Preemie birth preventive drug spikes from $10 to $1,500

I can understand making a monopoly in some cases, but NOT on drugs. Drugs are very controlled in the first place (at least in EU) and there would previously be no major difference between the different producers. to top that of why wasn't there made a price policy at the time this company got the permission? any enforced monopoly here has a price policy, the post, public transportation, electricity, and so on has all very strict rules about their pricing. A regulated marked does not have to result in this sort of price hike.

 

You weren't very premature. Only 1 in 100 babies born at 23 weeks survives to adulthood without disability. Survival rates just a week later are significantly better. Trust me, it could make a huge difference.

 

Those are all good points. I wouldn't presume to know how the "orphan drug" policy was created, I simply don't have the information/knowledge. I must keep things fairly theoretical basing almost everything on basic economics, a little historical knowledge and this one news article. But I could make arguments about price controls being a case of the cure being worse than the disease (to make a topical pun) in producing surpluses and shortages but that would probably take the discussion off course and I do that enough as it is.

 

Neither of us has the information necessary to make any end judgement in this case

Getting an economical degree myself, but the way that Americans and Europeans look at economics actually differ quite a bit.

 

I can tell you have some interest and knowledge in this subject based on your responses and I'm very interested in your input.

It is worth saying that the FDA's incentives are directed at safety not costs, so this particular example certainly falls very much consistently with that fact. Highly trained and well-meaning people can come to conclusions that are wholly detrimental to their constituencies when looking at the incentives and constraints they are working under when looking at the incentives and constraints they are working under when looking at the incentives and constraints they are working under.

Regarding economic points of view between Americans and Europeans: Economics is merely a scientific study of costs and benefits. I view the difference between the US and EU (and any other comparable economic structure) as a political and philosophical difference, each of which can be analyzed via economic principles. Economics, by it's very nature, is free of any politics, morals or virtues. I will concede that economics has become politicized, which is a shame. Even Karl Marks and Frederick Engels, who's political philosophies contrasted dramatically to those of America still had a firm grasp on economic principles which is why their work has survived the scrutiny of time compared to a wide range of other theories of the time that faded unremarkably into history.

 

I'll add 2 points:

1. the company has made it clear it will make the drug available for a $20 co pay to low income families. (what the point of low income is, remains to be seen)

2. this drug can not be used in first child cases, since there is no way to tell if the mother is at risk of pre mature birth. So, it's not as if they are removing a tool that will prevent 50% of premature births, given the 2 children family structure in the majority of US households.

My take is that they raised the cost knowing that government/health care insurers would shoulder most of the cost. Granted, not the ideal scenario, but it's not like they are out to let low income 2nd children grow up retarded to make more money.

 

Good point, we all know one place where this has been the case.

Economics are always subject to estimations, what the effects are and how they show vary depending upon the frame in which it works. Do less tax make people work more or less? that all depends on from what perspective you are looking at it. while yes the difference between Europe and US is mainly philosophical, but economics is not an exact science, you can never precisely estimate the result on the marked.

Unfortunately I think you are underestimating the greed of corporations. An example is the huge increase in the price of rice and other foods a few years ago, this had several reasons, but many companies invested heavily in these foods and thus further increasing the price. the result was hunger in several countries, and that the development specially in Africa was set back anywhere between 10-20 years. All for making a little profit.

 

The rice market spiked because of heavy rains....and Africans don't eat a significant amount of rice in their diets. So I'm not sure what your point is, but I'm sure it made perfect sense from Denmark. If you really think the price of rice was the cause of hunger in "several" countries or set back development in Africa 10-20 years.....

 

The initial rise in prices was a result from heavy rain yes and a dry in Australia (again), however as the investors found it to be a good investment as the prices kept rising they invested heavily in rice and corn stockpiles, even further increasing the price.

While rice may not be the main food in Africa this affected the price on corn and wheat as well, and rice is one of the main foods in humanitarian aid, the higher the price the less they can by form their limited budgets.

If you only look at the rain and the dry as the main factors it doesn't make sense but factor in that the stock marked for these products are very limited and that many investments funds suddenly started to invest into these limited shares, you have a simple supply/demand problem.

If the rain and the dry had been the only factors the price would have gone up some 10-20 %, and not the reported 75% in some areas.