Saturday, December 3, 2011

Current Decline in the Availability of Pharmaceuticals

In the criticism directed at ObamaCare and socialized medicine in general, there were many consequences seen that would be detrimental to the health of men and women. One consequence that wasn’t predicted (as I recall) is occurring now. From what I have seen in various reports recently (listed below), when socialized medicine collides with high levels of government debt, which it must eventually, the results are decidedly unhealthy.

In Greece and Spain, and also in Italy, even in the United States, we are seeing disruptions in the supply of pharmaceuticals. The disruptions are being caused by two related government actions. Especially in Greece and Spain, the governments are not paying their bills. Surprisingly, the companies making the drugs are beginning to refuse to send additional supplies. I say surprisingly because I would bet that there has been some attempt to get the companies to ship regardless of the status of payment for past shipments.

The other cause of shortages, which is already happening in the U.S. and is probably happening in Europe, is that certain drugs aren’t being produced because the prevailing price, i.e., the price that the government is willing to pay, is too low to justify making the drugs. In the U.S., we are seeing pharmaceutical companies selectively choose to not make certain generic drugs because there is little or no profit in the price at which they can sell the drugs. These companies have limited production facilities and they choose to use them to produce the most profitable product. Duh!

There is another factor that is spreading the problem wider. In Europe, many countries have laws that require the government to pay the lowest price being paid by any European government. So, say Greece unilaterally decides, as it has, that to “save” money they will lower the price of some or all drugs. It doesn’t really matter what price they choose, the price is way below what the drug companies would charge if free to do so, so whatever price the Greek government chooses will be a disincentive. Then other countries’ low price law kicks in. If the drug is going to be available to patients, the drug company has to ship at the new, lower price. The moral and health consequences are very obvious. The drug companies no longer have any say in the revenue for which they are working. That is unadulterated authoritarianism. It isn’t that different from how doctors are treated by Medicare in the US.

As far as I know or have seen, there is no law saying that the drug companies have to ship, have to continue to make the medication. Slavery has not progressed to that point. If not today, then soon, the drug companies will not be able to continue shipping product on which they constantly loose money. Supplies will become smaller. Shortages rampant, not just in Europe, but worldwide. Companies may go bankrupt. Drug formula may be lost.

Some of the European drug companies are now saying that their ability to do research and create new drugs is being threatened. I expect that they are being a little timid in making known their concerns. I expect that the drug companies are not in a strong political position. Someone is probably keeping a close eye on drug company research numbers. Too bad the mainstream press isn’t interested in actually reporting news like that.

Since the widespread government debt and fiscal deficit problems is going to be a major problem for some time, one should expect the problems in Europe to get worse. The governments will have more difficulty in paying for medical care. The problem will be spreading beyond drugs and supplies to include doctors, support staff, and hospitals. I wonder if someone is paying the electric bills? A private company would be constrained from cutting off power to a hospital. A government electricity monopoly may not be so constrained.

No doubt the problem of non-payment extends to other sectors of the economy as well. Someone said that Spain in particular had determined that keeping cash and not paying bills made the government look much closer to solvency.

What bill is or is not paid is a function of the decisions by bureaucrats. These people have not learned the lesson that 70 years of Soviet economics taught: there is no substitute for a market. What drug or service is available or not will depend upon accidents, pull, and ignorance. Actual health issues and medical need will not be ignored so much as it will be unknown and unimportant. I mean the mere fact that there could be medical need will be unknown. It is government money and it will be paid to the concerns the bureaucrats choose. The fact that there is a reality is overlooked in the regulations. Good luck to us all.

Keep your eyes open. This news, that has come to us in a trickle, leaking into the mainstream in little droplets. So far the press has not be recognized the debt issue as impacting people’s health. Even if they do, there isn’t anything that can be done about it, however. Many of the European governments do not have the money to pay those bills, even if they wanted to do so. How much longer will their citizens have drugs? How long until we are in the same situation? How much will the loss of several European markets affect drug availability in the U.S.? Who knows?

Having gone to the pharmacy regularly, it would seem almost unimaginable that the drugs we rely on could cease to be there when we need them. Those of us who do depend upon them daily, for example, the millions who keep their blood pressure low or those who survive diabetes with medication, could see those meds disappear in the next few years.


Greek crisis takes heavy toll on health

Spain health service chokes in crisis

Drug shortage in US

BO to take executive action on drug shortages

More pain for Euro drug makers (includes information about lowest price laws and the threat to research)

UK pharmacists sound alarm about shortages

HIV gains ground in Greek crisis

US employer health insurance offerings reach new recent low

R&D proposed in Europe over superbugs

Cancer cost becoming unsustainable