Thursday, January 08, 2009

Quote of the Day: Socialized Medicine Can Kill You

New life-saving medications that go immediately into the market in the United States take a much longer time to become available to Canadian patients-- if they ever get approved by the bureaucrats.

No doubt that lowers the cost of medications-- if you count costs solely in money terms, rather than in terms of how many people literally pay with their lives when the bureaucrats are reluctant to buy new pharmaceutical drugs, while they can continue to approve obsolete and cheaper drugs for the same illnesses.


~Thomas Sowell

18 Comments:

At 1/08/2009 1:14 PM, Anonymous Machiavelli999 said...

Ummm....has Thomas Sowell heard of the FDA? And is he arguing that medicines shouldn't be regulated?

Because if he is, this is the usual free market absolutism, short sighted argument. Yes, sure the market, will pick the losers from the winners in medicines in the long run. Yes, some people may die in the short run, but in the long run people will turn away from the drugs that kill people.

Keynes quote "in the long run we are all dead" never seemed more prescient.

 
At 1/08/2009 2:12 PM, Blogger LoneSnark said...

Without an FDA it is easy to mimic its effects. Just convince yourself and others to never consume drugs that are not approved by Underwriter Laboratories.

Or you can free-ride: only consume drugs that have been approved by another countries version of the FDA. That is what Somali Airlines does for their planes. To get them certified they fly them to South Africa to have the state aparatus there certify them safe for passengers.

Or, here's a stretch, all the FDA really does is delay the drugs from coming to market. You can do that yourself by refusing to take drugs that have only been on the market for two years. Convince your family to do the same.

In that way, the FDA could be volutary thing. The government tests and certifies the drugs, requring a huge logo (skull and crossbones) be applies to all non-approved drugs.

 
At 1/08/2009 2:49 PM, Blogger 1 said...

"has Thomas Sowell heard of the FDA?"....

Hmmm, did it occur to you mach that's the reason Sowell didn't mention the FDA?

"And is he arguing that medicines shouldn't be regulated?"...

Well Sowell unlike yourself apparently understands that the big brother insertion into the medical field is not only Constitutionally questionable but that federal government intervention drives up the cost of all things medical...

If medicines should be regulated (how so very socialist of you mach) why should it be left in the collective hands of the incompetent government?

"Yes, some people may die in the short run"...

Again as long as it isn't you mach, right? (again how so very socialist of you mach)

"Keynes quote "in the long run we are all dead" never seemed more prescient."...

Ahhh, so now you are quoting the bent socialist Keynes now...

Maybe a dose of the wisdom and understanding of Dr. Walter Williams could clear up some of the delusion you are wallowing in...

 
At 1/08/2009 3:30 PM, Anonymous Mika said...

Reasonable folks understand that FDA was created out of necessity: "snake oil" sales were poisoning and killing Americans, other concoctions were outright marketing fraud. (Money wasted on drugs that don't work would inflate the cost of health care more than anything.) FDA endeavors to protect citizens just as the military does. If the FDA was a bad idea, maybe our military infringes on our right to be killed by terrorists?

 
At 1/08/2009 3:33 PM, Anonymous Machiavelli999 said...

1,

Ah yes, let's just label something socialist and be done with thinking about it. This is the usual free market absolutist thinking. By that thinking, I believe fire departments are socialist. Why should my money be used to help out the misfortunes and carelessness of others? And obviously because fire departments exist, people are running around with torches around their houses because they know the fire department will "bail them out" if something goes wrong right??

Also, I am pretty sure I can make a case the fire departments are constitutionally questionable as well.

Then I think you got a little confused "1". The "Yes, some people may die" line was supposed to be sarcasm, as in me mocking a free market guy. To explain further, if medicines were left unregulated, people would simply take whatever the salesmen convince people to take. Yes, in the "long run" the market will work out which drugs are good and which are bad, but in the short run people might die taking drugs that aren't safe. I am not sure what is so hard to understand about that. And if you are talking about the added cost of FDA regulation, think of the panic a particularly unsafe drug might cause if many people die taking it. Similar to the banking industry, the drug industry relies on trust. If that trust is broken by one drug, its effects could be felt by all drugs. Also, there is obviously the cost of dead people and the loss of production from them.

So, in the grand scheme of things whatever regulatory costs the FDA imposes, they are well worth it.

 
At 1/08/2009 3:45 PM, Anonymous Machiavelli999 said...

LoneSnark,

Your "Underwriter Laboratories" ideas is similar to the rating agencies which were supposed to grade investment securities. The problem is, the originator of the investment securities pay the rating agencies to grade their securities. Problems occur with this scheme because the rating agencies have an incentives to give good grades to all products since they are being paid by the originators.

Or, here's a stretch, all the FDA really does is delay the drugs from coming to market. You can do that yourself by refusing to take drugs that have only been on the market for two years. Convince your family to do the same.

This isn't an iPhone coming out and you are just going to wait a few years before jumping on the smartphone bandwagon. These are people's lives at stake. Some of these people might be desperate and try anything to cure their disease.

 
At 1/08/2009 6:01 PM, Anonymous Anonymous said...

Some of these people might be desperate and try anything to cure their disease? If they're willing to try anything they'll probably try ignoring the FDA. After all, they're not going to let bureaucracy get in the way when their lives are at stake.

 
At 1/08/2009 8:42 PM, Anonymous Machiavelli999 said...

anonymous,

OK, I should have wrote that differently. What I was trying to say is that lets say you go to some electronics store and some guy talks you into a shitty phone with no warranty and it breaks down. OK, you got ripped off, life goes on.

Now, lets say some "snake oil" salesman rips you off and sells you a pill that has dire side effects and you die.

Isn't there a little difference there? Isn't it worth the effort to regulate drugs? Or should people be allowed to sell poison disguised as drugs?

 
At 1/09/2009 12:37 AM, Blogger Plamen said...

Mach, while there is a legitimate role for the FDA, its modus operandi is flawed, because FDA employees take a lot of heat for Type II errors (approving drugs that should have been rejected) and no heat whatsoever for Type I errors (rejecting drugs that should have been approved). This, of course, causes them to "err on the side of caution", often delaying (or never at all approving) drugs that could save lives - often for reasons that would be ludicrous in a non-overlitigious context. If I am dying from lung cancer, and a drug can save me, I care little if my chance to get a heart attack will go up from .005% to .015% - but such a drug will NEVER make it to the market if the FDA has a say.

You make valid points, but do not forget - while saving lives, the FDA does kill people at the same time by depriving them of access to drugs. Making the FDA an advisory (as opposed to regulatory) body is not as ridiculous as it sounds.

 
At 1/09/2009 12:00 PM, Anonymous Anonymous said...

Sowell is not bashing the FDA or saying that they are unneccessary. What he is saying is that the Canadian health care system, which is run by bureaucrats, has a longer lead-time on getting newly approved, innovative drugs onto their list of medications that they would distribute.

 
At 1/09/2009 1:44 PM, Anonymous Mika said...

So we all seem agree that some kind of regulation is reasonable to protect public safety, although current bureaucracies in both countries have some problems that could be corrected with some tweaking.

This realization - and his article - do nothing to legitimately support Sewell's condemnation of governmental involvement overall. Obviously, the safety and affordability issues substantially trump correctable flaws in the delivery systems.

 
At 1/09/2009 2:51 PM, Anonymous Anonymous said...

He wasn't condemning government involvement overall as much as he was critical of the "universal health care" concept where government plays a much bigger role than it does right now through the FDA regulatory process. If you read the whole article and not just the snippet, the statement was referring to a government controlled medical care system such as in Canada.

 
At 1/09/2009 7:33 PM, Blogger peiell said...

If Sowell is concerned about avoidable deaths from restricted access to new medications, he should compare that to the avoidable deaths from 50 million americans that have no health insurance.

Which one is bigger?

Admission: I have not read Sowell's article.

 
At 1/09/2009 8:55 PM, Blogger Hershblogger said...

Actually, the cost in money terms is important, too. Up to $3 in hospital costs can averted for each $1 spent on the new drugs.

Example: AHRQ report

 
At 1/09/2009 11:15 PM, Blogger QT said...

Shouldn't one also consider the size of the potential market involved? Which is the more lucrative market; the U.S. with a population of 306 million or Canada with 33 million?

The regulatory hurdles are about the same but the potential profit is completely disparate in these 2 countries.

 
At 1/10/2009 10:14 AM, Blogger Hershblogger said...

Th regulatory hurdles in Canada include prices set by government, and an approval process (rationing) that makes the FDA look speedy. I'd say the regulatory hurdles are higher there and the profit opportunity even lower than the market size would dictate.

Interestingly, generic drugs tend to be significantly more expensive in Canada.

See
Medicine Cabinet Minister
.

 
At 1/10/2009 11:31 AM, Blogger Marcus said...

Your "Underwriter Laboratories" ideas is similar to the rating agencies which were supposed to grade investment securities. The problem is, the originator of the investment securities pay the rating agencies to grade their securities. Problems occur with this scheme because the rating agencies have an incentives to give good grades to all products since they are being paid by the originators.

That is a shallow understanding of what happened. In a free market rating agencies have their reputation at stake.

In this case however, government regulations require investors to use the ratings of agencies. This has consequences. It creates artificial demand for their both their ratings and the products they rate. Plus, it ignores the consequences of what must happen should a rating agency downgrade a rating as investors are forced out of their holdings.

 
At 1/14/2009 5:43 PM, Blogger Hershblogger said...

Frank R. Lichtenberg is a professor at the Columbia University Graduate School of Business and a research associate of the National Bureau of Economic Research.

Here are some conclusions he reached from his research into the cost/benefit of new drugs.


Yes, New Drugs Save Lives

According to my econometric model, about two-thirds (63 percent) of the potential increase in longevity during this period -- the increase that would have occurred if obesity, income and other factors had not changed -- can be attributed to the use of newer drugs. In fact, for every year increase in average drug vintage there was an almost two-month gain in life expectancy.

Increasing access to newer drugs was not associated with above-average annual spending on health care; and the use of newer medicines seems to have increased labor productivity (output per employee) by about 1 percent per year, perhaps because of reduced absenteeism from chronic ailments. Overall, my findings contradicted the common assumption that advances in medical technology automatically result in increased health-care expenditures.


Look Past Price For Health Care Value
If patients and doctors hadn't had access to these newer vintage medicines since 1995, I estimate that the disability rolls would have increased by an additional 30%. This translates into 418,000 more disabled Americans getting an additional $4.5 billion in support from Social Security.

 

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