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Comment by solatic | Hacker News Reader

Explain this to me: how is it ethical to price discriminate against Western consumers when it comes to video games, but unethical when it comes to prescription drug costs?

It's a bogus argument - any American struggling to afford the high cost of medication in America will tell you that geography is a very poor predictor of affordability. And anybody who has a sizable Steam library can tell you how the summer and winter sales get very expensive, very quickly.

Healthcare should be relatively cheap. Entertainment should be relatively expensive. Prices should be globally stable.

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Ooh, I know this one:

> how is it ethical to price discriminate against Western consumers when it comes to video games, but unethical when it comes to prescription drug costs?

Because you will not die without the hot new video game.

And honestly, although I think charging individuals different drug prices is ethically suspect, I'm ok with charging national health systems (modestly) different prices for drugs. It seems fair to me that relatively rich countries pay more of the R&D costs, because that way we get more drug development in total, which benefits everybody.

That logic applies even more so to entertainment. Whether you set a single global price high or low, you reduce the amount of money available for development costs, meaning fewer and worse games. (And if you set it high, you pointlessly prevent a lot of poorer people from having fun.)

>Because you will not die without the hot new video game.

Could you expand on this? If we are looking at pricing discrimination that still allows them to buy it, then they aren't going to die either way. If it is immoral to use their life to make money, then selling it at any more than cost is immoral, and potentially even selling it at cost is immoral since that cost includes some amount of niceties that aren't required to produce the drug. (does the person making the drug really need to earn that much, couldn't they do with a bit less pay?)

Also, given that even if you fully minimize costs and sell the drug exactly at cost, there are still some who can't afford it, so if you want to maximize the number of people who can afford the drug then pricing discrimination is still preferable. If upping the price in one region lets you lower the price in another (remember, we are already selling it exactly at costs), and the people in the first region has more income to spend on drugs, is that not the far more ethical than demanding it be equal costs to everyone even when people in poorer areas end up being denied the drug due to pricing? In effect, the pricing discrimination is a tax on the richer individuals buying the drugs to allow poorer individuals to buy the drug (within the hypothetical where you are selling it at cost).

I guess even deeper then is the question if the person making the drugs should even be profiting off the work. They need to eat and have a place to sleep, but if they require more than the bare minimum salary possible aren't they now increasing the cost to product the drug, resulting people having to pay more to live, just so they can have more money?

Of course, there is the issue that if they can't make enough money to attract them, then they'll pick a different line of work. Is it wrong or immoral for them to do that? To demand a certain level of compensation or they work elsewhere, even though they could survive off of less money while making the drugs at lower cost? If the end worker can demand a premium despite the impact on the lives of those who depend upon the drug, why can't others involved in the production of the drug?

Overall, it makes a nice sound bite, but I don't understand the actual reasoning implied.

Assuming we're talking about drugs that are necessary for survival (or at least having a normal life) and are either government-granted monopolies or have very limited sources, then drug-sellers selling to individuals can engage in price gouging, which is clearly immoral to me (and most everybody else). If you aren't sure why, there's a big literature on price gouging that should help.

However, one can't price gouge on games. There are infinite games to play, many of them free and a great many more are inexpensive. If people don't get a particular game, they will not die or live a terrible life. So game sellers can price as they please and set reasonable terms without any big ethical issues.

Video games are purely luxury items though. You need access to medication, you don't need access to the latest and greatest games.

Luxury items are already sold using value-based pricing rather than cost-based pricing. If I make $100 and have to pay $10 for a game, that's the same relative value as if I made $1000 and paid $100.

Of course, that doesn't mean you don't feel ripped off if you're paying the higher price. I certainly do when I get charged €60 for a game that in the US costs $60 (which should be €53.54 at current exchange rate).

Economics 101 would tell you that price elasticity is the obvious difference between the two, and that makes a huge difference.

If a game is too expensive, you move to another game or other cheap entertainment. If a drug is expensive, you pray that there's a cheap generic, which in some cases there isn't.

The idea that prices should be globally stable works in the imaginary world where currency conversions hold real income constant, but that's just not true.

Aren't there lots of income-tested healthcare programs?

I don't see anything unethical in offering health insurance at a loss (taxpayer funded) only to poor people.

I think there's a giant qualitative difference in the ethics of price discrimination around medical necessities vs luxury goods.

>Healthcare should be relatively cheap. Entertainment should be relatively expensive.

That's not going to work, people are more willing to spend for a higher standard of healthcare than they are a higher standard of entertainment. In fact the dollar value of one additional year of life is virtually unlimited, if not to the state, to the person whose life it is.

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