What Price the "Free" Market?

What will it take to get us all to agree that "The Market" can't do everything? To admit that there are some things that the government is uniquely qualified to do?

We can agree on national defense -- and even there, well, don't get me started on private military contractors -- but after that?

Saturday's New York Times gave an excellent example.

Gardiner Harris reported that there are currently "critical shortages of drugs to treat a number of life-threatening illnesses, including bacterial infection and several forms of cancer."

These are not new drugs, but nearly 200 reliable, generally inexpensive, standards for the treatment of a wide range of diseases. As one oncologist quoted said, "These drugs save lives, and it's unconscionable that medicines that cost a couple of bucks a vial are unavailable."

When they are available at all, prices have risen dramatically (in some cases as much as twentyfold). And while the shortages are all of older drugs, they are affecting new-drug trials, as "some experimental cures have been delayed because the studies must also offer older medicines that cannot be reliably provided."

What is behind these shortages? In a majority of the cases, supplies have been disrupted because inspectors (internal or government) found contamination problems. Note that more and more of the production of these types of older drugs has shifted to a handful of generic-drug companies, many of whom manufacture overseas where they are never inspected by the FDA. In other cases, shortages "have occurred because of capacity problems at drug plants or lack of interest because of low profits, according to the FDA." (emphasis added)

These issues might all be important, but they don't help patients dying of childhood leukemia, colon or breast cancer, or bacterial infections.

As Harris wrote,

A crucial problem is disconnection between the free market and required government regulation. Prices for many older medicines are low until the drugs are in short supply; then prices soar. But these higher prices do little to encourage more supply, because it can be difficult and expensive to overcome the technical and regulatory hurdles. And if supplies return to normal, prices plunge.

Moreover,

...Some wholesalers buy certain drugs in large quantities because they are betting there will be a shortage. The excessive buying can help make their predictions come true.

I'm sure that some would say that the solution to the "disconnection" is less government regulation rather than more. But you know me -- while it's really tempting to rant about despicable war profiteers, that's not where I'm going to go with this.

The federal government, lawmakers, representatives of the pharmaceutical industry and doctors' groups are working on possible solutions, "which include a national stockpile of cancer medicines and a nonprofit company that will import drugs and eventually make them," that are still only in the planning stages.

Absent the national health-care system that I believe we have a moral responsibility to provide, we must at the very least not make it harder for Americans to obtain necessary care. A cancer diagnosis is always deeply stressful, no matter how treatable the particular form. We owe it to our fellow citizens not to make it more stressful by guaranteeing adequate supplies at uninflated prices.