The article touches on one of the risks to the health care industry today, at least here in the US:
In many cases, the pharmaceutical companies are making billions by selling drugs which merely reduce undesired symptoms. But do not CURE the underlying problem. And the symptom reduction only lasts while the user continues to buy and consume the drug. Therefore, in many cases, these companies have a strong financial incentive to NOT cure a disease, instead, to prolong it and only sell palliatives. Government funding and government directed research should be one of the ways we ensure that we have people actively trying to CURE diseases. It's a classic example of an area where government can do something better than business, because there does not have to be a profit motive. Just a collective desire to reduce human suffering.
This also touches on why it's important to vote carefully in US presidential and congressional elections. Because certain political groups cater to the Big Pharma companies. A vote for them is almost certainly a vote towards a world where there are more palliatives than cures. Where even new forms of ill health can just be considered new "markets" or new ways to increase profits.
I hear this argument all the time and it ignores one fundamental fact: there is more than one large pharmaceutical company and they don't all make $disease_x_treatment.
That one company makes billions selling a treatment for a disease has no bearing on a competing company making a cure for that disease and cornering the market. If anything, it's the very definition of a market-driven solution to a problem.
Now, it's true that there are diseases which are so rare that it's not commercially worth developing a cure, and perhaps government funding is useful in that case but that's a completely different topic.
"That one company makes billions selling a treatment for a disease has no bearing on a competing company making a cure for that disease and cornering the market."
But it's actually more efficient to develop a treatment for the second company.
It's better to share an extremely big market with a competitor than to corner it while making it much smaller. The goal is not to destroy all competition, it's to make more money.
Yes, but what if you have no presence at all in that extremely big market?
In addition to the big ones, there are dozens of smaller companies with the cash and the experience in drug development that would jump at the opportunity to cure type 1 diabetes. Unless the risks vastly outweigh the rewards, which seems to have been the case here.
If you have "no presence at all" then you either have no money, in which case you can't really afford entering it (in this case, anyway), or you have the money, but then the above rules still apply. Effectively it would be better to market your mediocre product to physicians than to kill the cash-cow.
Also, large risks are actually typical for this type of research. It's expensive and risky, so it has to give really large rewards. Research for completely new cures is even more risky and expensive, and the rewards are smaller.
Google had no presence at all in the spreadsheet market in 2005. I guess they really couldn't afford to enter the spreadsheet market.
Too bad, because if google had money, and the above rules didn't apply, then google might create a free spreadsheet web service that competes with MS Excel even at the risk of destroying a gigantic cash cow owned by somebody else.
Software doesn't require clinical trials before it is approved for use. So this argument really doesn't convince me; the capital bar to new products in the medical field is truly staggering.
It's not significantly cheaper or less risky than developing and deploying a completely new type of car or space ship. So Tesla and SpaceX should not exist.
Developing a drug is also not cheaper than developing a new type of computer chip for use in tablet computers aimed at disrupting the PC market (all attempts thus far have been failures). So by your logic, Apples A4 chip should not exist.
Amazon received about $100 million at their IPO, and considerable pre-IPO money in the hopes of disrupting retail. Also a very risky proposition, which by your logic should never have occurred.
Google is trying to get 100% of the spreadsheet market with the goal of selling ads and maybe some corporate subscriptions.
If successful, they will destroy a vastly larger market (commercial spreadsheet software). Google would rather have 100% of a small pie than 0% of a big pie.
Similarly, Diabetes Cure, Inc would rather have 100% of the diabetes cure market than 0% of the insulin market, even if the latter market is bigger.
The big companies that already have treatments for diabetes (for example) definitely have an interest in not curing it, but a small startup would be happy to make millions destroying a multibillion dollar industry.
People upvoting this are dreamers as that industry costs a phenomenal amount of money to put something through trials.
Millions is a trivial amount on what you could throw down the drain and end up with no actual product. It's not vulnerable to a startup as a startup can't practically enter that market. You'd need to be producing something else first.
And small? Not gonna cut it.
Something that works on mice and even something that looks in the lab to cure the disease often doesn't work in trials and doesn't beat the placebo effect.
And, yeah, drug development is high risk. In other news, the sky is still blue.
Type 1 diabetes is still a pretty big market even if you had a one shot cure. There are hundreds of thousands of type 1 diabetics. If they pay a thousand dollars each (a steal at that price), that's hundreds of millions of dollars. For comparison, there are a few thousand people with CML, but that didn't stop Gleevec from being developed for it (it's very expensive).
A steal at a thousand dollars ?
I have Type 1 and would consider an actual cure a great deal even if it cost everything I own plus my entire earnings for 10 years.
I believe the story of Lipitor involved Pfizer not being interested, followed by the creation of a startup around it's further development with the company eventually being bought by Pfizer. It then became the top-selling branded pharmaceutical in the world [1]. I guess the world just needs more dreamers like these people.
The small startup doesn't have the 10s to 100s of millions of dollars that it takes to get a drug approved in the US. So they would be happy to do it but are incapable.
more like 1000s of millions. It's incredibly expensive to demonstrate safety and efficacy, and many promising candidates fail at the later stages (after 100s of millions already spent) when the response in humans is different from that of animal models.
I also think that if consumers were actually paying the full direct cost of treatments, they would be a lot less willing to pay for a chronic drug habit instead of a cure.
Selling cures can be profitable too.
Consumers are perfectly able to see and pay for the benefits of a one time solution as opposed to a cheaper chronic solution. That's why they buy cars and houses instead of renting them. The market will deliver what the consumer wants if the consumer were making the spending decisions.
Government can't be somehow better than business at deciding what to fund. Its manipulated by business! The current pattern has evolved in a government funded research environment. Only ending the interference in the normal process of making decisions at the consumer level can fix this problem.
I agree with a large extent to what you're saying, but I don't like the way you've used it as a platform to presnt an anti-government opinion.
In the UK we have a government body http://en.wikipedia.org/wiki/NICE which oversees which treatments the NHS can provide. This is another way of avoiding paying for treatments rather than cures.
I suspect both a market-based approach, and a single-buyer approach can work. In the US you have a weird government supported insurance industry driven approach with leads to the worst of both worlds.
government is coercion, the use of force against peaceful people. I can't imagine why that would do anything but destroy. People look at what escapes destruction as if government created it.
yes, we have a weird government supported insurance industry driven approach that is quite distortive and destructive. I am fully in favor of ending it and letting peaceful people make their own choices.
Sorry I don't buy this. When it comes down to it, society in itself is coercion. If you don't like that you can go and live on the moon, but whilst you live with and near other people, coercion will exist.
The problem is to accept coercion and discover its most beneficent form, not eliminate it.
Most part of society doesn't involve coercion. Most of us don't go around threating people with murder because we believe it to be wrong. If most men are criminal, we wouldn't be able to have a civilization.
What people really should be striving for is voluntary alternatives to coerciveness measures, not trying to find the best form of coercion.
it is possible for people to voluntarily cooperate. they can do so in matters of mutual defense and many other things. THAT is what civilization depends upon, as a matter of fact.
In fact, this is exactly how most people live their lives. They wouldn't think of using force against others, except when it comes to defending themselves and the people and things they care about from those who use force against them.
But when people get together in a group, they suddenly feel they aren't bound by the same standards. They somehow acquire rights beyond simple self defense. And history is littered with corpses as a result.
coercion is not necessary to cooperate, to have a society. coercion IS necessary to take advantage others. that does take the use of force. people don't seem to go along with being abused willingly.
The best health advances of all time were developed by passionate, and sometimes uneducated, volunteers -- people who were not working for a profit motive, but for a good-of-all motive. Case in point: the discoverer of penicillin, and the inventor of the vaccine, the inventor of the public blood bank, and on, and on, and on.
Inventing then was (arguably) less costly and technical than it is now, because those were low-hanging fruit. A lot of the low-hanging fruit has probably been discovered by now, though we can't be sure, meaning that future research aims at higher-hanging fruit and so, metaphorically, the would-be inventors need ladders.
These people need help, not profit, because profit isn't what motivates them anyway.
Somehow it seems that the profit motive in pharmaceuticals motivates good science, but targeted at relatively strange things. "Lifestyle" drugs are huge: everyone wants the next Viagra, basically. Perhaps not surprising, because recreational drugs have always been popular, and the "fluff" end of legal pharmaceutical development is the part that sort of bleeds into recreational, since it tends to target something closer to "enhancing" the lives of already fairly healthy people with money, rather than "treating" the ill.
Viagra was discovered by accident (it was a heart medicine that didn't work out). And I've never understood why it's sneered at. Are there really that many people out there who could face no sex again ever and shrug it off? I think that would be utterly soul-crushing, worse than most of the diseases they have charity walks and telethons for.
They don't rant about it because it solves a truly-no-sex scenario, but because it's essentially a recreational drug for the majority of users.
I think the ability to have sex is at least as important as the ability to not piss yourself (e.g. incontinence medication) if not more, but still, its profit center comes from its recreational use. That's why the drug companies love it.
Because there is no reason to believe that the % of men who have true ED matches up with the amounts of Viagra sold; because I've known many young men who talk about getting drunk or high and taking it, and because their companions agreed or in the least were not surprised; because the market for it online seems to be mostly young, healthy men who want to have greater stamina, not who have anything dysfunctional to begin with...
You don't see the tremendous amount of selection bias in your sample?
Very quickly: people who need viagra don't like to talk about it, unlike drunken frat boys. The online market is targeting men who can't get it from their doctor because they don't have ED. That doesn't mean the vast majority of viagra users aren't suffering from ED, it just means that online ads are targeting a niche market.
Yes, exactly: if pharma is good business, and not philanthropy, then they have to focus on the people who will pay the most, the most readily, and the most often. End of story.
Case in point: I'm an American who lives in Vienna, Austria, and I have recurring upper-respiratory/immune system problems.
Here, I am treated with a so-cheap-it's-almost-free immune system booster called Broncho Vaxom. It's nothing but dead bacteria, but it's extremely effective (essentially an oral vaccine).
It's used to save lives of children in the poorest of nations -- but it's not available in the US, because it's not profitable, whereas continuous rounds of antibiotics are.
Coral snake antivenom is a similar thing - the last manufacturer left a supply of a few years that is now running out, but the process for approving a new manufacturer for the same drug is so expensive that the market won't support it.
So first responders in Florida have a problem. No coral snake antivenom.
A similar market situation applies to flu shots.
The current system favors "maintenance pharmaceuticals", not cures. Who wouldn't prefer to have a cash cow that costs the customer a few hundred dollars every month for the rest of their life, in comparison with something that actually cured them? A cure isn't very lucrative at all.
Generally, free marketeers protest that this isn't true, in the face of all evidence I can see, but look at the business logic; it's inescapable.
A free marketeer, as you say, would say that the reason nobody is making more antivenin is because the "process for applying" is so expensive - but of course, there has to be quality control, and more importantly, there's every reason to believe that the manufacture would be more expensive than the applying.
Govt regulation is used as a scapegoat. The market for creating this product is just not desirable, because snake bites are extremely rare compared to just about every other medical malady. There was a reason the original manufacturer willingly gave it up in the face of no competition.
Public health is a public concern, and should be funded with public money. It is cheaper in the long run because of increasing working years/tax dollars, and reducing bankruptcies, and reducing the number of orphans, etc.
Even Mr Invisible Hand, Enlightened Self-Interest himself wrote that the whole edifice of his economic philosophy had to rest on the foundation of respect for human life -- and compassion: http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments
I am not against government or rules. I am against the idea that coercion is the means. Voluntary cooperation, not the use of force, is the means by which we create solutions to all sorts of problems.
Health is no different. It suffers over the long term when people think the use of force to get some short term benefit.
Somehow we live our lives with the understanding that forcing those around to do what we want would destructive, even if it was somehow benevolent. But collectively, we've convinced ourselves that this cannot be the case.
Perhaps it is because the dominant opinion is actually propagated with our own money even if we don't agree and alternative perspectives buried by the mesh of financing and media access of government.
Yes, voluntary compliance with regulations works so well to preserve the Commons - it was clearly in BP's interest to comply with regulations in the Gulf, for instance, and clearly in Goldman-Sachs's interest to preserve the global financial structure. Only idiots would choose short-term savings or profit-taking over long-term global stability, after all; enlightened self-interest will take care of everything!
I like your overall philosophy that coercion is wrong, and in principle I agree with it. I wish that human nature didn't contradict it. Sadly, on every hand I see that actual, real live human beings must be coerced to do good if even the slightest amount of consistency is required.
I'm not talking about voluntary compliance to government regulation.
I'm talking about regulation and government freely agreed to by people when they decide to engage in an activity in an area. And these rules should be decided upon by those whose property is at stake, not by people who just collect tax revenue off in Washington.
The problem is that no system of property has been worked for territorial waters. So no one has any direct financial stake or right to investigate and sure over pollution from rivers. That must wait until the government decides to give it its fully divided and compromised attention.
Human beings only need to be coerced when they fail to live up to their agreements or when they violate the rights of others. But that is not the wrong use of force I seek to stop. Its authorized by your human rights and by the contracts people freely agree to.
Beyond that, coercion is destructive and should be avoided. There is no right that authorizes its use.
no, I implying that if there were owners with a much more direct interest in the future well being of what they own than some distant short-term oriented politician, had set the rules instead of the government, they would have done a BETTER job of regulating what was going.
The government regulates tightly after a disaster and less tightly as memories fade and lobbyists start manipulating them. Politicians will never be as consistently interested in the wellbeing of the gulf or anything else as those with a more direct interest. Which is why the government agree to a ridiculous limit of $75 million on total liability for drilling, something an owner never would have done.
Its the same story over and over, in industry after industry. Government ignores the risks, disaster strikes, they overreact. And then gradually over time the lobbyists erode every restriction, good or bad.
what people need is the freedom to act and create. government, especially when it takes by force from some to give to others for whatever purpose, distorts the decisions people make
and, as its activities destroy capital, government delays innovation. its easy to point to the things governments have achieved. what the people would have achieved had they been freer is not so easily pointed out.
That's a classic example of an area where government can NOT do better than business, because government sucks at innovation.
There are plenty of companies that are not selling insulin, so they would be interested to be able to sell diabetes cure.
Assuming the chances of developing the cure are reasonably good.
Wow, massive strawman. The government sucks at innovation? Who do you think funded and developed ARPANet? You know, the network we're using to communicate right now. Upon which countless businesses have been built.
Nuclear power? Government. First electronic computer? Government.
Furthermore, when it comes to drug discovery, that 'evil government' has one advantage over businesses, because they have no profit motive. Businesses exist to make money. Period.
No business is going to destroy its market for the sake of the common good. If you're in the business of creating drugs, you aren't going to wipe out a disease with a one-time cure, because drugs are expensive to produce, and palliative treatments are way more profitable.
This is exactly an area where governments do better than businesses, because the reward (improving quality of life) means more votes and support for those in office.
To paraphrase: The government allocates dollars obtained via taxation to the development of military technology, which often finds unintended peaceful uses.
The scientists who develop military technology (weaponized nuclear, a nuclear-proof decentralized communication grid, code braking machines, etc.) are simply hired to build it or to weaponize promising areas of reasearch.
Anyone with lots of money and the desire to develop powerful weapons would have developed the innovations you cite. To credit "government" implies that something about the government (other than money and the desire for weapons) is responsible for the success.
Any dictator could do precisely the same thing with sufficient money. Fortunately for those of us in the US, our economic system results in incredible wealth, and the taxes generated by it can buy lots of weapons tech.
Could anyone please point me to government scientific or technology accomplishments in the last 30 years?
Something that noticeably improved our quality of life.
Something on par with achievements by IBM (Business PC), Microsoft (OS, Office, and other software), Google (search), Apple (smartphones, music, ...), Intel (microprocessors), Pfizer (drugs).
It was surprising to see down-voting just on the basis that you disagree with the idea.
Welcome to groupthink.
You might be right that government can not do better than business, but this particular story is an example of where they can.
If there really "are plenty of companies that are not selling insulin, so they would be interested to be able to sell diabetes cure", none of them has come forward. This might be because the chances of developing are not good enough, but it sounds to me like you are starting from an assumption ("private sector would jump on this is if it was a good idea") and working your way backwards ("therefore this cannot have been a good idea").
Personally, my belief is that the best funding approach is multi-polar. In other words, there should be some government funding, some private sector, and some non-profit foundation funding. Each of these funders has blind spots, and is frightened by some research while others embrace it. The combination allows the entrepreneurial scientist to push their research forward at each stage.
Government sucks at innovation? What are you talking about? Pretty much everything that is basic science is paid by government in every nation. It is govt that gave us the internet, the bomb, and the man on the moon. Virtually every nobel prize in history has been given to people who worked for public universities.
What's wrong with the NSF starting that way? Are they not a significant source of funds for "basic science" research?
Even if you want to be cynical about this issue, haven't we been doing this long enough to know that research for military purposes often translates to advances in non-military applications?
EDIT: and don't get me wrong; I would love to see some shift in the way funds are allocated.
My point isn't that central coordination doesn't work, it was just that central coordination is extremely unsophisticated and is typically not a source of added insight, just a source of funds.
In my experience in academe, researchers tailor their work to what the NSF is funding, not what they consider most interesting/important.
1) Please show me "pretty much everything" that government developed in the last 30 years.
http://news.ycombinator.com/item?id=1465878
2) "Man on the moon" is pretty much useless for us.
3) Government didn't give us Internet as we know it now. Not even close.
Government contributed may be ~1% into Internet (if even that).
Considering how much that contribution costs to taxpayers every year -- government performance looks pretty bleak.
1) I have been working as researcher for the past 12 years or so (cancer and neurobiology). Pretty much everything in the field of medical science is founded mainly by public money: this goes for salary and research money. Private contribution is quite minimal and proximal to zero in basic research.
2) Wut? Do you have any idea on the level of technological transfer that space research brings to your everyday life? This goes from materials that keep your home warm to GPS, really.
3) dude, arpanet is a project of DARPA. WWW is a project of CERN. I got money from DARPA and I study fruitflies for god sake.
1) I see now where misunderstanding is coming from.
I'm stating that government is poor at innovating.
You are stating that government is a good source of funding.
These statements do not contradict to each other.
I agree that government funds lots of projects.
It's just that practical results are not impressive at all.
2) Considering the cost of "Man on the Moon" project, the benefits for us are pretty slim.
If I take from you, say, $10K, and then give you back $3K, I can claim that you should be happy, because I'm helping you by giving $3K. Right?
3) CERN is NOT a government.
Disagree. Individuals (scientists, doctors, lab technicians, inventors) can do the innovating, can do the research. They just need to be paid and given space and tools and time to do it in. Enter government. Government does not need to innovate, just write checks. The problem with the alternative, like a large private corporation, can be that it may not be in their best interests profit wise to pursue a certain line of development. Could reduce their profits. Or at least they can be afraid it might. And they have a fiduciary responsibility to their shareholders. Not necessarily a sense of ethical obligation to their fellow man.
Individuals (scientists, doctors, lab technicians, inventors) can do the innovating, can do the research. They just need to be paid and given space and tools and time to do it in. Enter government. Government does not need to innovate, just write checks.
In principal, you are correct, but you are neglecting one very important point: the government is not a nebulous entity with an endless supply of money. Therefore, the individuals that comprise the government must identify (either directly, or by selecting individuals who are most qualified in a given area of expertise to serve as proxies) the scientists whose ideas, proposals, past productivity, and requests for facilities most warrant funding.
Separating the wheat from the chaff is a non-trivial exercise. It may not be be direct innovation, but I would argue that it is every bit as challenging.
In many cases, the pharmaceutical companies are making billions by selling drugs which merely reduce undesired symptoms. But do not CURE the underlying problem. And the symptom reduction only lasts while the user continues to buy and consume the drug. Therefore, in many cases, these companies have a strong financial incentive to NOT cure a disease, instead, to prolong it and only sell palliatives. Government funding and government directed research should be one of the ways we ensure that we have people actively trying to CURE diseases. It's a classic example of an area where government can do something better than business, because there does not have to be a profit motive. Just a collective desire to reduce human suffering.
This also touches on why it's important to vote carefully in US presidential and congressional elections. Because certain political groups cater to the Big Pharma companies. A vote for them is almost certainly a vote towards a world where there are more palliatives than cures. Where even new forms of ill health can just be considered new "markets" or new ways to increase profits.