Comment by codexon | Hacker News Reader

Comment by codexon | Hacker News Reader

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The reading of free market theory with which most people, including its founder, would agree, is one where the goal is to maximize utility, not wealth. This is a vitally important distinction, and one that the layperson often overlooks.

I would argue that human life is not limitless in utility and the free market establishes a price range on it.

Like it or not, there is a price tag on the utility of a human life. If you need to spend 100k per year on drugs to live and you cannot make 100k per year, then the free market has decided that your life is not worth the cost because you are not creating 100k worth of value to trade 100k worth of drugs you are taking out of the market.

I don't think it is reasonable to say that a market in which you arbitrarily decide that a human life has unlimited utlity is a "free" market at all. We can all agree that jacking up the price of a life-saving drug to save more money is despicable, but we would be lying to ourselves if we pretended this wasn't part of the free market.

The sentence "If you need to spend 100k per year on drugs to live and you cannot make 100k per year, then the free market has decided that your life is not worth the cost because you are not creating 100k worth of value to trade 100k worth of drugs you are taking out of the market" is simply not true.

The free market doesn't say anything about the worth of a life being only equal to how much an individual can earn. It says the market price of something is equal to what people are willing to pay for it. We have things like insurance that allow us to have more medical care than we could afford as individuals, and that is completely within the concept of a free market.

I did not mention insurance to simplify the discussion. Why would I bother listing all the possible situations that don't even change the outcome?

Of course you can buy insurance as a sort of reverse lottery to cover your costs. But you paid into that insurance and it is not required to cover everything. The co-pays/insurance can also bankrupt you.

And my main point still stands. If you cannot afford the cost of life saving medication, with or without insurance, then the free market has decided that your life is worth less than the cost of medication.

Saying the free market doesn't put a cost on human life and that it doesn't encourage price gouging is simply false.

I suppose the statement you are latching onto is where I said that it is never economically optimal to allow someone to die in exchange for higher profit, so allow me to clarify.

In this case, it seems nearly impossible to make a concrete case that links this monopolistically-determined price increase to something that comes close to morally justifying the potential loss of human lives.

And as we know, pharma is not a free market in general, and is certainly not in this specific case, so the idea of the free market setting the price on lives seems inapplicable here.

I don't see how pharma is not a free market in this case.

The drug in question isn't even protected by a patent anymore. Other companies are free to create a generic version of it.

Government regulation has nothing to do with this. The free market has everything to do with this. The price of a life saving drug is worth either all your money or however much the seller wants to charge for it, as decided by the free market.

One of reasons Turing paid $55 million for Daraprim, rather than just produce the chemical compound pyrimethamine, is because it's an approved Medicare drug.

I'm not old enough to use medicare so I don't know the details.

But I am willing to bet that if someone started making a cheaper generic version of Daraprim, it would put on the approved list. The reason pyrimethamine isn't on the list is because no one wanted to make a generic version that hardly anyone uses for $1 per pill.

And even if it wasn't, the drug was being sold for $1 per pill just a few years ago. You can easily pay that without any insurance at all.

If you do some research into this particular medicine, you will see that there are clear, non-free market roadblocks to producing a generic version.

I looked into it and I don't find any.

It is not patented, and no law forces you to only use the brand Daraprim. If someone created a generic replacement, it would be on the fast track to be approved like every other generic.

The synthesis method is even listed publicly.

https://pubchem.ncbi.nlm.nih.gov/compound/4993#section=Use-a...

The only roadblock to a generic version was because no one wanted to compete with $1/pill.

FDA information:

http://www.accessdata.fda.gov/scripts/cder/ob/docs/obdetail....

http://www.accessdata.fda.gov/scripts/cder/ob/docs/patexclne...

There are no unexpired patents for this product in the Orange Book Database.

There is no unexpired exclusivity for this product.

What do you think it would it reasonably cost to setup a manufacturing line for pyrimethamine and get approval to sell it as a generic in the US?

Look around the responses for the notion of controlled access to the drug, and the obstacles it imposes on putting out a generic.

You keep saying generic. Daraprim is a generic, which has a government instituted monopoly, making it not a subject to free market.

Others could go through the process to be Medicare approved, but that doesn't change that it's not subject to a free market.

I don't think you or ken47 have more than a layman's understanding of the subject.

Daraprim is a brand name. Pyrimethamine is the active ingredient.

When you create a generic, it must be checked that it is roughly equivalent to the approved version. Meaning there are no impurities and you digest the drug about the same rate which is determined mostly by the inactive ingredients. This process is relatively fast, often taking 1 year or less compared to the decades it takes to approve a new drug. And if you are going to be saving medicare millions of dollars, you can bet it is going to be put at the top of their todo list and will probably be tested within days.

To say that this is a government monopoly because you can't sell your drug from day 0 without any testing is quite a stretch.

Right - Exactly. Pharma drugs are granted monopolistic power by the government. Or even duopolistic power. That's exactly what ken47 and I are saying.

To say that a market, which is regulated with government-granted monopolistic or duopolistic power, is a free market is quite a stretch.

It is becoming clear to me that you aren't even bothering to read what I wrote. So this is going to be my last reply.

Generics are extremely easy, cheap, and fast to pass approval.

Needing a minimal amount of time to check that your drug is roughly equivalent to an existing drug is NOT a monopoly.

I did read what you wrote:

https://news.ycombinator.com/item?id=10255578

>I don't see how pharma is not a free market in this case.

It's a monopoly because it has government-granted monopolistic power. Generics can go through the approval process and be granted similar power, making a duopoly.

That doesn't change the fact that it is a monopoly right now and definitely not a free market. Seems like someone has a case of confirmation bias.

This is a monopoly, which is, by definition, not subject to the price discovery mechanism of the free market.

If you mean that eventually, some sort of force will break up the monopoly and find the true free market price point at the intersection of supply and demand, that is cold comfort to those who may die before that state transition completes.

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