Bernie Sanders asks why formerly free drug now costs $375,000 a year
72 replies, posted
Because then the market stops actually functioning correctly, leading to huge shortages. This is (part) of what actually happened in Venezuela, despite that being a horribly overused example of why "socialism bad"
I wouldn't say it was obvious at all, since your post was very broad. Also, a lot of people have been recently calling for things like price fixing for gas/rent/food, making it less obvious
Why wouldn't that happen to inelastic markets, though?
Because inelastic markets don't have demand change with price; the customers are the customers, and they will pay (essentially) anything to get the product they need. It's not like if insulin got too cheap, that you'd start having new customers go "wow, that's cheap! I want some of that good good" any less than you'd have people who already buy it decide to stop buying it if they can't balance their budget with it.
I mean, that doesn't solely apply to healthcare. Most people have no choice but to rent, for instance. If rent prices rise, those who can't relocate have no choice but to pay up.
Rent has much more elasticity than health care. The vast majority of people who "can't relocate" would find themselves VERY willing to relocate if rent suddenly tripled. We see similar things happen in the healthcare industry but there's nothing people can do about it besides go into crippling debt.
Right, but the markets are significantly more complicated when alternatives are available to consumers, and historically attempting to fix economic problems at the price have catastrophically failed. The thing is that markets are significantly more complicated than people pretend they are, and seemingly simple problems with seemingly obvious solutions rarely work as expected.
For instance, with the housing example, you can do some things to protect consumers (limiting the rate at which rent can be increased) but you can't actually price fix the unit, since that would result in huge housing shortages and the units would ultimately fall into disrepair; the veteran housing in NYC is a good example of this.
What makes healthcare different in that regard, though? AFAIK, different entities are competing in the healthcare industry, and consumers have access to alternatives, even if they're all horribly priced.
I mean, if you want a more apt comparison, consider that some simply become homeless once they can't afford rent. That's only marginally better than dropping dead.
Keep in mind that it's not individual people buying these drugs, it's often insurance companies. Even if something goes up by 10,000%, if it's only used by 1 in 10,000 people or fewer, then the increased cost is easily absorbed. That's what these companies are relying on when they increase prices, that insurance companies just pay for it regardless because it's not worth the effort to haggle and it looks bad if you don't cover the treatment (if you can't find a reason to refuse it of course). It's just easier to increase premiums by however much you need to.
nobody in a thread about drug prices is calling for total economy wide price controls.
this just in, bernie sanders sells 3 houses and has SAVED the american economy. unemployment is at 0%, the american dollar is worth more and the stock market is the highest it's ever been!!!!!
i fucking love this claim, it's brought up every time lmao. not how this shit works NOR is it a good counterclaim
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