At the very end of this article at MIT Technology Review, discussing an idea of which I’m extremely skeptical—a market-based approach to drug approval, are these sentences:
Could a free-market approach lead to lower costs? Baker is skeptical. “Drug companies charge what they can get away with,†he says. “Making it easier to get a drug through the FDA won’t change that one iota.â€
Two points. The first is that Dr. Baker’s remarks reflect a genuinely shocking lack of a meeting of minds on what markets are all about but the other brings up a very interesting point. Why do all discussions of markets never include, well, creating markets? How can you have a free market in anything with government-erected barriers to entry?
Libertarian idiocy. (Is that redundant?) So you try untested brand X chemo. Doesn’t work and you die. Somehow word will magically percolate out and everyone will just know not to buy that drug? Good luck to the guinea pigs. Seriously, look at some of our worst device failures. Let’s look at the knee replacements that were contaminated by oil. They were failing like crazy. Nobody in the US figured it out. In Europe, where they have national registries, they caught on and stopped using the device. We read their literature, which was how we figured it out.
This is just not like getting a steak at a restaurant. You know right away if it was good or not. You tell your friends and family. Now you take the untested BP or BC pill. How do you know if it is working? What is the cost of failure? What side effects are you having? What other systemic effects are going on?
Most people on the Left and Right including libertarians assume as a starting point today. Planes have not been falling out of the sky. Therefore, the FAA is unnecessary. Restaurants are not killing people. Therefore, the Board of Health is not needed. And, so on …
(The Left has their own versions. No immigrants hijacked planes and flew them into NYC skyscrapers. Therefore, we should not place any burdens upon anybody wanting to come to the US, legally or illegally.)
They never explain how these conditions would occur without the institutions they claim are unnecessary, and note, they never claim that the institute is no longer necessary. In fact, few of these institutes would ever exist truly voluntarily (without the threat of government intervention).
If the market mechanism works, it is only after damage has occurred, and more importantly, the damage must be enough to have garnered widespread knowledge. In addition, the knowledge must be such that the entity providing the goods or service has some reason to modify their behavior.
Toxic Chinese dog food and corrosive drywall was being imported, and the free market mechanism did not seem to work, or is the free market supposed to work after the fact? This, of course, is the problem.
The free market does not tell us which doctor has killed the most patients performing a tonsillectomy, and it cannot predict how many patients he/she will, if any. The free market is a subjective mechanism, and for subjective decisions, the free market works wonderfully.
For objective decisions, there must be a stated set of criteria. Determining the best doctor to perform a tonsillectomy has nothing to do with what other people thought about him/her or how many suckers one received upon completion of the office visit, but without the medical knowledge to differentiate between competent and incompetent doctors, free market decisions will be based upon similar silliness.
Actually, the free market approach will be endless television commercials of drug companies and lawyers, and many times the same drug will be back-to-back.
There is going to be a national public healthcare system, or it might be at the state level like public schools. There is going to be something, and if nothing else, it will be Medicaid/Medicare for all.
That’s a point I’ve made frequently. Once upon a time we had something that approached anarcho-capitalism. We didn’t create the FDA out of malice or to become a vehicle for rent-seeking. It was done because the old system didn’t protect people from adulterated or harmful food or drugs.