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Bad Medicine

Offended at the prospect of drug companies trying to sneak in some last minute profit ahead of sweeping legislation designed to choke such impulses forever into submission, Congressional Democrats have taken up their pitchforks:
(emphasis mine)

WASHINGTON (Reuters) - Congressional Democrats are seeking government investigations into recent price increases of brand-name prescription drugs, as Congress finalizes an overhaul of the healthcare system.

Lawmakers are concerned the companies are trying to reap gains ahead of reforms aimed at lowering drug prices and forcing drugmakers to partly fund changes that aim to boost the number of Americans covered by health insurance.

[ . . . ]

Drugmakers "may be artificially raising prices for certain pharmaceutical products in expectation of new reforms," wrote Charles Rangel and Henry Waxman, the respective chairmen of the House Ways and Means Committee and the House Energy and Commerce Committee.

"Any price gouging is unacceptable, but anticipatory price gouging is especially offensive," their letter said.

Well imagine that. Drug companies trying to "reap gains" by "artificially raising prices". What's not clear is how Congressional Democrats expect drug companies to continue the R&D necessary to bring new life-saving drugs to market if they're to do so without "reaping gains" on popular drugs already on the market. Do they expect that these drugs will fall from the sky? Profits are what businesses depend upon to fuel development of new products. Without profits, businesses fail, and failing drug companies should be low on anybody's wish list---even economic know-nothings like "Congressional Democrats".

And what's this about "artificially raising prices"? There's a market for drugs, isn't there? And drug companies sell drugs, don't they? There's nothing "artificial" about their setting prices for their product based on the public's demand for it. It's actually quite organic. You want "artificial"? Let the government set prices based on things OTHER than the supply of that product and the public's demand for it. See where that gets you.

As for price "gouging", what better way to guarantee the efficient allocation of scarce resources than to permit their prices to rise to meet the demands of the market? During a gas shortage, more people will be permitted to purchase more gallons (and encouraged also to conserve) if the prices for those gallons go up with demand. If that gas instead is "artificially" required to remain cheap during a shortage, it will be wasted as the first few people would simply fill their tanks with more than they needed while leaving the rest high and dry. Let prices rise, and people will buy less at a time, leaving more for everyone to use more efficiently. Genius.

Drug companies need profits to make new drugs and to make current drugs better. The "reforms" that Congressional Democrats have in mind (price fixing, taxation, etc.) will reduce those profits, raise prices on patients and result in us all having diminished access to life saving drugs.

This is not reform. This is suicide.


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Comments (26)

"And what's this about ... (Below threshold)
Marc:

"And what's this about "artificially raising prices"? There's a market for drugs, isn't there? And drug companies sell drugs, don't they?"

True, but you might want to check a story Greta aired a couple days ago.

Seems some companies have jumped prices by 9 percent or more and all the increases have come after the bills was passed controlling their prices and goes into effect in Feb. [I think Feb]

Since basic economics dicta... (Below threshold)

Since basic economics dictate that sellers can't charge more than people are willing to pay, the allegation also presumes that pharmaceutical companies have been holding DOWN the price below where they would normally be and thus sacrificing profits. and why would greedy pharmaceutical companies be doing that?

Anything artificial about t... (Below threshold)
Al:

Anything artificial about the jumps derive from the government's artificial implementation of price controls. The drug companies are still only responding to market demand. I assume these drugs are still being sold even after the increase? They wouldn't if the prices didn't reflect the demand. If only the government would just get the hell out of the way and let the markets determine prices based on demand.

And what's this ab... (Below threshold)
Steve Green:
And what's this about "artificially raising prices"? There's a market for drugs, isn't there? And drug companies sell drugs, don't they? There's nothing "artificial" about their setting prices for their product based on the public's demand for it.

That's not the complaint. The complaint is that drug companies, knowing that if health reform passes they will be forced to lower prices, are raising prices now artificially - without an increase in demand - in anticipation of having to lower them later.

Remind me to not take you with me the next time I buy a car.

As for price "gouging", what better way to guarantee the efficient allocation of scarce resources than to permit their prices to rise to meet the demands of the market?

1. - who says they are scarce?

2. - Drugs aren't a resource, they are a manufactureed product. There isn't a finite quantity. As volume increases, prices decrease.

During a gas shortage, more people will be permitted to purchase more gallons (and encouraged also to conserve) if the prices for those gallons go up with demand. If that gas instead is "artificially" required to remain cheap during a shortage, it will be wasted as the first few people would simply fill their tanks with more than they needed while leaving the rest high and dry.

That's a silly, stupid analogy. I'm sorry, but it is. I'm good at bad analogies, I know one when I see one.

Drug companies need profits to make new drugs and to make current drugs better. The "reforms" that Congressional Democrats have in mind (price fixing, taxation, etc.) will reduce those profits, raise prices on patients and result in us all having diminished access to life saving drugs.

As more people get health insurance, more drugs will be sold. Prices will be lower, but the volume will increase.

This is not reform. This is suicide.

Garbage in, garbage out. I can understand why you may feel suicidal, but trust me - it's just because you don't understand what you're talking about.

I have no doubt that drug a... (Below threshold)
GarandFan:

I have no doubt that drug and insurance companies are raising prices in anticipation of the coming debacle courtesy of progressive legislators. It's called "covering your ass".
Unfortunately, unlike market investors, they can't just pull out and wait for some sanity to return. They have to deal with the here and now.

Too bad these goobers didnt... (Below threshold)
Dave:

Too bad these goobers didnt show the same zeal when they passed that credit card bill; the interest rate on my Sears card jumped from about 12% to 25%, in anticipation of the new legislation. Thanks, Congress.

What's not clear is how ... (Below threshold)
wolfwalker:

What's not clear is how Congressional Democrats expect drug companies to continue the R&D necessary to bring new life-saving drugs to market if they're to do so without "reaping gains" on popular drugs already on the market.

Once, just once, I'd like to see a CEO from one of these companies face Congress and say, live on C-Span, "This bill will put me out of business. The day it passes, I will shut down operations and file liquidation bankruptcy. You will be directly responsible for putting all my employees out of work and losing all the taxes that I, my employees, and my customers pay." And then follow through on it.

Alternatively, I'd like to see one say, "I have a plan ready to move all operations to another country, to avoid these new taxes and fees. The day after you pass this bill, I will put that plan into effect. All development will be done there; all income will be recorded there. You will not get another dime from me -- not in corporate taxes, not in payroll taxes, not in my employees' income taxes."

s green "who says they ... (Below threshold)
Marc:

s green "who says they are scarce?"

Well, maybe the Tamaflu drug is scarce and why there is price gouging, or maybe it's just unscrupulous pharmacices.

Regardless, you do know that commenter was making a general statement on economics right? Guess not, either way you took the opportunity for a misguided shot at him/her.

How not so shocking.

The free market pharmaceuti... (Below threshold)
iwogisdead:

The free market pharmaceutical industry is the blessing of our generation. The new drug cures for incurable diseases are nothing short of miraculous. And (guess what?), if left alone, the miraculous cures that the pharmaceutical industry could come up with in the next five or ten years are unimaginable.

Drug companies come up with these regular miracles because they gamble enormous sums of money on research and development. They risk this money because of the potential profit from a new drug.

So, what do the Dems do? Naturally, they make the drug companies enemies of the U.S. The Dems have created an atmosphere in which the drug companies have to run for their lives.

Good job, Democrats!! Those miracle drugs of 2014 or 2020? Forget about it. Be happy with what you got. Take an aspirin.

Don't forget all those life... (Below threshold)
groucho:

Don't forget all those life saving drugs like Viagra, Cialis, Levitra, Prilosec, ropinarole (for restless leg syndrome), or Savella (for fibromyalgia). There are more. It's hard to criticize an industry that cloaks itself in altruism, but some close scrutiny is needed. There is no "market demand" here. Consumers/patients cannot get these drugs without the scribble of someone's pen. Pharmaceutical companies spend billions to try and control those pens and what they have left they use to buy legislators. They used to even give them the pens, but that has stopped.

There's plenty of money for R&D. Just prohibit direct to consumer marketing, influence-buying of providers and your miracle drugs will continue to flow through the pipeline. Or not, unless helping people is really not the motivation of Big Pharma. It's all about money, lots of it, just like every other major issue facing us right now. It's not about politics, it's about the fucking MONEY!

And iwog, can you give us an example of a new drug cure for an incurable disease?

"There's plenty of money fo... (Below threshold)
GarandFan:

"There's plenty of money for R&D."

Oh? And where would that be if those holding the money realize NO GAIN?

Where are all your altruistic Hollywood and big time liberal financiers who would WILLINGLY GIVE money for development, expecting NO RETURN on their money?

Name them groucho, we'd all like to know who these real American heroes are.

I think that thing you just... (Below threshold)
groucho:

I think that thing you just heard whistling over your head was my point.

Good night GF, time for bed.

Sheesh. What is wrong with... (Below threshold)
Rick Caird:

Sheesh. What is wrong with this grouch guy. Viagra was being developed as a hypertension drug. Has he ever known anyone with restless leg syndrome or fibromyalgia. Drugs make these diseases more bearable.

The grouch is also oblivious to the generic drug industry. They make nothing that has been developed by someone else. That someone else needs to recover his expenses and make a profit in the short time the drug is on patent.

The grouch, besides being a complete idiot about economics, seems to think that direct marketing to consumers is some kind of expense. No, fool, the whole purpose of marketing is to increase sales which increases profit which allows for more R&D.

The for his last idiot question. How about arimidex for breast cancer or any other cancer drug which prolongs life or eradicates the cancer. How about the cholesterol lowering drugs which reduce heart attacks and strokes.

The grouch is one of the people with a strong opinion, but no knowledge.

Rick

groucho "And iwog, can... (Below threshold)
Marc:

groucho "And iwog, can you give us an example of a new drug cure for an incurable disease?"

The very definition of "incurable disease" is just that, incurable, you twit.

rick "The grouch is on... (Below threshold)
Marc:

rick "The grouch is one of the people with a strong opinion, but no knowledge."

You just noticed that?

Must be new here.

psst nitwit groucho would y... (Below threshold)
Marc:

psst nitwit groucho would you consider a vacine a drug?

Ever hear of Poliomyelitis?

It paralyzed and or killed millions of children when first in 1840 until polio vaccines were developed by Jonas Salk in 1952 and Albert Sabin in 1962. Polio is near nonexistent at present.

When was the last time you heard of someone having smallpox? If you have, you or someone claiming to have had it recently are liars.

Smallpox was obliterated from the face of the Earth, the last smallpox death (following the accidental release of virus at the University of Birmingham) was in August 1978.

A vaccine stopped the virus in it's tracks.


"And iwog, can you give ... (Below threshold)
914:

"And iwog, can you give us an example of a new drug cure for an incurable disease?"

Your premise is illogical. If iwog somehow could? Than it would no longer be an incurable disease.

"I think that thing you just heard whistling over your head was my point."

Yeah, the point of Your head.


Now, now, now. There is not... (Below threshold)
bobdog:

Now, now, now. There is nothing wrong with the pharmaceutical companies that can't be solved overnight with a little permanent Congressional oversight, a little legislation, a few measly billion dollars of federal money, a few subpeonas, a couple of dozen new federal agencies and a White House czar or two.

Groucho makes Steve Green l... (Below threshold)
klrtz1:

Groucho makes Steve Green look like a genius. And that ain't easy!

The grouch is one ... (Below threshold)
The grouch is one of the people with a strong opinion, but no knowledge.

Which makes him no different than Vic, SAUD, jp2, Stevie Green, or any of the other moonbat trolls that like to hang out here.

This bill threatens the hea... (Below threshold)
Jim Addison:

This bill threatens the health of the whole world.

It takes years to get a new drug through the research, testing, and clinical trials needed to get to market, and fewer than one in 10 make it through the process. The profits on the

These R&D funds have to turn a profit in the end for the investors in the companies, or they take their investment $$ somewhere else.

35 years ago, only about half the new drugs came from the USA industry. European and Canadian companies accounted for most of the rest. Enter increasing pressure to control costs from their "National Health Services," and the European industry could no longer profit by developing new drugs - governments simply could not afford to permit it. So they switched to generic drug manufacturing where, while the profit margins were lower, there was no built-in R&D costs to absorb.

As a result, today USA firms account for 90% of new drug patents. If we are stupid enough to think we can "control costs" and continue to get the same R&D, people will die. All over the world, and for decades to come EVEN if Obamacare were repealed in 10 years, because the time, facilities, and talent lost to the abandoned research effort will take decades to recover.

People will die in great numbers, and many more will die sooner than they should have and suffer needlessly along the way if this bill should become law in anything remotely resembling its current forms (House or Senate).

And iwog, can you ... (Below threshold)
iwogisdead:
And iwog, can you give us an example of a new drug cure for an incurable disease?

Well, off the top of my head, the statin drugs, the anti-depression drugs, the antibiotics and the anti-inflamatories. There's Spriva for COPD. Rituxan has been approved as an anti-arthritis drug and as a treatment for lymphoma. It's now in clinical trials for approval to treat leukemia. Imagine that.

In the pipeline are all sorts of stuff, new treatments for asthma, arthritis, cancer, and heart disease, and vaccines for AIDS and Alzheimers.

I could go on and on.

Why is it when there's more... (Below threshold)
JLawson:

Why is it when there's more and more evidence accumulating showing that the Democrats in Washington don't have any idea of the long-term effects of pretty much anything they propose, they just keep piling on more and more programs and oversight and regulation and demands for this and that and something else?

Don't know if it's accurate or not, but one bit of speculation I heard was that the main reason the Dems are pushing SO hard for 'health care' reform NOW is they KNOW it's toxic as hell. 2010 is going to be a Democratic bloodbath if they get it passed, but there's no other possible chance to ever get it passed. Public support for the proposal is getting less and less the more is known about the specifics - if they don't pass it now, there will not be a second chance later.

If this turd gets ossified ... (Below threshold)
bobdog:

If this turd gets ossified into law, I'll support any candidate who vows to repeal it.

The demacrooks wwant a inve... (Below threshold)
Flu-Bird:

The demacrooks wwant a investigation why dont they investigate their own corupt labor unions that support them

Suppressed Medical R... (Below threshold)
mar:


Suppressed Medical Records (File 5100-13465/001)

St. Catharines, Ontario

- Privacy Commissioner of Canada (Sect. 25,26,28)

- C.M.H.A / C.A.M.H. - Brock University

Further details Google:

Medicine_Gone_Bad

or

http://medicine-gone-bad.blogspot.com/




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