Why Healthcare Cannot Be a Completely Free Market

The concept of supply and demand is the cornerstone of economic theory. For simple commodities, the theory predicts that the demand for a product decreases as the price of the product increases and consumers are unwilling to pay the higher price. The supply increases as the price increases and suppliers increase production to capture increased profits. The actual price of the product is a compromise between the desires of consumers and the acumen of suppliers.

Tutorial on the Regulation of the Pharmaceutical Industry

The pharmaceutical market place is not entirely a free market. The extreme demand for lifesaving products can make standard economic assumptions inoperable. Therefore, regulatory mechanisms have emerged to protect patients and to provide patients access to affordable medications. There are three aspects of pharmaceutical operations in the U.S. that are regulated by the government:

Mr. Trump and the Global Circus

Just what is the crazy-like-a-fox President-elect of the U.S. up to? His antics would make P.T. Barnum blush with admiration. Mr. Trump has created a spectacle of showmanship on a scale unequaled at any place and at any time in the past. His millions of voters are more Pavlovian than a 50-dog act. And his detractors are as puzzled as they are livid. Let’s step back and take a look at the history leading up to this circus. Perhaps this can provide us with some hint on what to do next, before the lions are released into the cage with us.

The Decline and Fall of Globalization

To understand what happened in the recent US Presidential election, we have to go back to the early 1980s. At that time the overall global social mood shot upward, probably as a consequence of growing international financial integration that tended to undermine the age-old paradigm of “international diversification”. As the social mood became ever more positive, feelings that “everyone is a potential friend” grew stronger and drove events toward increasing interdependence, trade, and cooperation. It’s no accident that the European Union was formed during this period, along with the World Economic Forum in Davos. This story is graphically shown in the diagram below, where we see globalization totally flat until the mid ‘80s, where it exploded until around 2008.

Some Modest Proposals

I am a social-media whore. I am awake after midnight fascinated by what people might say next. Now that Mr. Trump won the Presidential election, the future no longer seems to be constrained by civilized precedent. Any proposal is now taken to be credible; even the dismantling of the extremely popular Medicare is on the table.

Over the Edge of the Technology Cliff

In the latter half of the twentieth century, two of the highest-flying tech firms were Wang Laboratories, manufacturer of word processors, and Research in Motion (RIM), a Canadian company that produced the famed Blackberry, which took the world of cell phones and electronic email by storm. It’s instructive to look at the timeline of these two companies, both in terms of technology and revenues, to see how things can go very badly very quickly for a company operating in a fast-changing environment.

Complexity Gaps Lead to Inequality

American political scientist Francis Fukuyama announced the “end of history” in his essay of the same name published in 1989. In that article, Fukuyama argued that communistic social and economic principles collapsed along with the Soviet Union thus leading to a victory for liberal-democratic capitalism in their decades-long battle. What many people missed in Fukuyama’s essay was the part in which he wondered whether citizens in the West would proceed to lose moral and spiritual purpose now that the Cold War had ended the East- West ideological conflict.

How does healthcare economics in the U.S. differ from traditional economics?

The concept of supply and demand is the cornerstone of economic theory. For simple commodities, the theory predicts that the demand for a product decreases as the price of the product increases and consumers are unwilling to pay the higher price. The supply increases as the price increases and suppliers increase production to capture increased profits. The actual price of the product is a compromise between the desires of consumers and the acumen of suppliers.

Clinical Trials in the Era of Personalized Medicine

Excerpts from the book Confronting Complexity X-Events, Resilience, and Human Progress by John L. Casti Roger D. Jones Michael J. Pennock preface table-of-contents Click to Buy Paperback E-Book Bundled The cost of sequencing an individual human genome is rapidly dropping below $1000. Much of the population can now easily access the details of their susceptibility…

The Patient-Driven Drug Pipeline

The new-drug pipeline is a mere shadow of its former blockbusting self. Despite the fact that R&D expenditures have been increasing over the last several years, the number of drugs in the pipeline has been decreasing. There have been many proposed explanations for this:

Healthcare Patents and Hot-Dog Vendors

While patents on medical devices seem normal, patents on drugs and chemical entities may seem like a stretch. I am not sure that the law makers in Venice in 1474, who invented the legal concept of a patent, envisioned the need to patent molecules. In fact, molecules were not even envisioned at that time. We all know that a patent allows an inventor time to commercialize his or her product, but are patents really needed for the economic viability of healthcare? Shouldn’t healthcare be all about saving lives and promoting health and not about making money on people who desperately need healthcare? Do patents have a benefit to patients, not just the patent holders? I think the answer to this question is “perhaps.” Patents promote diversity of products in the healthcare market place by forcing inventors to develop drugs outside the domain of currently patented products.