Comments on: Price Controls Create Drug Shortages in Britain http://healthblog.ncpa.org/price-controls-create-drug-shortages-in-britain/ Health Care Policy and Reform Insights | NCPA Fri, 25 May 2012 03:28:24 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: monkeywrench http://healthblog.ncpa.org/price-controls-create-drug-shortages-in-britain/comment-page-1/#comment-65204 monkeywrench Mon, 07 Jun 2010 13:45:21 +0000 http://www.john-goodman-blog.com/?p=10825#comment-65204 So why can't the drug suppliers just withhold the drugs from the Royal Surrey Hospital and sell the drugs to the Germans themselves? With the crazy-quilt of price controls and other regulations, why do any drug suppliers even bother selling to the British market at all? So why can’t the drug suppliers just withhold the drugs from the Royal Surrey Hospital and sell the drugs to the Germans themselves? With the crazy-quilt of price controls and other regulations, why do any drug suppliers even bother selling to the British market at all?

]]> By: John R. Graham http://healthblog.ncpa.org/price-controls-create-drug-shortages-in-britain/comment-page-1/#comment-64614 John R. Graham Fri, 28 May 2010 16:30:07 +0000 http://www.john-goodman-blog.com/?p=10825#comment-64614 What does the Royal Surrey Hospital then do with the profits? Share it as bonuses? I expect that this is one drawback of the "foundation trust" model under government monopoly: It addresses the problem of soft budgeting in a government agency, but introduces a profit motive in the absence of competition. I'm surprised that the Health Services Journal published such research. Most academic journals are not interested in lifting up the carpet like this, which explains why they miss the consequences of perverse incentives in government-run health care. On the other hand, the competitive market is serving the needs of British patients. Because the NHS denies coverage for innovative cancer drugs, patients must buy them for cash, and pharmacies have started a price war. ASDA, the U.K. subsidiary of Wal-Mart started the price war (http://tinyurl.com/377daxw) but others quickly followed (http://tinyurl.com/3xqqhxg). My experience observing the politics of the NHS tells me that advocates of "universal" coverage will soon rise up to demand the practice stop, because it leads to "two-tiered" health care. What does the Royal Surrey Hospital then do with the profits? Share it as bonuses? I expect that this is one drawback of the “foundation trust” model under government monopoly: It addresses the problem of soft budgeting in a government agency, but introduces a profit motive in the absence of competition.

I’m surprised that the Health Services Journal published such research. Most academic journals are not interested in lifting up the carpet like this, which explains why they miss the consequences of perverse incentives in government-run health care.

On the other hand, the competitive market is serving the needs of British patients. Because the NHS denies coverage for innovative cancer drugs, patients must buy them for cash, and pharmacies have started a price war. ASDA, the U.K. subsidiary of Wal-Mart started the price war (http://tinyurl.com/377daxw) but others quickly followed (http://tinyurl.com/3xqqhxg).

My experience observing the politics of the NHS tells me that advocates of “universal” coverage will soon rise up to demand the practice stop, because it leads to “two-tiered” health care.

]]> By: Tom H. http://healthblog.ncpa.org/price-controls-create-drug-shortages-in-britain/comment-page-1/#comment-64447 Tom H. Wed, 26 May 2010 23:44:20 +0000 http://www.john-goodman-blog.com/?p=10825#comment-64447 Ken, just think how different British medicine might be if all the entrepreneurs were incentivized to solve British patient problems instead of other country patient problems. Ken, just think how different British medicine might be if all the entrepreneurs were incentivized to solve British patient problems instead of other country patient problems.

]]> By: Ken http://healthblog.ncpa.org/price-controls-create-drug-shortages-in-britain/comment-page-1/#comment-64439 Ken Wed, 26 May 2010 22:48:10 +0000 http://www.john-goodman-blog.com/?p=10825#comment-64439 Sounds like entrepreneurship is alive, well and thriving in the UK. It's just not directed at NHS patients. Sounds like entrepreneurship is alive, well and thriving in the UK. It’s just not directed at NHS patients.

]]> By: Devon Herrick http://healthblog.ncpa.org/price-controls-create-drug-shortages-in-britain/comment-page-1/#comment-64433 Devon Herrick Wed, 26 May 2010 21:19:47 +0000 http://www.john-goodman-blog.com/?p=10825#comment-64433 Awhile back I ran across a UK-based firm that ran an online pharmacy from the Republic of Seychelles. Being offshore allowed them to sell drugs by mail that came from the U.K. or generic drugs from India, which were not yet available in generic form in Europe, the U.S. and U.K. I suspect this was drug arbitrage. A doctor based in Seychelles would review an online survey and write a prescription. The drugs would be mailed from Seychelles. Awhile back I ran across a UK-based firm that ran an online pharmacy from the Republic of Seychelles.

Being offshore allowed them to sell drugs by mail that came from the U.K. or generic drugs from India, which were not yet available in generic form in Europe, the U.S. and U.K.

I suspect this was drug arbitrage. A doctor based in Seychelles would review an online survey and write a prescription. The drugs would be mailed from Seychelles.

]]> By: Virginia http://healthblog.ncpa.org/price-controls-create-drug-shortages-in-britain/comment-page-1/#comment-64432 Virginia Wed, 26 May 2010 20:40:37 +0000 http://www.john-goodman-blog.com/?p=10825#comment-64432 There's nothing like drug arbitrage to improve margins! I bet there's a special pirate ship docked off the coast of England ready to ferry drugs all over the world! Ahhh! Capitalism at work. There’s nothing like drug arbitrage to improve margins! I bet there’s a special pirate ship docked off the coast of England ready to ferry drugs all over the world! Ahhh! Capitalism at work.

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