National Health System (2 Viewers)

[volition]

I would have imagined that pharmaceutical companies are incredibly coveruppy about their business and hence wouldn't divulge too many corparate secrets, leading this 'consumer justice' (as I'll dub it) to be kinda random and moot. I mean, I could be wrong there.

Well the point of the stuff above was just to show you how the govt is inefficient.

Now what does 'coveruppy' ness have to do with businesses not being efficient? Not really sure what you're talking about. Although I will just say that in order to get funding, companies generally do need to disclose at least some information in order to win either equity or debt funding.

Any intelligent and moral organisation is going to put their money into all areas of research - I don't see why they'd do it any other way. Private firms on the other hand, as you've said, are concerned with the $$$ so they might, say, take their precious, precious cash and invest it all into cold & flu tablets because they make the most money, but won't nessecarily save the most lives.

The "thing that will make the most money" is actually determined by the consumer preferences, reflected by their demand for it. So if companies don't invest in certain types of drug, that just means the consumer demand just isn't there for it (or that the FDA-type agencies/regulations are making it too costly to invest in that type of drug).

It's up to businesses to conduct research and just generally find this out. But once again i think distributed info helps here too(people may invest more in an AIDS drug company than some other one). Anyway, I'm sure you see businesses conducting research into what people want, so they know what to focus their R+D on.

By 'chasing the money' in this way, at least they are "barking up the right tree" so to speak. Unlike the govt which doesn't use distributed information and doesn't prefer what people want more, higher on its list(at least not to the same extent or accuracy that private companies will).

And hey hey, there's one of my biggest problems with the whole idea of privatisation.

Well, if that was what the consumers wanted, it would be reflected in their demands/prices as I've just been explaining. Tough spot for you here, cos its hard for you to argue that you know their preferences better than they do.

 

[KFunk]

Increasing regulation also means that there's less freedom to run your businesses in health care, and the only way we find newer faster ways to do things is by having that freedom. Capitalism allows the people to produce at the rate of the "brightest minds" by allowing them to "invent the wheel and us to use it". Part of the problem with regulation is that it makes it harder for them to be innovative like that. So we're stuck at the level of the slowest producer.

A semi-related rant on allowing drug companies more freedom: Allowing the market to drive drug development leads to a lot of problems. Certainly, R&D follows demand, but that demand isn't quantified in terms of 'heads' - individual voices and demands - so much as the dollars behind the individuals (representation in accordance with wealth, it would seem). We have the intellectual tools required to develop medications (and other medical innovations) which could alleviate a lot of the major diseases in the developing world. However, the fact that the developing world is unable to pay top dollar for such pharmaceuticals means that such projects aren't considered 'feasible' by your average drug company. Many diseases are, by nature, diseases of the poor - preying on poor sanitation, crowded living conditions, lack of education, etc... (think tuberculosis, hep viruses, HIV... infectious/tropical diseases in general).

Sure, arguments will me made to the tune of - 'private charities will fund these efforts, and ensure that such projects are undertaken', and I should note the $500 million dollar donation made to the Global Fund by the Gates Foundation as a truly beautiful example of this. However, we still turn up short for cash. The optimist within me would like to believe that human nature is good enough to allow such a utopian vision to come to fruition (that through the goodness of our hearts we could freely, in the fullest sense of the word, unite to fight/eradicate disease and social burdens) but our historical track record does little to engender such confidence in me.

 

[KFunk]

The "thing that will make the most money" is actually determined by the consumer preferences, reflected by their demand for it. So if companies don't invest in certain types of drug, that just means the consumer demand just isn't there for it (or that the FDA-type agencies/regulations are making it too costly to invest in that type of drug).

By 'chasing the money' in this way, at least they are "barking up the right tree" so to speak. Unlike the govt which doesn't use distributed information and doesn't prefer what people want more, higher on its list(at least not to the same extent or accuracy that private companies will).

As above, yes, by 'chasing the money' they are barking up one of the right trees. However, other trees which fail to wave money around as their boughs sway in the wind get ignored. It's not a simple matter of a lack of R&D reflecting a lack of demand - it may merely reflect a lack of money in that area as a result of a disease process which tends to affect a less affluent demographic.

 

[Nebuchanezzar]

Now what does 'coveruppy' ness have to do with businesses not being efficient? Not really sure what you're talking about. Although I will just say that in order to get funding, companies generally do need to disclose at least some information in order to win either equity or debt funding.

Corparation doesn't tell public what they're doing => investment is blind.

The "thing that will make the most money" is actually determined by the consumer preferences, reflected by their demand for it. So if companies don't invest in certain types of drug, that just means the consumer demand just isn't there for it (or that the FDA-type agencies/regulations are making it too costly to invest in that type of drug).

Yeah, and that was my point. Cold & flu tablets, while producing the most cash, isn't exactly about saving lives. Demand driving production doesn't exactly work terribly well for the world pf pharmaceuticals where production of drugs for the minority is quite important.

 

[KFunk]

It's up to businesses to conduct research and just generally find this out. But once again i think distributed info helps here too(people may invest more in an AIDS drug company than some other one). Anyway, I'm sure you see businesses conducting research into what people want, so they know what to focus their R+D on.

Your mention of investment into HIV/AIDS brings to mind another issue associated with charity. If private donations are to be seriously considered as a supplement/replacement for funds gained from public taxation then it is worth noting an issue which arises.

People are generally moved to donate by emotion rather than reason. I recall being told about some studies (I wish I had them at hand to attach to this post, sorry about the word of mouth factor!) where they got people to respond to different advertisements which sought donations for a medical aid group. Typically people responded more (with larger/more donations and so forth) to images of a single destitute child than they did to statistical statements which more accurately portray the situation. In other words - you could have one disease, Disease A, which affects mainly those in their late teens and has a very high mortality rate, and another, Disease B, which mainly affects primary aged kids, has a moderate mortality rate and causes them to vomit blood. By virtue of its graphic nature and its tendency to affect younger children, disease B is more likely (at least according to studies I have been exposed to) to recieve funding - despite disease A's being more harmful.

Following this train of thought you also get into the issue of 'celebrity diseases'... it's much easier to find a UN goodwill ambassador for HIV/AIDS than for sanitation or faecally transmitted diseases. How many diseases/causes out there are underfunded for lack of a marketable image??

 

[HotShot]

Perhaps it comes in at a later point in my education but thus far I haven't encountered this.

I think it is implied, they surely would have taught as a doctor your limitations? Or Perhaps this is through through your internship programme?

Either case, even if its not taught at univerisity, the system is designed to encourage it?

 

[volition]

Certainly, R&D follows demand, but that demand isn't quantified in terms of 'heads' - individual voices and demands - so much as the dollars behind the individuals (representation in accordance with wealth, it would seem).

Yep, representation based on wealth, but don't forget that the "winners" from the stock market are effectively encouraged to keep investing and this is a good thing because them making money represents them having information that is of value to society. The "say" they get is increased to represent their better knowledge. On the other hand the "losers" from the stock market now have a reduced say in things, having less money to influence things. Consistent poor decision making will result in disciplining by the market (losing money).

This demand quantified in terms of money actually makes our markets more efficient.

We have the intellectual tools required to develop medications (and other medical innovations) which could alleviate a lot of the major diseases
in the developing world. However, the fact that the developing world is unable to pay top dollar for such pharmaceuticals means that such projects aren't considered 'feasible' by your average drug company. Many diseases are, by nature, diseases of the poor - preying on poor sanitation, crowded living conditions, lack of education, etc... (think tuberculosis, hep viruses, HIV... infectious/tropical diseases in general).

If this is an argument for govt intervention in the area, then I've got something to present against that idea.

Take for example the way that the Thailand govt went down that path of abolishing intellectual property rights.

"Ideology is a health risk" by John Roskam in the Australian Financial Review, July 27, 2007.

The argument is that the only way expensive medicines can get to the world's poor is if governments compulsorily acquire the patents for those medicines. The medicines can then be produced more cheaply by governments. Such proposals are not hypothetical. Earlier this year the military junta government of Thailand did exactly that in relation to a number of AIDS and heart disease drugs.

The claim that saving lives is more important than the intellectual property rights of multinational companies is emotive, but it's wrong. Many AIDS medicines certainly are expensive, and in poor countries they are beyond the reach of the majority of the population. But while compulsory acquisition of patents will drive down
drug prices in the short term, in the long term the effects would be disastrous. When governments collectivise or nationalise private property they seldom
bother to ask the obvious question. What happens next? If individuals and companies can't make a profit on an activity they won't undertake it.

Compulsory acquisition of pharmaceutical patent rights is only shooting ourselves in the foot for later on. This is especially true given that the govt is relatively ineffective at developing medicines itself, and we're actually quite reliant upon private companies to do this for us.

As for your other criticisms:

As above, yes, by 'chasing the money' they are barking up one of the right trees. However, other trees which fail to wave money around as their boughs sway in the wind get ignored. It's not a simple matter of a lack of R&D reflecting a lack of demand - it may merely reflect a lack of money in that area as a result of a disease process which tends to affect a less affluent demographic.

Following this train of thought you also get into the issue of 'celebrity diseases'... it's much easier to find a UN goodwill ambassador for HIV/AIDS than for sanitation or faecally transmitted diseases. How many diseases/causes out there are underfunded for lack of a marketable image??

Well in the specific case of sanitation type diseases, I would argue that capitalism generally brings better quality of life+sanitation anyway.

As for your more general criticism of 'selling the charity supporting that disease', well... if the market doesn't give enough money to that given charity, then how is the government ever going to do it?

All the govt is, is people voting on what they want. If those same people don't know which charity needs the money more (as you're saying), then I struggle to see how a govt is going to improve on this situation. How will the people know which one to vote for? The charity in question would remain unsupported in both cases won't it?

Corparation doesn't tell public what they're doing => investment is blind.

Ok well I've already answered this then. Firms generally must give information out in order to sell their idea and get funding. Think venture capital for example, or stock flotation.

Yeah, and that was my point. Cold & flu tablets, while producing the most cash, isn't exactly about saving lives. Demand driving production doesn't exactly work terribly well for the world of pharmaceuticals where production of drugs for the minority is quite important.

As I said above, it's a tough spot for you basically because you're trying to argue that you know what people want better than they do. It would appear to me that you're saying that their stated preferences (via what they've voluntarily supported with their money) aren't what they really want?

Or is it that you're saying they don't know what they want/don't know what's best for themselves? In which case the govt is not going to do any better, since its policies are just the result of their vote anyway.

I think that it's not really fair to compare free markets to utopia, given we only have the choice between free markets or govts. A criticism of the free market can only really be work as an argument for govts, if the govt would fix this problem.

 

[volition]

I think it is implied, they surely would have taught as a doctor your limitations? Or Perhaps this is through through your internship programme?

Either case, even if its not taught at univerisity, the system is designed to encourage it?

Here's an example of how the US system encourages this "watch your back" behaviour by failing to allow the market and the doctors to do their jobs.

OH, BABY: N.Y. OB/GYN CRISIS By JULIA DAHL in NY Post

September 24, 2007 -- It was one of the saddest decisions of his life.

Tamer Seckin, who had spent 20 years working as an obstetrician-gynecologist in Brooklyn, was faced with the prospect of a 14 percent hike in his malpractice-insurance rate, so he decided four months ago to stop delivering high-risk babies.

"Just today, I had to tell a woman I'd been treating for years that when she goes into the delivery room, I won't be there," said Seckin, who is the chief of gynecology at Kingsbrook Jewish Medical Center.

"This is what I'm trained for, but I can't afford to do it anymore."

And he's not alone.

The American College of Obstetricians and Gynecologists and the Medical Society of the State of New York both say that, with malpractice-insurance premiums rising, the dwindling number of OB/GYNs who can afford to practice has become a crisis, particularly for risky patients such as older women or those with medical conditions.

The reason for this is the way that the insurance market is regulated. When the govt typically regulates the insurance markets, it tries to mandate certain conditions as though they necessarily apply to all people, even if those people are young 18 year olds who don't need insurance on something. Then there's the standard red tape that burns up money in compliance too. So insurance companies typically end up charging exorbitant premiums because of regulatory burden and you get charming outcomes like the one above.

Oh yeah, and here's an article about private charity and volunteering.
It's a bit rich calling us selfish by Peter Hartcher September 28, 2007 SMH

The most comprehensive survey of overall Australian giving found that, from 1997 to the end of 2004, individuals increased their total donations to non-profit organisations by 88 per cent, or an annual average increase of 12.5 per cent. Giving for victims of the Asian tsunami is explicitly excluded - no one can claim that any extraordinary one-offs somehow distorted the picture. Want to take out the effects of inflation? After adjusting for inflation, growth was 58 per cent, an annual average of 8.3 per cent. Note that this does not just represent a passive "ride" on a growing economy or rising incomes. The growth in individual giving was more than twice the speed of GDP growth and more than double the rate of the average increase in personal incomes.

A quick snipe at Melbourne ;-)

Incidentally, the numbers don't support the common assertion that Melburnians (average donation $485) are more generous than Sydneysiders ($524).

Don't forget this is under a system where supposedly the govt is "taking care of things", AND we're getting taxed pretty highly(especially businesses). Imagine what it'd be like if people knew that they couldn't just rely on the govt to do a job (even if the govt currently fails), and if they actually had more in their pocket from not getting taxed so highly.

 

[KFunk]

Yep, representation based on wealth, but don't forget that the "winners" from the stock market are effectively encouraged to keep investing and this is a good thing because them making money represents them having information that is of value to society. The "say" they get is increased to represent their better knowledge. On the other hand the "losers" from the stock market now have a reduced say in things, having less money to influence things. Consistent poor decision making will result in disciplining by the market (losing money).

This demand quantified in terms of money actually makes our markets more efficient.

But if we are working towards a certain set of 'ends' should efficiency be ranked number one? One what grounds?

I should point out that a society could be very efficient at producing a product which is at once enjoyable, and hence subject to high demand, and harmful. A good example would be cigarettes. Suitable marketting and pleasureable features can even make a significantly harmful product appealing. Efficiency doesn't ensure wise or ethical decision making (controversial features of these notions aside), making me wonder why you hold it in such high regard.

Compulsory acquisition of pharmaceutical patent rights is only shooting ourselves in the foot for later on. This is especially true given that the govt is relatively ineffective at developing medicines itself, and we're actually quite reliant upon private companies to do this for us.

I'm not suggesting that drug R&D be moved out of the private sector. However, I am advocating some degree of external restriction (e.g. on prices) and direction (e.g. with regard to areas of research). That article you referenced ('Ideology is a Health Risk') puts forward the common claim that to bypass intellectual property rights (i.e. the very rights which allow drug companies to fix prices without having to worry about competitors undercutting them) is to reduce drug company products, limit risk taking and innovation - leading, it is claimed, to a relative reduction in population health in response to the waning drug companies.

A few things should be noted in response to these claims:

- Drug companies make astronomical profits and, despite the high (and frequently cited!) R&D costs, are not at risk of loosing 'motivation'. According to Fortune 1999 (old figures, I apologise), the pharmeceutical industry saw, on average, an 18.6% return on their revenues. Compare this to commercial banking at 15.8% and other industries ranging from 0.5-12.1%. The pharmaceutical industry, at least in 1999, stands towards the top of the pack (at the very top, in fact, in 1999) in terms of profits. If commerical banks and other less profitable companies can find motivation in their respective levels of profit then mightn't the pharmaceutical industry also find such motivation??

- Furthermore, drug companies are quick to remind us that 'for every drug that makes it to market there are many more, similarly costly ones, that do not'. Their pricing and patenting rights are then required, and hence justified they hold, due to the high risk nature of their investments. This reasoning holds sound for small companies which are relying on a handful of drug candidates to bear fruit. Large companies, however, have so many drugs 'on the back burner' at any given time that they can reasonably expect to consitently produce marketable products. In other words, the R&D ventures of large drug companies are not as risky as they would have us believe.

- One final point (I apologise for the length of this post): intellectual property rights are often claimed to protect and motivate innovation, in such a way that they foster and create motivation for research, leading to more/better products. However, as current systems often reward fairly B.S. drug alterations which, to my mind at least, hardly qualify as design innovations. Before patents run out companies will regularly add a new chemical group (or similar) to a previously successful compound and re-release it with a brand-spankin'-new patent on it. In doing so companies exploit loop holes, preventing affordable, generic products form making onto the market. Another good trick is where you have two successful drugs (with complementary effects), each of which is owned by a different company and each of which has a patent which is close to expiry. If suitable, the companies may decide to make a new 'combined' drug, which combines the two, for which they can obtain a new patent, thus maintaining market monopoly and sharing the profits with one another. What if, for a given disease, it would be more appropriate to give only one of the drugs rather than the combination? This drug company tactic can hence prevent more efficient (familiar word?) treatment regimes.

In closing: a lot of bullshit, to my mind, goes down in drug company dealings.

 

[KFunk]

As for your more general criticism of 'selling the charity supporting that disease', well... if the market doesn't give enough money to that given charity, then how is the government ever going to do it?

All the govt is, is people voting on what they want. If those same people don't know which charity needs the money more (as you're saying), then I struggle to see how a govt is going to improve on this situation. How will the people know which one to vote for? The charity in question would remain unsupported in both cases won't it?

Realistically people don't get to vote for specific health policies (as far as I am aware??). At best we get to vote for a given party's broad approach to healthcare, but even then we are balancing our healthcare preferences with those in other spheres. What can the government do with tax payers money? They can fund programs endorsed by experts who are well aquainted with the relevant data and who can better assess the benefit to be gained by the population in question. I would be interested, however, to see if there are any quantitative studies which exam which approach tends to work 'better' (under a suitable definition of 'better').

 

[volition]

But if we are working towards a certain set of 'ends' should efficiency be ranked number one? One what grounds?

The stock market/other capitalist devices like price mechanism gets us towards knowing what the consumers want. Ultimately that's what the 'end' is I guess.

I should point out that a society could be very efficient at producing a product which is at once enjoyable, and hence subject to high demand, and harmful. A good example would be cigarettes. Suitable marketting and pleasureable features can even make a significantly harmful product appealing. Efficiency doesn't ensure wise or ethical decision making (controversial features of these notions aside), making me wonder why you hold it in such high regard.

Yes, there will be times where people choose something that is harmful to themselves, but who are we to really say what they want to do with their own body/life? In the end, they are the sole owners of their own bodies, I don't feel it is the place of society/govt to start enforcing its opinions on drug use (via violence I might add). If thats what they want, well... thats what they want.

I'm not suggesting that drug R&D be moved out of the private sector. However, I am advocating some degree of external restriction (e.g. on prices) and direction (e.g. with regard to areas of research).

What kind of restrictions are you talking about? How would they be enforced? To what extent does the private sector need direction?

Drug companies make astronomical profits and, despite the high (and frequently cited!) R&D costs, are not at risk of loosing 'motivation'.... If commerical banks and other less profitable companies can find motivation in their respective levels of profit then mightn't the pharmaceutical industry also find such motivation??

Well first of all we're talking in a marginal sense here (as opposed to an "are they motivated? yes or no" kind of thinking). If the govt regulates, then companies will be less inclined to do research. So by not regulating we might have achieved more.

Secondly, the orthodox approach to economics suggests that other competitors would come into the market and compete away the high gains being experienced. One thing I would suggest as a possible reason this may not be happening, is the high costs imposed by regulation is serving to entrench the current players in their position. So basically I'm suggesting that the regulatory burden is functioning as an entry barrier for new firms.

Furthermore, drug companies are quick to remind us that 'for every drug that makes it to market there are many more, similarly costly ones, that do not'. Their pricing and patenting rights are then required, and hence justified they hold, due to the high risk nature of their investments. This reasoning holds sound for small companies which are relying on a handful of drug candidates to bear fruit. Large companies, however, have so many drugs 'on the back burner' at any given time that they can reasonably expect to consistently produce marketable products. In other words, the R&D ventures of large drug companies are not as risky as they would have us believe.

One final point (I apologise for the length of this post): intellectual property rights are often claimed to protect and motivate innovation, in such a way that they foster and create motivation for research, leading to more/better products.

Ok before I can answer these I'm going to have to read a bit more about patents, you've actually exposed something I don't really know much about. I'll get back to you later on this stuff, as well as the stuff about healthcare experts deciding stuff (essentially the argument for public science).

 

[KFunk]

The stock market/other capitalist devices like price mechanism gets us towards knowing what the consumers want. Ultimately that's what the 'end' is I guess.

Yes, there will be times where people choose something that is harmful to themselves, but who are we to really say what they want to do with their own body/life? In the end, they are the sole owners of their own bodies, I don't feel it is the place of society/govt to start enforcing its opinions on drug use (via violence I might add). If thats what they want, well... thats what they want.

Hey, I'll try and come back and adress some of your other points later on this evening. As to the above, I would argue that things like cigarettes show that it isn't as simple as 'capitalist devices get us towards knowing what the consumers want'. Those involved in marketing are very good at constructing wants and often walk a fine line between truth and misinformation. An individual, for example, may hold the two desires (one positive and one negative, in this case):

1. I want a pleasurable social drug
2. I do not want lung cancer

Historically those marketing cigarettes chose only to adress their advertising to the first desire (as you would being a good, though morally questionable, marketer - ignoring, of course, periods where evidence for the link was absent). In other words, there is a tendency for the market to exploit some desires at the expense of other, through the selective presentation of images and information.

Of course, it is only in more serious cases, like that of cigarettes, that I support government campaigns aimed at informing the public and intergering with product consumption. In some cases, e.g. thalidomide, I think it is reasonable for an entire product to be taken off of the market. Essentially what I have tried to show is that one of the things that the unregulated market is good at is selling things which would not be considered in an individuals best interests, by that individual, were the individual to know all the reasonably available information about the products. Thus I wonder whether efficiency is such a worthy end, given that part of what stock market/capitalist mechanisms are efficient at is spreading misinformation and selling harmful products.

 

[katie_tully]

Management inside the hospitals is pretty appalling. *touches nose, wink wink*

 

[_dhj_]

Hey, I'll try and come back and adress some of your other points later on this evening. As to the above, I would argue that things like cigarettes show that it isn't as simple as 'capitalist devices get us towards knowing what the consumers want'. Those involved in marketing are very good at constructing wants and often walk a fine line between truth and misinformation. An individual, for example, may hold the two desires (one positive and one negative, in this case):

1. I want a pleasurable social drug
2. I do not want lung cancer

Historically those marketing cigarettes chose only to adress their advertising to the first desire (as you would being a good, though morally questionable, marketer - ignoring, of course, periods where evidence for the link was absent). In other words, there is a tendency for the market to exploit some desires at the expense of other, through the selective presentation of images and information.

Of course, it is only in more serious cases, like that of cigarettes, that I support government campaigns aimed at informing the public and intergering with product consumption. In some cases, e.g. thalidomide, I think it is reasonable for an entire product to be taken off of the market. Essentially what I have tried to show is that one of the things that the unregulated market is good at is selling things which would not be considered in an individuals best interests, by that individual, were the individual to know all the reasonably available information about the products. Thus I wonder whether efficiency is such a worthy end, given that part of what stock market/capitalist mechanisms are efficient at is spreading misinformation and selling harmful products.

Hi KFunk, I think you've raised many insightful points in this thread, particularly in relation to the incentives and operations of the pharmaceutical industry.

The main difference between government actions and tobacco industry actions concerns the outcomes that they respectively attempt to achieve, not the particularly means by which they desire consumers to form preferences. It is not really a question about the amount of 'information' available to the consumer. The tobacco industry's main concern is to maximise industry profits. On the other hand, the government's main concern (although it does have ulterior, such as political concerns) is to act in the best interests of society, not only to curb damage to the individual's health in the long run, but also to decrease crime, poverty, disorder, increase productivity, family bonds etc. in society. It doesn't try to present a 'balanced' view. You won't get many government ads showing intellectuals engaged in philosophical conversation while smoking. Both the tobacco industry and the government attempt to influence consumption outcomes. Only in rare cases, as you mentioned, will the government ban a certain product. In the majority of cases the means by which governments and the tobacco industry influence outcomes are analogous. The difference is that the government's objectives correlate more closely with the individual consumer's objectives, and therefore its actions hold greater justification.

 

[KFunk]

Aye, fair call dhj. I geuss I was tacitly assuming the difference in objectives between a government and private companies such as found in the tobacco industry. (edit: thanks for pointing that out)

 

[KFunk]

What kind of restrictions are you talking about? How would they be enforced? To what extent does the private sector need direction?

Well first of all we're talking in a marginal sense here (as opposed to an "are they motivated? yes or no" kind of thinking). If the govt regulates, then companies will be less inclined to do research. So by not regulating we might have achieved more.

Secondly, the orthodox approach to economics suggests that other competitors would come into the market and compete away the high gains being experienced. One thing I would suggest as a possible reason this may not be happening, is the high costs imposed by regulation is serving to entrench the current players in their position. So basically I'm suggesting that the regulatory burden is functioning as an entry barrier for new firms.

An example restriction would be to limit the price of pharmaceuticals in relation to their production cost - where the relation is guaged in such a way that it ensures a financial gain for the company.

You say that "by not regulating we might have achieved more". It is worth asking what you mean by 'achieved'. If you simply mean, drug companies may not have developed as many products then I conceed your point. However, the important question, to my mind, is whether population health is betterred, through increased affordability and hence accessibility of drugs, or worsened by such regulation. Clearly we are having to choose between these options in accordance with values/ends. The health of the population seems, to me, to be a more important end than that of production of more new drugs. Of course, I do not claim that it is clear that regulation while lead to better health (even though I am inclined to believe so), but I do think you should be careful with talk of 'achievement'.

On your second point: the regulations could perhaps be relaxed for entry level firms provided doing so would benefit net health (as well as agreeing with our other values).

 

[volition]

At best we get to vote for a given party's broad approach to healthcare, but even then we are balancing our healthcare preferences with those in other spheres.

Yet another problem with our system. Our vote is balanced across every single sphere of an ever-expanding government.

With the patents thing: I think this is worthy of a thread of its own, all about intellectual property and patents granting monopoly rights. I might start it up sometime soon.

What can the government do with tax payers money? They can fund programs endorsed by experts who are well aquainted with the relevant data and who can better assess the benefit to be gained by the population in question. I would be interested, however, to see if there are any quantitative studies which exam which approach tends to work 'better' (under a suitable definition of 'better').

Ok, so this is essentially the argument for public science, public science is crap because:

• Governments are poor at picking winners, when compared to private companies - although I do somewhat accept that from what you're saying, there will be times where you want the govt to undertake unprofitable exercises for the claimed 'social good'. But I'll at least let you know that they are often undertaking projects that end up never being completed or commercialised. They aren't very responsive to change, take for example the space shuttle program where unwillingness to change the program once it has become economically infeasible means that money gets thrown away. "The technology pork barrel" by Cohen, Linda R; Noll, Roger G Washington, D.C.: Brookings Institution, 1991
  
• Returns to public science are low - which suggests the economy/people are better off putting that money elsewhere - like using it to get better education or whatever
  
• It's basically impossible to show where things went better because of the govt (economically better, because I don't really know how we measure it). It becomes an exercise in blackboard economics, where with full knowledge of ever shifting demand and supply curves (nobody can actually know what these truly are), we try to move things around and find an optimal point. But this doesn't work in reality, because without a price mechanism to actually tell us what is worth what, things will fall apart. If prices were set below their "true" levels, then not enough resources would go into its production. These resources would flow into other goods and services that consumers considered inferior to the products made possible by additional drugs/public science. On the other hand, if prices were arbitrarily set too high, then resources would be wasted in the production of too many drugs, where "too many" is defined relative to consumer preferences.

Those involved in marketing are very good at constructing wants and often walk a fine line between truth and misinformation. An individual, for example, may hold the two desires (one positive and one negative, in this case):

Yeah ok, the individual may hold two desires, but it's up to them to weigh it up and decide isn't it? If they feel they don't have enough information to decide, then they can pay somebody to find out more info (eg. read consumer choice - style magazines or do their own research).

If the govt was going to start stopping us from taking any potentially negative action, then does that mean it should also stop us in other areas of life? Should they stop us from taking out a loan it thinks we can't repay? Should skydiving be outlawed? Should it stop us from eating Maccas altogether? Should it make us only cross at the lights? Should it make us not drive? (driving is more dangerous than not) All these things are examples of where the individual is making a decision about what they want to do. I don't feel it is the place for the govt to intervene (by force).

An example restriction would be to limit the price of pharmaceuticals in relation to their production cost - where the relation is guaged in such a way that it ensures a financial gain for the company.

haha, so how would you determine what a 'fair' financial gain for the company is?

This is not a good idea:
First of all, you're advocating price controls, there's no way the govt knows what a 'fair price' is. In fact, there is no such thing as a 'fair price'. Consumers will argue that any price above 0 is unfair, and businesses will argue that any price is too low. The only thing we have is the price set by the market (the price they end up paying), any deviation from this is costing us somewhere else.

Secondly, all a price control set below what it would have otherwise been does, is reduce the amount supplied. It means consumers have to now wait longer to get it. Or not get it at all.

Why do you think a price control is necessary here but not in other places? What reason do you have for not extending this price control to the entire economy? Just curious

On your second point: the regulations could perhaps be relaxed for entry level firms provided doing so would benefit net health (as well as agreeing with our other values).

First of all this is hugely arbitrary, and seems a bit unfair to me that not all businesses are subject to the same requirements.

Secondly, you're basically saying that this regulation is unnecessary in the first place! If you're willing to 'relax your stringent requirements' for a product purely because it is made by a new, small firm, then doesn't that kind of suggest that these requirements aren't needed at all? It just seems a little inconsistent to me thats all...

Clearly we are having to choose between these options in accordance with values/ends. The health of the population seems, to me, to be a more important end than that of production of more new drugs.

I don't see how the health of the population is served by distorting the economy and slowing healthcare developments. R+D money is getting eaten up in regulations that are unnecessary for the most part. Free markets are what will help us more in the long run.

But anyway, I'm really getting over the argument from efficiency, people just shrug it away anyway. Most people these days do understand govt economically is not as efficient. They just accept it (no matter the cost to our quality of lives) because they feel its moral. I don't believe that state violence is moral/justified. Its just too bad people don't feel the same way.