I've just read your article in the latest issue of QL. I'm a
member of the Libertarian Party of Canada. We would like all
economic issues be taken out of the hands of government and be given
back to the private sector so that the market system will take of
them. But I/we have a problem. That's medication.
I understand the concept of the market system (at least I think I
do). If we take for example the lamp at Wal-Mart, I have the choice
to buy it or not; go elsewhere; or buy a substitute. All of this
affects supply and demand and thus price. The question I want to
pose is this: what choice does a sick person have when it comes down
his medication? He doesn't have the choice to buy it or not (unless
death is his wish). Going elsewhere just means going around in
circles. He could buy an alternative (a clone as I call them), but
they could take years to become available because of copyright laws.
How can he get affordable medication, or insurance, like he can get
an affordable lamp?
Thanking you in advance,
Francis Bédard
Quebec City
Christian Saucier answers: |
Mr. Bédard,
Although libertarians like you and I often get demonised for
being harsh and having no compassion for the needy, I find
to the contrary that the great majority of us are very
concerned and well informed on social issues. The approaches
we propose are often misunderstood, but when we examine them
under the light of well established economic principles, we
find that they are much more efficient than state
intervention.
One of the reasons why many people don't understand
libertarian proposals is that they usually revolve around
allowing the market to operate freely. The market itself
isn't the solution; it is a discovery process, not unlike a
web search engine, that allows us to get to (and measure the
effectiveness of) various solutions. The solutions
themselves are provided by individuals and private firms who
risk their own capital hoping their products or services
will be successful.
Unlike the market approach, the statist proposal often seems
more appealing to many because it is usually more immediate
and it promises specific results. When faced with a problem,
the politicians always tell us: "We have a plan!" These
plans are not inherently bad, but unfortunately we have no
way of measuring how good they are. The only way to measure
the effectiveness of such plans, and to ensure that they
remain aligned with the constantly changing needs of a
population, is to compare them with competing alternatives
in a market.
This might all be true and good, but what about medication?
Your note seems to pose two underlying questions: 1) Do
people have a choice when it comes to medication? 2) How can
we ensure that people can afford the medication they need?
Regarding the first question there is rarely only a single
treatment available for one particular need, although I
agree that there usually is one that is preferred over the
others. Decisions regarding medical treatment are some of
the most difficult decisions to make: there is always a cost
(in money and usually in unwanted side effects), and there
are rarely any guaranteed results.
The fact that treatments developed in the last five years are
usually preferred over treatments that came out 20 years ago
goes a long way toward demonstrating the importance of
pharmaceutical research. Both alternatives are still
available, and some physicians like to wait longer than
others for a new product to demonstrate its effectiveness
before altering their recommendations to their patients. But
no one questions that we continuously need to develop better
drugs, that are more easily customised, that can cover more
illnesses, and that have fewer side effects, etc.
That means we need R&D. The best way to encourage
pharmaceutical companies to do more R&D is not by giving out
government favors. Fiscal incentives always come with
conditions that are unrelated or sometimes even counter-productive
to the actual research (e.g.: location of the research
centre, minimum number of jobs created, investments in the
local community, etc). Other forms of government subsidies
aren't any different as I argued in another article (see «
Pour
un Québec innovant et prospère... sans subvention »)
The best way to encourage R&D is simply to allow
pharmaceutical companies to charge the market price for
their products (see «
Les effets pervers des contrôles de prix », p. 4).
Which brings us to question 2: How can we ensure that people
can afford the medication they need? You already mentioned
insurance, which I agree is the best way to safeguard
against the risk of not being able to afford the treatments
for a potential illness. Again, with insurance as with any
other sector of activity, competition on a free market is
the best way to keep the products diversified and as
affordable as possible.
Yet, there will always be some people who just can't afford
the medication or the insurance they need. Note that the
percentage of the population finding itself in this
situation is not very high in developed countries; the great
majority of people can budget for the basic necessities of
survival. Life-saving or life-sustaining drugs are pretty
high on people's priorities, right up there with food and
shelter.
Still, there remain individuals – the most vulnerable
individuals – who simply do not have the income or the
savings to cover their basic expenses. These are the ones we
need to focus on. We should NOT be calling for "universal
drug programs" where the guy who makes $100K/year gets
subsidised medicine at the same price as someone else living
on $15K/year.
If we have public dollars to spend, let's not waste them on
trying to manipulate the market by putting price ceilings on
products and then subsidising the companies that produce
them. Let's focus our support specifically on individuals
that are the most in need. You'll rightly guess that I am
also a big proponent of private charity, which is a
necessary institution to provide a final safety net after
everything else has failed.
I might have gotten carried away a little with the length of
this response. It only reflects my desire to see more open
dialogue on the topic and my respect for the pertinence of
the questions you asked. I don't presume that this response
will be totally convincing, but I hope it'll inspire you to
remain curious about potential alternatives and engaged in
developing your libertarian perspective on this and other
social issues.
Regards,
C. S.
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