Atlas Shrugged: The Mocking

Friday, July 9, 2010


Remember Megan McArdle's assertion that Americans can't have universal health care because high American drug prices subsidize innovation for the world? It was hard to forget because she repeated that mantra for months. When she was asked for the supporting data, she tap-danced and waffled. Finally she acknowledged that she had no evidence, although she later tried to pretend both that she was right because she was confused when she gave that admission and that her "facts" came from sources who lied to her.

Yves Smith of Naked Capitalism reports:
A new and interesting line of attack has been opened against Big Pharma’s defense of its high US prices and its ongoing attacks on Europe and other countries that negotiate discounts. US drugmakers have contended that the rest of the world is effectively free-riding on US research, and that its inability to charge higher prices outside the US limits funding of R&D (ahem, have we forgotten the fact that most really big ailments already have treatments of some sort, making it much less likely that anyone will find a new blockbuster drug?).

But a more granular look at drug pricing within the US shows that drugmakers offer enough discounts here to undermine their attacks on non-US health schemes. And the foreign drug regimes at least assure that everyone in the population is on the same footing, while here, the highest prices fall on those either outside health care plans or in ones without favorable drug pricing, so the burden of higher prices falls disproportionately on lower income people.

Smith quotes the Financial Times, which calls the revelation "an embarrassment for the industry, and notably PhRMA, its powerful Washington, DC-based trade body. In the past PhRMA has argued that Europe’s ill-conceived public policies, including price controls and sluggish regulatory decision-making, have chilled innovation and raised doubts among private investors who help to underwrite research."

McArdle merely parroted whatever Big Pharma told her. They told her what to say, she wrote it down and printed it, and her job was done, except for all the funny posts defending the indefensible. She's a perfect example of the modern journalist, bought and paid for by corporations and without the slightest bit of awareness that they are merely stooges in a giant confidence game.

Big Pharma came out with a study of their own, of course, this one saying that drug price cuts in Europe will harm innovation because there will be less profit for drug corporations. This issue has been discuss a lot as well, since such studies ignore the role of government in drug innovation, as well as how much innovation actually goes on in drug corporations.

I wonder which study McArdle will address, if any. If I were her I'd just let the matter quietly die, but discretion has never been a McArdle virtue--thank goodness.


Kathy said...

I'm pretty sure research done by US Drug companies is subsidized by our Government. Tax breaks and extra long patents, and much more.

Universities do a lot of the drug research and testing, and they, too are subsidized by our taxes.

If Megan were of even average intelligence, she'd be too smart to do the job she has.

Downpuppy said...

The entire set up of US health insurance is a fairly simple oligopoly.

The big insurers & Medicare negotiate "discounts" of about 40% and all the individuals have to pay the full rate.

Of course, what this means is that a procedure that should cost $80 is listed at $200 & paid at $120. Which is fine by the insurers, since the policyholders are paying $175.

It's bone simple, but Megan's ability to ignore the obvious is boundless.

Kathy said...

I read (but where? It was pre-internet days) that it was the creation-growth of the med insurance companies that caused the horrifying rise in medical and drug fees. And, as DPuppy says, it was fine with the medical establishment & insurers, since it was mostly the patient who was gouged, unknowingly.

Before insurance companies were so huge, the "free market" kept prices almost reasonable for middle class people.

Mr. Wonderful said...

If Megan were of even average intelligence, she'd be too smart to do the job she has.

I don't think it's a matter of intelligence. She's basically intelligent. It's worse. It's a matter of character. She'd be unqualified for the job she has if she were more honest, more honorable, more emotionally mature, and less of a craven courtier.

Susan of Texas said...

It just amazes me to see people like Julian Sanchez discuss journalism standards and ethics while they work for propaganda mills. Their ethics are entirely theoretical--they don't seem to understand that personal ethics underlie journalism ethics.