wo markets – the automobile market in the U.S. and the healthcare market in England – make interesting blog fodder this morning for free marketeer and big government junkie alike.
First, to the automakers, with the NYT reporting of General Motors:
G.M., the world’s largest automaker for decades, said Tuesday that it was in such dire straits that it would deeply cut jobs, factories, brands and executive pay as part of its plea to get $12 billion in federal loans and an additional $6 billion line of credit. …
G.M.’s president, Frederick A. Henderson, said the company would be insolvent if it did not receive federal assistance, including an infusion of $4 billion in cash before the end of the year.
“Absent support, frankly the company simply can’t fund its operations,” Mr. Henderson said in a call with reporters.
To which I say, why did it take having to grovel before the US taxpayers before you would promise to do what you should have done years ago on your own, Mr. Henderson?
Had GM dealt with its bloated workforce, eliminated costs associated with keeping Buick, GMC, Saturn et. al. afloat, and stopped paying its leadership losership as if they were actually accomplishing something, insolvency wouldn’t be just around the corner and Henderson wouldn’t be begging for $14 billion.
This is both a troubling and a glorious moment for any free marketer.
It’s troubling because we’re seeing the desperate lust for government money accomplishing what the free market should have accomplished on its own. And it’s glorious because we are seeing an admission by one of the world’s largest corporations that it is NOT anywhere close to the free market, and it’s killing them. Or it should be killing them … they may yet get hooked up to financial life support.
And speaking of life support, that takes us to another NYT article, this one a much more troubling tale of government’s influence on the free market.
RUISLIP, England — When Bruce Hardy’s kidney cancer spread to his lung, his doctor recommended an expensive new pill from Pfizer. But Mr. Hardy is British, and the British health authorities refused to buy the medicine. His wife has been distraught.
“Everybody should be allowed to have as much life as they can,” Joy Hardy said in the couple’s modest home outside London.
If the Hardys lived in the United States or just about any European country other than Britain, Mr. Hardy would most likely get the drug, although he might have to pay part of the cost. A clinical trial showed that the pill, called Sutent, delays cancer progression for six months at an estimated treatment cost of $54,000.
But at that price, Mr. Hardy’s life is not worth prolonging, according to a British government agency, the National Institute for Health and Clinical Excellence. The institute, known as NICE, has decided that Britain, except in rare cases, can afford only £15,000, or about $22,750, to save six months of a citizen’s life.
This is a tragic but familiar type of real life story that girds our loins as we fight against the Dems’ drive to impose universal health care in the US. But wait, there’s more:
Drug and device makers, which once routinely denounced the British for questioning product prices, have begun quietly slashing prices in Britain to gain NICE’s coveted approval, especially because other nations are following the institute’s lead. Companies have said that they will consult with NICE to help determine which experimental compounds enter the final stage of clinical trials, so the British agency’s officials will soon influence which drugs enter the market in the United States.
The British government created NICE a decade ago to ensure that every pound spent buys as many years of good-quality life as possible, but the agency is increasingly rejecting expensive treatments. The denials have led to debate over what is to blame: company prices or the health institute’s math.
After seeing the auto execs fly to DC in their three private jets and looking at Wall Street execs rake in hundreds of millions as their companies fail beneath their incompetent feet, there’s no doubt in my mind that there’s more lurking behind the cost of pharmaceuticals than legitimate R&D expenses.
Government has no moral authority to use the lives and quality of life of citizens as bargaining chips in a price war; that’s verboten. While the cruel effectiveness of NICE can’t be ignored, we free marketeers must realize that whatever NICE is accomplishing, it is not doing it in a free market. Access to pharmaceuticals is highly regulated, and the companies are using that to their advantage.
If there were a free global market for these drugs (with only patents protected), then we could take our prescription to Canada or Mexico or Khartoum for filling, picking the market where Pfiser or Glaxco offers the best price. And if that were to happen, the global price would quickly fall to the best price. That price would support needed R&D and salaries at the level necessary to provide effective managers, but it would cut out excesses.
Meanwhile, Bruce Hardy will die a little earlier and his widow will be not just sad but rightfully very angry.