It never ceases to amaze me how no matter how clearly and obviously this is just one of those issues that is directly caused by free markets, there is inevitably someone ready to find some damn regulation by the government and blame that instead.
Markets have their place. They are not and should not be treated as the default, sole option.
Seems like vet care is clearly one of those places where markets have a place. I don't think the people will accept socializing the cost of back surgery for someone's dog.
I absolutely blame regulation. When my cat was dying I couldn't even by kidney friendly cat food without an prescription from a licensed professional.
My sincere condolences about your cat. I also had a cat with kidney disease, and the veterinary system was not very helpful about treatment. I had to learn most of it on my own. The "prescription" pet food situation is an example of free market entities subverting regulatory agencies.
"Prescription" pet foods exist only through a selective lack of enforcement by the FDA. The manufacturers make claims that the food treats specific medical conditions. That's a drug claim. By law they would be required to test for efficacy and have it approved as a drug. But the FDA chooses to allow manufacturers to sell pet food that makes drug claims without testing or approval so long as they contract with veterinarians to only sell it under "prescription." It's not a prescription (it's not a drug!), it's a way to skirt regulation.
For kidney disease you want foods high in moisture, moderate in protein and low in phosphorous. You can buy foods that meet these requirements at your pet food store. There are options that are much higher quality than said "prescription" foods hawked by Hills, Royal Canin and the like. They're just not advertised as treating kidney disease because they don't make inappropriate drug claims!
Thanks for the pointer about simply looking for low phosphorous foods, that makes a lot of sense.
I don't see this as a failure of a free market, but failure of policy makers and regulators. Consumer hostile over-regulation regulation the problem to be fixed, not the market entities. Even without businesses, you still have self-interested parties like veterinarians associations pushing for bad regulations.
I also think there is significant contingent of the population and government that is extremely risk adverse, but cost insensitive or ignorant. These are the people who argue that barbers really do need 1500 hours of training to ensure public safety.
Markets have their place. They are not and should not be treated as the default, sole option.