Good gawd. What the hell was I trying to say there? You are absolutely right. Will you accept the excuse that the caffeine hadn’t kicked in at that point.

  51. 51.

    Sm*t Cl*de

    August 20, 2011 at 7:39 pm

    It’s not a drug in the sense of being a man-made compound you wouldn’t normally find in the body.

    Insulin & thyroxine are still drugs.

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