Friday, June 3, 2016
The Most Savage Aspect Of Capitalism: The Medical Arena
"America's real religion is capitalism, and like any religion it needs a devil. And that devil has always been socialism....Republicans think if you allow a little socialism it will spread out of control. But actually it's capitalism that has spread out of control. It's eaten our democracy and it's eating our middle class - our health care system, our prison system, our news media. It's even eaten our food system so a lot of our food is no longer something that should be eaten
Capitalism is a shark, or a tidal wave...an unthinking force that devours everything in its path. Socialism is capitalism's 'lap band' - something to prevent it from eating almost everything" - Bill Maher in last of his 'New Rules' on Real Time last night.
One of the hallmarks of a religion is that its dogmas and tenets are accepted without question, or challenge. These arrive from 'on high' so are presumed beyond experimental test, or testing via personal experience in the real world. On account of the absence of reality testing even its myths are thereby integrated into a person's belief matrix and become unquestioned tropes.
In this sense, Bill Maher's comparison of capitalism to a religion in the final segment of his Real Time episode last night was spot on. One of the ongoing myths concerning capitalism is that it is based on a "free market". But as I already pointed out in other posts this is simply untrue. Large domains exist where markets are effectively coerced and hence rendered out of consumers' control. Nowhere is this more valid than in the medical arena, given that the purchase or use of health care is unlike that for commercial products like HDTVs, Ipads, SUVs or cell phones. People often need medical services the most at the very time their health is gravely compromised - say in an emergency - as with my gall bladder attack back in March.
I simply didn't have the luxury to look all over tarnation for the cheapest services. I had to go to the ER that was closest to get the issue resolved at that point. It's emphatically not like buying a damned car or an HDTV!
Consider the issue of coercive markets in medical care, and especially in the area of pharmaceutical drugs that one may need to live. I already examined this in the case of a number of cancer drugs in a December post, e.g.
Therein I cited a Wall Street Journal article from Dec. 9. 2015 of how Pfizer (which also makes Viagra) arrived at a whopping drug price ($9,850 a month) for Ibrance. According to the piece it was originally called PD-0332991 and "grew out of work on proteins that help regulate how cells form and divide". The research "won a Nobel Prize" and "set off a hunt by drugmakers to put the brakes on the overactive proteins called cyclic-dependent kinases."
Pfizer's specific novel compound "targeted advanced breast cancer fueled by estrogen - a disease for which existing therapies offered only modest extension of life"
The WSJ author then exploded one of the more common tropes: that costs are based on research. Forget that. In fact, as per the article (p. A1):
"Drug companies routinely raise the cost of older medicines and then peg new ones to these levels".
In other words, they game the system, and this is one huge reason medical costs are spiraling out of control.
Here's another aspect: One of the first things budding economics students learn is that capitalist markets are subject to the "law of supply and demand". If the supply of a thing plummets then its price is bound to rise in direct response to the demand. The converse is also supposed to be true, where there is little or no demand for a product, the price is expected to go down. This applies across the board, whether the item is a new Ipad, or cell phone, or TV. According to an expose in TIME (May 30, p. 40):
"The first thing to understand about drug prices is that the rules of supply and demand do not apply. 'People say let pharmaceutical manufacturers charge whatever the market will bear' says Aaron Kesselheim, an associate professor at Harvard Medical School. 'But it doesn't work like that. It's not rational - it's a flawed market."
The article goes on to point out, as I did in reference to my gall bladder attack, that this situation is because "sick patients aren't normal consumers and therapeutic drugs are normal products. Unlike the way we shop for say, hand soap, patients typically lack the knowledge and options to compare the cost and quality of various medications. They just want to get well."
Indeed. But as the TIME expose makes clear, "the problem is exacerbated by our insurance-based system which shields most of us from the real impact of a drug's prices - driving up spending overall."
Spending is huge if patients need a specific drug say like Syprine - one of the only drugs that treats Wilson's disease but for which Valeant has boosted the price by 3200 percent - leaving those who survive on the drug very little choice but to bankrupt themselves. It's either that or die. This is a coercive market that eliminates choice, not a free market.
All this has just been hunky dory with Wall Street investors "who have swooned over the sector". And why not? As asserted by John Rother, head of the National Coalition on Health Care (p. 41):
"From 2012 to 2015, more than $50 billion in new capital poured into the industry"
This then has further distorted the so-called market by convincing the drug companies to focus on delivering short term gains to shareholders instead of developing drugs based on time-consuming R& D..
Hence, the fiction peddled that all the high costs arise from research is pure bunkum. It's a smoke screen to cover the actual game which is to lard the pockets of Maul Street speculators using the Pharma sector as their personal piggy bank.
Charles Reich poignantly notes in his book, Opposing the System, Crown Books, 1995, p. 22:
"A free market produces results that favor the health of society as a whole, because an essential balance is maintained. But in a coercive market, the balance is destroyed, the earning power of work and the standard of living of workers declines, and society as a whole is devastated while those with economic power gain an ever more unbalanced share of the nation's economic wealth."
Thanks to gimmicks such as run by PhRMa this is exactly what's been happening. The speculators are reaping huge rewards while the enormous costs of drugs have been socialized to the hoi polloi who can least afford the burden. Meanwhile, they are stuck with 30-year old hyper-expensive drugs like Syprine which has had its price inflated by 3200 %. What's wrong with this picture of capitalism run amuck? Everything!
Ironically, it's been pointed out (TIME, p. 42) that the PhRMa industry was "quick to condemn Valiant and similar tactics from other drug makers, decrying them as hedge funds masquerading as pharmaceutical companies" and yet they engaged in similar - but more nuanced - tactics." Thus (ibid.):
"Instead of hiking prices as dramatically as Valeant did, mainstream pharmaceutical companies built their businesses on boosting drug costs slowly, sprinkling 7 to 10 percent hikes over the course of a year. The result? Many popular drugs increase in cost by as much as 300% and drive profits but they don't draw public scrutiny."
But a 6 oz. bottle of arsenic will finish you off, whether taken in measured drops-doses or all at once, something these drug makers understand. But, riding the capitalist "shark" they don't give a damn - let citizens sink or swim.
Adam Smith - in his 'Inquiry into the Wealth Of Nations' - noted: "there are needs in a civilized society that a barbaric one refuses to address." He also pointedly stated:
"What improves the circumstances of the greater part can never be regarded as an inconvenience to the whole"
This may certainly be stated of health care, when provided in a way that doesn't bankrupt a person. At the end of the day, the more healthy citizens we have, the more productive a nation we become. Thus, tax money for genuine health care ought be looked upon as a real investment in domestic economic and national security, not some kind of pernicious "robbery" from the tax commons.
Liberals and social justice activists are not looking for any free "ride" so much as an equitable playing field for all. A civic landscape wherein the common welfare and good has at least an equal chance to flourish as individual gain, or corporate profits