For example: pharmaceuticals industries aren’t really showing much foresight in the development of new antibiotics.
Giving that selling new antibiotics to most people who might want to buy them is outlawed, I don’t think that’s very surprising.
To give the pharmaceutical industry an incentive to develop new antibiotics it’s necessary to either allow them to sell the antibiotics everyone who wants to buy them or pay them enough money for providing new drugs directly.
Selling them to people would quickly make bacterias develop a resistance to the new antibiotic, making them useless for their purpose (having a way to fight a pandemic from a strain of bacterias that developed a resistance to all available antibiotics).
I agree that this law sinks the profits to the bottom, but this was more or less my point. You can’t expect private profit to match what’s actually needed.
Paying them to develop the drug makes sense if it wouldn’t be their intellectual property after and if it’s cheaper than developing them yourself… it’s still central logistic thought, I think the military always used contractors for mass orders they paid themselves.
My feeling is that on the long term we’re way better off building up the structure to carry on such research in the public sector, but it’s not relevant to the issue.
Paying them to develop the drug makes sense if it wouldn’t be their intellectual property after and if it’s cheaper than developing them yourself…
Why would it make only sense if it wouldn’t be their intellectual property? If the key thing you care about is access to antibiotics that kind of thinking doesn’t make sense.
However if your ideological views bias you to find things besides having antibiotics more important then it turns out that you won’t get new antibiotics.
I notice that I wrote costs, while what I had in mind was more like a… contractor fee. The government pays X to the industry so Y stuff gets done. The government owns the Y stuff it paid for.
I wasn’t expecting a private industry to just do the job at 0 profits for the goodness of their hearts.
I apologise in advance for how much I ended up writing below. My opinions on these themes are based on a number of inferential steps and I did my best to sum it up, because I think that clearing that possible misunderstanding on “costs” still left the problem I was thinking about unmentioned. It also has no real bearing on the issue of central vs individual logistics efficiency.
However if your ideological views bias you to find things besides having antibiotics more important then it turns out that you won’t get new antibiotics.
I can’t really see it as an ideological bias, I think it’s a legit worry about the state of future based on not-ideological considerations.
First, I’m pretty concerned about policies such as “governments paying the cost for industries developing X and then such industries retain the full right to use it and profit from it as if they had shouldered the costs”.
The government sees no return whatsoever. The population suffers a loss as well, since a medication (or X) they paid for is being sold back at them at market price, rather than the production price a government could set, or the lower yet price industries would set if facing competitions.
So it feels like this is the less possible efficient usage a tax-payer could see of his moneys, basically a free handout to private industries.
Paying a contractor fee makes more sense, at least the government can try to produce value from what he paid for more effectively. It still has problems, but I guess it can be a good way to produce more value for the population.
My second issue is that these kind of policies hugely weakens public research over the years.
Governments keep incurring in large expenses year after year, these expenses are likely considered as part of the research budget, but anyone working in the public research doesn’t sees a dime from this, so eventually shifts to private research for lack of work and funds, and the capacity of the nation to produce public research gradually shrinks further and further.
It is the exact opposite of what taxation should do, and corporations of large enough size are basically immune to taxation already. Rather than redistributing wealth you are just concentrating them in the hands of a big private.
A government should evaluate the costs and benefits of research infrastructure in the medium run, build the infrastructure it needs if it’s economically viable, and if not, look for ways to make it happen in the future while negotiating for the better terms it can get with the corporations to develop the antibiotic now, if it’s needed in the short term.
Of course, I have no clue on how to calculate costs and benefits for research infrastructure, and the vague knowledge I heard tells me it’s complicated as hell.
But, if it’s economically viable for a corporation to build their own research lab, I see no way it wouldn’t be so for a government.
(If anyone has detailed knowledge on why this isn’t the case I might change my view on this, but there would still be no reason to not look for the best “price” you can get from corporations for the antibiotics. Why should governments be the only ones not worrying about trying to get the most value from their moneys?)
This way you can get antibiotics, thriving public research, and a population that’s not growing more and more impoverished.
This still might not be important enough to be left without antibiotics in a deadly pandemic.
So of course, if you need the antibiotics now and have no other way that’s equally efficient, negotiating with the corporation on worse terms is acceptable. But it better be an emergency-only policy, not the norm.
Third, I have a problem with the reliability of private research in general, (though not so in fields such as medicine, where the liabilities for missteps are too costly).
If you go look at what research from private industries sustained on subjects such as acid rains, global warming, tobacco and such, it’s clear that reality and standards gets tossed from the window as soon as they become a threat (I actually researched these claims for my thesis, I’m not talking from personal feelings like I mentioned above).
There’s also the problem of intellectual property, that makes a lot more harder for science to be able to pile up if half the stuff I’d need to build on is intellectual property of someone else who acts to maximise its profits. I’m fine with giving royalties and big cash prizes to whoever deserved them, but if you don’t have science that’s public and can be used by everyone, I fear that science eventually just slows more and more.
To clarify: I’m not against private research, the world would be clearly a lot worse off without it and it can produce a lot of improvements for the whole mankind as it did already. But a future with more and more private research and less and less public research looks a lot worse off to me.
Lastly; A lot of this is coming from the background knowledge that, if you look at how the distribution of wealth has been going in the last thirty years, you can see that the wealth of the world is basically being sucked in a whirlpool of large capitals and corporations, with the rest of the population slowly having less and less.
A key cause for it is that anyone large enough can legally stop paying taxes and does so, so he gets to reinvest a 100% of his profits to make more profits, while also receiving funds from governments to cover up large losses (or, in the case we discussed, expenses).
(It’s also pretty frustrating, if large corporations and capitals just payed taxes in the ratios the average citizen does we’d be basically swimming in a huge pile of public research and utility already.)
Anyway, the economic growth these entities are producing isn’t benefiting the general populace enough to compensate just how good these entities are at making bucks at the general expense. If it was enough, we would be seeing the general population getting richer, and the big private entities getting even more richer, but only the second one is happening.
Research shows that economic growth just stops correlating with the population welfare after a certain threshold (plenty of research on this from Wilkinson and Pickett and many others) and what determines the population wellbeing turns out to be the wealth distribution in said nation, which is getting more and more focused everywhere.
So, to get back on my issue with this kind of policies of public funded private research, any transaction that takes public money and hands them to these entities that aren’t giving back enough, just makes the problem worse, and should have some pretty amazing benefits to be considered.
I really have to write a sequence on this. It’s a lot more efficient than occasionally spending a hour to comment on a thread.
The government sees no return whatsoever. The population suffers a loss as well, since a medication (or X) they paid for is being sold back at them at market price, rather than the production price a government could set, or the lower yet price industries would set if facing competitions.
I don’t suffer if I have an antibiotic resistent infection and a company sells a drug to cure it at market price. I suffer if I have an antibiotic resistent infection and there’s no drug available that cures my illness and I die.
You need a lot of ideology to the conclusion that the act of someone selling me a drug that prevents me from dying at market prices makes me suffer.
But, if it’s economically viable for a corporation to build their own research lab, I see no way it wouldn’t be so for a government.
Corporations are a lot better at cutting of wasteful research that doesn’t make proftis then government research labs are. The fact that free market driven enterprise is much effective then government run programs.
Research shows that economic growth just stops correlating with the population welfare after a certain threshold (plenty of research on this from Wilkinson and Pickett and many others) and what determines the population wellbeing
The idea that lifesaving medince doesn’t help population welfare seems very strange to me. Having more corporations that develop medicine for conditions that previously couldn’t be treated as well clearly improve welfare.
As a society we want developing new drugs to be more profitable then laying of researchers and doing stock buybacks because better medicine is one of the ways we can actually translate increased societal wealth into increased population welfare.
I don’t suffer if I have an antibiotic resistent infection and a company sells a drug to cure it at market price. I suffer if I have an antibiotic resistent infection and there’s no drug available that cures my illness and I die.
You need a lot of ideology to the conclusion that the act of someone selling me a drug that prevents me from dying at market prices makes me suffer.
I have to point out that in my last comment I specifically said that negotiating with the private company is the correct choice when the alternative is mass deaths due to the lack of antibiotics. We agree on “death due to infection is worse of having to pay market prices plus public money for development”.
It’s just that I believe “using public moneys to develop X as a private resource” it’s a worse long-term strategy for keeping society supplied of Xs than “use public moneys to develop X as a public resource”, and I’m really not understanding why you assume there is no possible third alternative where I suffer even less because I only have to pay market prices or the costs of development, and not both. (I’m also fine with short term hybrid solutions such as “government pays half of X development costs, private agrees to keep prices at an agreed value to ensure X is easily accessible”, I guess).
Since you accused me twice of coming from a biased and strongly ideological viewpoints while I sticked with practical considerations and arguments, citing no kind of rhetoric or anti-capitalistic moral to justify my position, I start to feel like I’m not the one bringing ideology into this argument.
Corporations are a lot better at cutting of wasteful research that doesn’t make proftis then government research labs are
Corporations are way too good at cutting any research that doesn’t make the most profits. This is a huge problem for research and science, because anything that might lead to huge public benefits and breakthroughs but needs 20 years of expensive research gets ignored and cut.
Also, you focus research on what gets you profit rather than generating utility for mankind.
The fact that free market driven enterprise is much effective then government run programs.
Can you link me any data on this? I had saw research in different textbooks that said that public service was actually matching private enterprise for quality/costs of service in stuff like healthcare, water, light and other commodities, and in retirement investment plans. I’ll try to recover it and link it since I’ll need to write something on this, but I have to locate it first. Or you were referring to other types of programs?
The idea that lifesaving medince doesn’t help population welfare seems very strange to me. Having more corporations that develop medicine for conditions that previously couldn’t be treated as well clearly improve welfare.
The key issue is that economic growth stops correlating too much to the development of lifesaving medicine after a certain point, and stops correlating to the access of the public to lifesaving medicine even faster.
Wealth distribution, instead, correlates with access to such lifesaving medicine a lot more. The population suffers not because there is no lifesaving medicine to be bought, but because the market price of lifesaving medicine can be unreasonably high and still be the one which generates the most profits.
I’m not managing to find accurate informations of how much antibiotics cost in the US, it seems to be twice or three times what they cost in Europe, and they still seem to be one of the cheap drugs, as I expected (I remember having bought Ofloxacin for 27€, here it’s listed at 80$). Anyway, all the sources I found seem to agree that prescription drugs in the US are basically the most expensive in the world, and by a lot. https://cddep.org/tool/current_prices_antibiotics_class_age/
Companies likely wouldn’t scalp too much on flashy stuff like the antibiotic needed to save the population from flesh eating bacterias due to getting bad press, but poor people in need of “boring less-flashy lifesaving medicines” are currently haiving to make the choice between having medicine or having a roof (If I understand correctly insulin is sold in the US 700$ a dose?).
Corporations can develop all the lifesaving medicines they want, if the optimal profit solution is to sell them at a price only 40% of the population can afford, you won’t nearly see as much benefits for the population than in a system that treats health as a public resource and sets prices to what everyone can afford.
So to link back with
I don’t suffer if I have an antibiotic resistent infection and a company sells a drug to cure it at market price. I suffer if I have an antibiotic resistent infection and there’s no drug available that cures my illness and I die.
You suffer if you have to choose between losing your home/sinking into debt/renouncing lots of things needed for health to afford treatment for the antibiotic resistant infection (which, money wise, actually seems one of the best health problem you can get).
As a society we want developing new drugs to be more profitable then laying of researchers and doing stock buybacks because better medicine is one of the ways we can actually translate increased societal wealth into increased population welfare
This seems like the most expensive way to get new drugs ever. I have to make it so that developing new drugs is one of the most profitable things a company can do with its moneys? Either you pay as a society many times what you’d pay to develop it yourself (remember, you’re paying twice already, first to cover costs with public moneys, second to buy it at market price as a population), or you systematically sink and ban all other things a corporation can do, which I don’t believe would really be a good idea.
Maximising profit isn’t an utility function that can be expected to be efficient at providing utility to the general population. It’s an utility function that doesn’t have public health at all in its parameters.
What kind of unlikely coincidence is needed to make so that maximising profit ends up, by basically mere chance, to also improve public health more than a system with as utility function to actually improve public health?
Giving that selling new antibiotics to most people who might want to buy them is outlawed, I don’t think that’s very surprising.
To give the pharmaceutical industry an incentive to develop new antibiotics it’s necessary to either allow them to sell the antibiotics everyone who wants to buy them or pay them enough money for providing new drugs directly.
Selling them to people would quickly make bacterias develop a resistance to the new antibiotic, making them useless for their purpose (having a way to fight a pandemic from a strain of bacterias that developed a resistance to all available antibiotics).
I agree that this law sinks the profits to the bottom, but this was more or less my point. You can’t expect private profit to match what’s actually needed.
Paying them to develop the drug makes sense if it wouldn’t be their intellectual property after and if it’s cheaper than developing them yourself… it’s still central logistic thought, I think the military always used contractors for mass orders they paid themselves.
My feeling is that on the long term we’re way better off building up the structure to carry on such research in the public sector, but it’s not relevant to the issue.
Why would it make only sense if it wouldn’t be their intellectual property? If the key thing you care about is access to antibiotics that kind of thinking doesn’t make sense.
However if your ideological views bias you to find things besides having antibiotics more important then it turns out that you won’t get new antibiotics.
I notice that I wrote costs, while what I had in mind was more like a… contractor fee. The government pays X to the industry so Y stuff gets done. The government owns the Y stuff it paid for.
I wasn’t expecting a private industry to just do the job at 0 profits for the goodness of their hearts.
I apologise in advance for how much I ended up writing below. My opinions on these themes are based on a number of inferential steps and I did my best to sum it up, because I think that clearing that possible misunderstanding on “costs” still left the problem I was thinking about unmentioned. It also has no real bearing on the issue of central vs individual logistics efficiency.
I can’t really see it as an ideological bias, I think it’s a legit worry about the state of future based on not-ideological considerations.
First, I’m pretty concerned about policies such as “governments paying the cost for industries developing X and then such industries retain the full right to use it and profit from it as if they had shouldered the costs”.
The government sees no return whatsoever. The population suffers a loss as well, since a medication (or X) they paid for is being sold back at them at market price, rather than the production price a government could set, or the lower yet price industries would set if facing competitions.
So it feels like this is the less possible efficient usage a tax-payer could see of his moneys, basically a free handout to private industries.
Paying a contractor fee makes more sense, at least the government can try to produce value from what he paid for more effectively. It still has problems, but I guess it can be a good way to produce more value for the population.
My second issue is that these kind of policies hugely weakens public research over the years.
Governments keep incurring in large expenses year after year, these expenses are likely considered as part of the research budget, but anyone working in the public research doesn’t sees a dime from this, so eventually shifts to private research for lack of work and funds, and the capacity of the nation to produce public research gradually shrinks further and further.
It is the exact opposite of what taxation should do, and corporations of large enough size are basically immune to taxation already. Rather than redistributing wealth you are just concentrating them in the hands of a big private.
A government should evaluate the costs and benefits of research infrastructure in the medium run, build the infrastructure it needs if it’s economically viable, and if not, look for ways to make it happen in the future while negotiating for the better terms it can get with the corporations to develop the antibiotic now, if it’s needed in the short term.
Of course, I have no clue on how to calculate costs and benefits for research infrastructure, and the vague knowledge I heard tells me it’s complicated as hell.
But, if it’s economically viable for a corporation to build their own research lab, I see no way it wouldn’t be so for a government.
(If anyone has detailed knowledge on why this isn’t the case I might change my view on this, but there would still be no reason to not look for the best “price” you can get from corporations for the antibiotics. Why should governments be the only ones not worrying about trying to get the most value from their moneys?)
This way you can get antibiotics, thriving public research, and a population that’s not growing more and more impoverished.
This still might not be important enough to be left without antibiotics in a deadly pandemic.
So of course, if you need the antibiotics now and have no other way that’s equally efficient, negotiating with the corporation on worse terms is acceptable. But it better be an emergency-only policy, not the norm.
Third, I have a problem with the reliability of private research in general, (though not so in fields such as medicine, where the liabilities for missteps are too costly).
If you go look at what research from private industries sustained on subjects such as acid rains, global warming, tobacco and such, it’s clear that reality and standards gets tossed from the window as soon as they become a threat (I actually researched these claims for my thesis, I’m not talking from personal feelings like I mentioned above).
There’s also the problem of intellectual property, that makes a lot more harder for science to be able to pile up if half the stuff I’d need to build on is intellectual property of someone else who acts to maximise its profits. I’m fine with giving royalties and big cash prizes to whoever deserved them, but if you don’t have science that’s public and can be used by everyone, I fear that science eventually just slows more and more.
To clarify: I’m not against private research, the world would be clearly a lot worse off without it and it can produce a lot of improvements for the whole mankind as it did already. But a future with more and more private research and less and less public research looks a lot worse off to me.
Lastly; A lot of this is coming from the background knowledge that, if you look at how the distribution of wealth has been going in the last thirty years, you can see that the wealth of the world is basically being sucked in a whirlpool of large capitals and corporations, with the rest of the population slowly having less and less.
A key cause for it is that anyone large enough can legally stop paying taxes and does so, so he gets to reinvest a 100% of his profits to make more profits, while also receiving funds from governments to cover up large losses (or, in the case we discussed, expenses).
(It’s also pretty frustrating, if large corporations and capitals just payed taxes in the ratios the average citizen does we’d be basically swimming in a huge pile of public research and utility already.)
Anyway, the economic growth these entities are producing isn’t benefiting the general populace enough to compensate just how good these entities are at making bucks at the general expense. If it was enough, we would be seeing the general population getting richer, and the big private entities getting even more richer, but only the second one is happening.
Research shows that economic growth just stops correlating with the population welfare after a certain threshold (plenty of research on this from Wilkinson and Pickett and many others) and what determines the population wellbeing turns out to be the wealth distribution in said nation, which is getting more and more focused everywhere.
So, to get back on my issue with this kind of policies of public funded private research, any transaction that takes public money and hands them to these entities that aren’t giving back enough, just makes the problem worse, and should have some pretty amazing benefits to be considered.
I really have to write a sequence on this. It’s a lot more efficient than occasionally spending a hour to comment on a thread.
I don’t suffer if I have an antibiotic resistent infection and a company sells a drug to cure it at market price. I suffer if I have an antibiotic resistent infection and there’s no drug available that cures my illness and I die.
You need a lot of ideology to the conclusion that the act of someone selling me a drug that prevents me from dying at market prices makes me suffer.
Corporations are a lot better at cutting of wasteful research that doesn’t make proftis then government research labs are. The fact that free market driven enterprise is much effective then government run programs.
The idea that lifesaving medince doesn’t help population welfare seems very strange to me. Having more corporations that develop medicine for conditions that previously couldn’t be treated as well clearly improve welfare.
As a society we want developing new drugs to be more profitable then laying of researchers and doing stock buybacks because better medicine is one of the ways we can actually translate increased societal wealth into increased population welfare.
I have to point out that in my last comment I specifically said that negotiating with the private company is the correct choice when the alternative is mass deaths due to the lack of antibiotics. We agree on “death due to infection is worse of having to pay market prices plus public money for development”.
It’s just that I believe “using public moneys to develop X as a private resource” it’s a worse long-term strategy for keeping society supplied of Xs than “use public moneys to develop X as a public resource”, and I’m really not understanding why you assume there is no possible third alternative where I suffer even less because I only have to pay market prices or the costs of development, and not both. (I’m also fine with short term hybrid solutions such as “government pays half of X development costs, private agrees to keep prices at an agreed value to ensure X is easily accessible”, I guess).
Since you accused me twice of coming from a biased and strongly ideological viewpoints while I sticked with practical considerations and arguments, citing no kind of rhetoric or anti-capitalistic moral to justify my position, I start to feel like I’m not the one bringing ideology into this argument.
Corporations are way too good at cutting any research that doesn’t make the most profits. This is a huge problem for research and science, because anything that might lead to huge public benefits and breakthroughs but needs 20 years of expensive research gets ignored and cut.
Also, you focus research on what gets you profit rather than generating utility for mankind.
Can you link me any data on this? I had saw research in different textbooks that said that public service was actually matching private enterprise for quality/costs of service in stuff like healthcare, water, light and other commodities, and in retirement investment plans. I’ll try to recover it and link it since I’ll need to write something on this, but I have to locate it first. Or you were referring to other types of programs?
The key issue is that economic growth stops correlating too much to the development of lifesaving medicine after a certain point, and stops correlating to the access of the public to lifesaving medicine even faster.
Wealth distribution, instead, correlates with access to such lifesaving medicine a lot more. The population suffers not because there is no lifesaving medicine to be bought, but because the market price of lifesaving medicine can be unreasonably high and still be the one which generates the most profits.
I’m not managing to find accurate informations of how much antibiotics cost in the US, it seems to be twice or three times what they cost in Europe, and they still seem to be one of the cheap drugs, as I expected (I remember having bought Ofloxacin for 27€, here it’s listed at 80$). Anyway, all the sources I found seem to agree that prescription drugs in the US are basically the most expensive in the world, and by a lot. https://cddep.org/tool/current_prices_antibiotics_class_age/
Companies likely wouldn’t scalp too much on flashy stuff like the antibiotic needed to save the population from flesh eating bacterias due to getting bad press, but poor people in need of “boring less-flashy lifesaving medicines” are currently haiving to make the choice between having medicine or having a roof (If I understand correctly insulin is sold in the US 700$ a dose?).
Corporations can develop all the lifesaving medicines they want, if the optimal profit solution is to sell them at a price only 40% of the population can afford, you won’t nearly see as much benefits for the population than in a system that treats health as a public resource and sets prices to what everyone can afford.
So to link back with
You suffer if you have to choose between losing your home/sinking into debt/renouncing lots of things needed for health to afford treatment for the antibiotic resistant infection (which, money wise, actually seems one of the best health problem you can get).
This seems like the most expensive way to get new drugs ever. I have to make it so that developing new drugs is one of the most profitable things a company can do with its moneys? Either you pay as a society many times what you’d pay to develop it yourself (remember, you’re paying twice already, first to cover costs with public moneys, second to buy it at market price as a population), or you systematically sink and ban all other things a corporation can do, which I don’t believe would really be a good idea.
Maximising profit isn’t an utility function that can be expected to be efficient at providing utility to the general population. It’s an utility function that doesn’t have public health at all in its parameters.
What kind of unlikely coincidence is needed to make so that maximising profit ends up, by basically mere chance, to also improve public health more than a system with as utility function to actually improve public health?