Free Markets and Flu - A Deadly Combo

[JohnT]

... and I said that, where?

[JohnT]

Originally posted by notyoueither
And he might say that regulation is difficult in international settings where the law of the jungle still prevails.

And I suppose that US anti-trust laws are there without any justification whatsoever. None at all. They're just big meanie gobments intruding on good honest folk trying to get by, right?

He does say that just one law, rule, tax, or regulation that possibly impacts commerce does not a "free market" make. Ergo, laws against murder violate "free market" principles and if you live in a society with laws against killing, you don't live in a "free market" economy.

It's why I always use quotation marks whenever I mention "free markets" around OB, as he loves nothing more than bandying semantics to the point of uselessness.

[notyoueither]

Oh. Carry on, then.

[JohnT]

Btw, I support anti-trust laws and wish they'd be used more... especially in regards to cable and media companies.

[Oncle Boris]

Originally posted by JohnT


... But I repeat DinoDoc: What the hell are you talking about?

Secondly, do you always have to use insults in your arguments?

Personal insults: I don't mind them if they come along with a point and if they are somewhat funny. Yeah, somewhat

And what am I talking about? I'll make it simpler: a Corporations' dream is to control both offer and demand, which has nothing to with Free Market, I agree.

Now back to the oil crisis: I never said it was caused by the Free Market; it was caused by bypassing its principles. Producing just like the demand is bad for selling prices; thus cartels reduce production by 10% and prices rise by 50% (the numbers are purely speculated, this is just an example).

[JohnT]

Well, they do nothing but detract from your arguments and how you're viewed by the community. Such things might not matter to you, but you'll find that you and your points would be better received and better-debated if you leave them out.

[Oncle Boris]

Originally posted by JohnT


He does say that just one law, rule, tax, or regulation that possibly impacts commerce does not a "free market" make. Ergo, laws against murder violate "free market" principles and if you live in a society with laws against killing, you don't live in a "free market" economy.

It's why I always use quotation marks whenever I mention "free markets" around OB, as he loves nothing more than bandying semantics to the point of uselessness.

C'mon, JohnT. I use "free market" in its libertarian meaning, which means all regulations are not economic but political.
What a libertarian postulates is that the only crimes are those using physical violence, or those that are a direct violation of property (fraud). Besides this, everything is allowed.

[DinoDoc]

FakeBoris is still clear as mud to me. I'm still trying to wrap my head around how someone can get around the dissonance caused by relating OPEC to a free market without having thier head explode.

[Imran Siddiqui]

DD: I'm not sure that he doesn't know that OPEC was a government run cartel and no private corporations were involved .

[Mordoch]

Originally posted by Berzerker
Mordoch -

The program she and her hubby began is still in effect, "Vaccines for Children".

The problem is that this program is definately being run by the government, specificly the CDC, and is therefore included in the under 10% figure. Given that's clearly only a portion of the purchases, its safe to say that any argument that the "Vaccines for Children" program is responsible for the state of the Flu manufacturing companies is utterly bogus. Additionally, there definately appears to be no compulsion on manufacturers to sell to the "Vaccines for Children program" as "Manufacturers of Tetanus Diphtheria (Td, DT) vaccines have refused to bid on CDC contracts since 1998, making these vaccines unavailable for purchase through the VFC program."
http://www.cdc.gov/programs/immun9.htm This means that if it was unprofitable to sell their vaccines to the government, they would refuse to do so and just sell to private companies.

According the guidelines that appear to have been in place for years, only children 6 to 23 months are ordinarily eligible for flu vaccines under the program unless they come from "high risk" households. I'll repeat again, if the market was as bad as you were claiming, "Flu Mist" would have avoided entering the market. The program may have more of an effect with regards to other vaccine products, but it definately does not look like it can be blamed for the flu vaccine shortage.

[JohnT]

C'mon, JohnT. I use "free market" in its libertarian meaning, which means all regulations are not economic but political.

See? Bandying semantics.

[DinoDoc]

Why in God's name are you people still on the Times article? Quoting the Times is about as worthwhile as quoting the World Socialist website.

[Mr. Harley]

Impressive - I leave for 16 hours and the discussion really gets going!

JohnT, please give me the courtesy of reading my posts. I specifically ORDERED the damn vaccine, and delayed having her get it because giving the vaccine to a six month old is relatively new policy (the RECOMMENDED part by the CDC) and it is rough on their bodies. We both (me and my wife) thought it was safer to wait, took reasonable steps to make sure she would have the vaccine, and then got blind-sided.

Nobody at the pediatrics group had the courtesy to tell us - that our requesting it specifically makes no difference, we only give them on a first come-first served basis. As I stated, that is an entirely seperate issue (the lack of customer-oriented policies in the medical field - that's for a different thread) that I am going to take up with the office manager. If I am not satisfied, I will take my business elsewhere. And I am willing to prepay, as I stated, unlike some consumers who want the business to absorb capital costs. I just want the opportunity to prepay! Think aboout it. The fact I'm writing this, from a business standpoint, is ridiculous.

There are some interesting things brought up on the posts here. Berzerker, I have to give Mordoch the citation award. The Washington Times is biased by their own admission, and is the primary source you quote. Mordoch goes with the CDC, which has already had to make changes to its web sites under the Bush administation. It definitely is not a liberal group, and tries very hard to be unbiased. Plus, the Washington Times is presenting a seriously over-simplied causation argument, without looking at the complexities, to support agenda driven reporting.

You, nor any of the other rampant free-market types, have addressed the issue I brought up about mature markets. Today's Wall Street seldom rewards a company whose growth does not exceed the national growth rate. That is why I made my comments about mature industries, and capital. Investment bankers definitely expect a return well above interest rates. This will typically not happen in a mature industry. It can't.

Please note, that when a new vaccine was produced (the nasal one) outside the mature industry, even at a higher price, it was produced. It met various needs, showing that the free markets can work. But growth will only occur with truly new products, in a market that can afford to pay for them (which is one reason we don't have a malaria vaccine - it's both technically exceedingly tough, and the markets for it are going to produce minimal profit). The vaccine market is mature, with limited growth potential.

Oncle Boris, though I may disagree with many of his posts and totally disagree with his style of argument, made a very succinct point about cartels, though this is more of a case of consolidation. The consolidation that has occured in the vaccine industry is a result of what naturally occurs in mature free markets. Add in the factors about low return, and you get a small number of vaccine manufacterers. Drug companies expect a much higher mark-up than available for the typical vaccine. You cannot get it from what is essentially a generic product - most vaccines have no patent protection.

You end up with a defacto cartel-like situation. Stopping imports for legitimate and also exagerated health reasons (government intervention) supported by the vaccine manufacterers. Due to consolidation, a limited ability to sue over contract issues - putting one of the two vaccine companies out of business is like cutting off your nose to spite... Can anybody find me the number of vaccine companies in 1992 (prior to Hillary) and in 1985 (prior to the tort reform). Also a similar snapshot for the entire drug industry. I've just spent half and hour and had no luck.

The whole Autism issue makes another point. So far the science is inconclusive. People forget that the science of communicable diseases is not, and is you look at the pre-vaccine days, the number of children suffering life-long consequences (deafness, brain damage, being crippled, ad naseum) from these childhood diseases is more direct, and provable.

However, people have forgotten that. People scared by the Autism link have been withholding their children from the vaccination network. As long as the numbers are small, they can piggyback on the herd immunity (technical term - enough people are immunized that the non-immunized gain the same benefit, to slightly oversimplify). Unfortunately, the numbers are becoming sufficiently high that we are in danger of losing that herd immunity.

Issues like that are one of the reasons public health types supported Hillary Clinton's program. No matter how misguided you may feel it was economically, from a public health standpoint it was sound policy. Before you run on about how the poor could always get free vaccines, read some local coverage from various states. Over the last couple of years states have been cutting the free vaccine programs, due to budgetary constraints. Hillary Clinton as a prophetic voice. Please don't choke too hard . Just for the record, I don't like her either, but I couldn't resist.

The class action commentary applies primarily to this very narrow case (though if you go to Mississippi I'll bet you can find an exception ) - thimerosal as a preservative and the inconclusive links to autism. That affects only one company, remember in 1986 the industry received liability protection and the consoldation still continued, even prior to either the Clintons or the thimerosal suit (look back at the mature markets part of this post). The problem is similar to the one with lead paint. Austria and France banned it for indoor use in 1909 - the same did not occur in the US until 1978! For whatever reason, US companies have a historical tendency to practice reactive versus proactive safety. It's an ongoing debate, and unfortunaly leads to the kinds of class-action lawsuits we are talking about.

Injecting mecury complexes (metallic mercury is hard to metabolize, which makes it biologically less reactive) into children, whom we are finding out already are getting a fair degree of exposure due to coal-burning and fish consumption appears foolish. Especially as each exposure is cumulative. Add in the huge increase in the number of vaccines each child receives over the last half century, and it does not take a rocket scientist to figure out MAYBE this is not such a good idea. The manufacterer was complacent about it, and now they are getting their butts sued.

If you wait until you have proof of a problem, instead of indications, you are going to have individuals who are part of the "statistics" that make up that proof. Their families are going to be less than happy. Look at asbestos, lead, and the Ford Explorer. This doesn't mean that I like class action suits, all they usually produce are exorbitant fees and the inclusion of people with no actual harm, to the detriment of those who are genuinely hurt. Unfortunately sometimes class action suits end up being the only venue available for the little guy.

My wife and I looked at the numbers, read journal aritcles, and have chosen to stretch out our little girl's vaccines. We make two visits two weeks apart and have each group of vaccines split in two. It's a compromise between the inconclusive research and possible dangers posed by either some of the vaccines or the large number now given, and the definite danger these diseases pose. We are fortunate in having the time resources to do this, many parents do not.

edited - to correct transposed names - it was Berserker, not Imran, whose citations are blatantly biased.

[Imran Siddiqui]

I see your point but it's not like the government decided to step in after the fact, it's there all along...

Jeez, I was saying it was ironic, I wasn't making a 'point'!

Imran, I have to give Mordoch the citation award. The Washington Times is biased by their own admission, and is the primary source you quote.

I haven't quoted ANY sources. Perhaps you are thinking of Berzerker?

[Mr. Harley]

Imran, I sit corrected. I apologize, and am editing the post. I periodically transpose names (I did it with Sikander and Ned in another thread). That's why I learned to use "dear", "sweetheart", and "honey", women have NO sense of humor about things like that the morning afterwards.

[DAVOUT]

The demand of an item sold during a short period of the year is always difficult to anticipate, particularly if the manufacturing process is long, and if the possible overproduction is not salable the following year, which is the case of flu vaccines evolving every year.

From a business point of view, the problem is not greed at this stage, it is to find a way to cover the risk of overproduction; the cost of this risk must be included in the final price paid by the end user (directly, or indirectly if the governement manages it).

[chequita guevara]

Originally posted by notyoueither
Our situation has everything to do with nanny state inefficiencies, and is a good example that a lack of free market forces in medicine is not necessarily something good.

It also has to do with conservatives and their fellow travelors cutting funding for your health care services. They can't ge rid of state health car, cuz it's too popular, but if they cut it to the bone and let it bleed to death, then the pulic will be forced to accept private health care.

[chequita guevara]

Originally posted by Berzerker
http://washtimes.com/national/20031210-120855-1153r.htm

Why don't I just start quoting from The Revolutionary Worker?

[JohnT]

Because that would be biased?

[Ned]

Originally posted by Whoha


dead wrong, this is a textbook case against socialism:
http://online.wsj.com/article/0,,SB1...ml?mod=opinion

you need a subscription for that, but here is what it says of importance:
"The root of this government role goes back to August 1993, when Congress passed Mrs. Clinton's Vaccines for Children program. A dream of Hillary's friends at the Children's Defense Fund, her vaccines plan was to use federal power to ensure universal immunization. So the government agreed to purchase a third of the national vaccine supply (the Clintons had pushed for 100%) at a forced discount of half price, then distribute it to doctors to deliver to the poor and the un- and under-insured.

The result is a cautionary tale for anyone who favors national health care. Already very high in 1993, childhood vaccination rates barely budged. A General Accounting Office report at the time noted that "vaccines are already free" for the truly needy through programs like Medicaid. Meanwhile, however, the Hillary project dealt the vaccine industry another financial body blow.

Thirty years ago, the Institute report notes, 25 companies produced vaccines for the U.S. market. Today only five remain, and a number of critical shots have only one producer. Recent years have brought shortages of numerous vaccines, including those for whooping cough, diphtheria and chicken pox.

The Institute of Medicine panel seems to assume -- probably correctly -- that it's not politically feasible simply to kill something called Vaccines for Children. But it does suggest that removing the government as a direct purchaser would allow for adequate reimbursement and help the industry to get back on its feet. So it recommends replacing existing vaccination programs with a subsidized insurance mandate for children and seniors, and with vouchers for those who lack coverage. "

Thought so. Hillary Clinton and her effective price controls have taken all the profit out of the industry forcing it to produce ONLY the estimated need because if they produce more they take losses.

Hillary Clinton -- damn you, damn you to hell!

Down with the Democrat Party. It will only bring this country to ruin.

[Mordoch]

Originally posted by Ned


Thought so. Hillary Clinton and her effective price controls have taken all the profit out of the industry forcing it to produce ONLY the estimated need because if they produce more they take losses.

Hillary Clinton -- damn you, damn you to hell!

Down with the Democrat Party. It will only bring this country to ruin.

Read my posts and the links to the CDC website I posted. While this could be discussed as a possible cause for other vaccines, it definately does not account for the state of the flu vaccine industry.

[Ned]

Mordoch, but the principle is obvious: take the profit out of an industry and you will see a decline in everything about it, from investment in new techniques, to production capacity, to having a production quota that just meets estimated demand. This is self-evident.

Even though I condemned Democrats for this kind of thinking, I must also give my generous condemnation to one tricky-****, who imposed wage price controls on this country in 1972 and kept them on gas and oil prices when it lifted them elsewhere. That led to "shortages" until Reagan, the liberator, was elected.

Long live Ronald Reagan! Long live the conservatism!

Wage, price and profit controls can and do kill economies.

[Mr. Harley]

Ned, you're discussing Hillary again . Mordoch has richly pointed out that is a red herring. Her effects on the flu vaccines are minimal. What you haven't discussed are the issues involved, namely a mature industry, razor thin profit margins, long lead in production without any ability to react to increased demand, and a heavy profit penalty for over-production.

What it boils down to is this. If you leave it solely to the free market, you will have chronic underproduction. Period, for the reasons stated above. With that being the case, do you accept the consequences of an unregulated free market? Those will include periodic shortages of the vaccine for susceptable people, including an increase of deaths in infants, the elderly, and the chronically ill.

Do you instead have the government intervene, and guarantee the number of vaccines sold per year? Of course, that means the taxpayers should (remember, I'm a fiscal radical - I believe in balanced budgets, something neither party believes in given their actions ) pay an increased tax for.

Of course, their is a third alternative, come to think about it. You have flu vaccines on a pre-order, subscription basis, just like any other product with a long production time and limited production. However, that means that if I, a healthy adult, prepay, and an elderly patient who is at high risk does not, you end up with a variant of the free market scenario above. A certain number of the elderly will die every time a flu starts spreading abnormally fast, at a level that negates the current level of herd immunity (as in it spreads faster than the slowing affect of the vaccinated).

The medical community finds that unacceptable, the hippocratic oath and such. Modern democratic societies for the most part find it unacceptable, though most seem to find paying for what they want unacceptable also (shameless troll). To successfully implement this free market scenario means that you will have to make a wholesale change to how we view personal responsibility, and compassion. Of course, in a true compassionless, free market paradigm, even if it's just bad luck, you will be out on the street. Most of those who espouse true free markets have no problem with that, until they are the one the discriminatory employer (we will all get old, and if we survive long enough at least partially disabled) or unsympathetic building owner is screwing. That's why I like regulated free markets (even if that is something like jumbo shrimp).

[Ned]

Shawnmmcc, Here is part of the problem, price controls on the purchases by the CDC:

(B) NEGOTIATION OF DISCOUNTED PRICE FOR CURRENT VACCINES.--With respect to contracts entered into under this subsection for a pediatric vaccine for which the Centers for Disease Control and Prevention has a contract in effect under section 317(j)(1) of the Public Health Service Act[247] as of May 1, 1993, no price for the purchase of such vaccine for vaccine-eligible children shall be agreed to by the Secretary under this subsection if the price per dose of such vaccine (including delivery costs and any applicable excise tax established under section 4131 of the Internal Revenue Code of 1986[248]) exceeds the price per dose for the vaccine in effect under such a contract as of such date increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) from May 1993 to the month before the month in which such contract is entered into.

4) QUANTITIES AND TERMS OF DELIVERY.--Under such contracts--
(A) the Secretary shall provide, consistent with paragraph (6), for the purchase and delivery on behalf of States (and tribes and tribal organizations) of quantities of pediatric vaccines for federally vaccine-eligible children; and
(B) each State, at the option of the State, shall be permitted to obtain additional quantities of pediatric vaccines (subject to amounts specified to the Secretary by the State in advance of negotiations) through purchasing the vaccines from the manufacturers at the applicable price negotiated by the Secretary consistent with paragraph (3), if (i) the State agrees that the vaccines will be used to provide immunizations only for children who are not federally vaccine-eligible children and (ii) the State provides to the Secretary such information (at a time and manner specified by the Secretary, including in advance of negotiations under paragraph (1)) as the Secretary determines to be necessary, to provide for quantities of pediatric vaccines for the State to purchase pursuant to this subsection and to determine annually the percentage of the vaccine market that is purchased pursuant to this section and this subparagraph

According to this, the prices for virtually all vaccinations of children are controlled by the this statute. That is around 40%, I presume, of all vaccinations. The prices cannot go up from the prices paid in 1993, plus inflation, regardless of whether the cost to produce has gone up. From what we are told, lawsuits and insurance cost have dramatically driven the costs up - so much so that companies can no longer make any profit selling to the CDC and probably take losses instead.

Also, the CDC seems to be heavily involved in distribution of vaccines. I wonder how this could be since allegedly 90% of the vaccines are distributed privately.

Regardless, it is clear that the profit has been stripped out a vaccine industry so that they must produce only the estimated amount of vaccines or else lose money if the estimates a wrong and they overproduce. One would think that the industry would commit only about 80% of its supply at fixed prices and would keep 20% on reserve to move to regions where there are shortages, but at much higher prices. I don't fully understand this industry (especially since all children vaccines seem to be under price controls yet the CDC press release says that 90% of the vaccine market is private) but the shortages to me can only be the result of government interference in prices and distribution. If there were no restraints on prices and distribution, the industry would find ways to build in reserve capacity and inventory to accommodate on unforseen demand.

Shawn, don't you find it remarkable that prices for children's vaccines are controlled to 1993 prices plus inflation by statute! regardless of cost? I also suspect the CDC or the FDA or both are heavily involved in specifying standards for the vaccines that the CDC purchases. These standards probably prevent innovation in techniques that could reduce costs.

[DAVOUT]

From professionnal experience in the pharmaceutical industry, and other industries (automotive, books, retail), I can tell that the prices controlled by a government NEVER results in losses for the companies concerned. Price control is a very technical subject, and the cost accounting can be, and was, a very creative discipline. When it was suppressed in France, (in 1983?), for all products except the pharmaceutical drugs reimbursed by the social security, it resulted in a decrease of the price index. For the drugs under control, it is generally a trade off between products enabling the companies to show attractive profits.

The recently authorized *generic products* made only of the active molecule, provides an illustration of how it works really. The generic products are generally sold 20% below the trade marked product. Most of the trade marked products have decreased their price by 20%, after a very short time (about 3 months).

[Berzerker]

chegitz -

Why don't I just start quoting from The Revolutionary Worker?

I also linked an article from the Wall Street Journal that echoed the Times, but I see by your "rebuttal" of the Times article the WSJ will be duly ignored as well.

Thx Ned, this notion that vaccines are produced and sold in a free market is *******

[notyoueither]

Originally posted by chegitz guevara
It also has to do with conservatives and their fellow travelors cutting funding for your health care services. They can't ge rid of state health car, cuz it's too popular, but if they cut it to the bone and let it bleed to death, then the pulic will be forced to accept private health care.

Right, considering we spend more per capita on health than all but Germay and the US in the G7. Add the fact that it has not been Conservatives ruling Canada for the last 10 years. I guess if it weren't for those issues, perhaps you'd have a point.

[DinoDoc]

Zing!

[Mordoch]

Originally posted by Ned
According to this, the prices for virtually all vaccinations of children are controlled by the this statute. That is around 40%, I presume, of all vaccinations. The prices cannot go up from the prices paid in 1993, plus inflation, regardless of whether the cost to produce has gone up. From what we are told, lawsuits and insurance cost have dramatically driven the costs up - so much so that companies can no longer make any profit selling to the CDC and probably take losses instead.

Also, the CDC seems to be heavily involved in distribution of vaccines. I wonder how this could be since allegedly 90% of the vaccines are distributed privately.

You're not very bright are you? I'll repeat this for about the third time. The 40% figure involves other vaccines which are ordinarily given to children. Only a small number of flu vaccines were given to children since until just this year, it was not generally recommended as necessary by various government agencies. This means that its under 10% for flu vaccines being purchased by any governmental sources period. I've also demonstrated with 100% certainty that vaccine makers are not compelled to sell to the government, so they would not do so if they actually lost money doing so due to price controlls. Read my links and posts in this thread again for details.

[Imran Siddiqui]

I guess if it weren't for those issues, perhaps you'd have a point.