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Re: Universal (well US wide) Health care: INelasticity of demand
RMax304823
06-03-2008, 3:56 PM | Post #2524329
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Gaius and Leach: I generally agree with your points. But I ought to reiterate that there are lots of reasons for zooming health care in the US. And that the demand isn't entirely inelastic. I mentioned an aging population, which accounts for much of the demand for Viagra, hair transplants, and what not. I mentioned "me-too" drugs that enormous amounts of money are spent on by pharmaceutircal companies. I'm not sure most people know just how that works. If a new drug, like Xanax, say, or an SRI becomes a big success, it is protected by patent. But other drug companies immediately throw research money into developing a competitor drug. They do it by examining the molecule of the protected drug, jiggling an atom here and there, and testing it to see if it works nearly as well as the original. If it does -- voila! A share of the market now going exclusively to Xanax. That's what pharmaceutical compnies mean when they say they spend much of their profit on research. They look for unprotected drugs that are as close as possible to the patented and profitable one. The aim is not to ease suffering or prolong life but to make money. Until only a generation or so ago, it was beneath the professional dignity of drug companies to advertise their products on TV or in magazines. The usual process was to lobby individual doctors with detail men and to convert docs en masse with propaganda trips to the Caribbean or Las Vegas, still a common practice. All these marketing costs were added to the price of the drug, of course, meaning we pay a big 12B-1 fee each time we buy a pill.
Topics
aim
health care
pharmaceutical
SRI
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