October 30, 2004

Kuttnerian Idiocy on Flu Shots

Robert Kuttner embarrasses himself in a recent article on the US flu shot availability problem. It's a mix of bad economics, anti-capitalist agitprop, fear mongering, and most amazingly pro-indentured servitude. Talk about a target rich environment for criticism.

First things first, the reason we have a shortage of flu shots and other countries do not is that the FDA has higher standards for flu vaccines, thus fragmenting the market into "vaccine good enough for the US" and everybody else. The extra regulatory burden isn't trivial to meet so you can't just swoop down and buy from the rest of the 1st world when something goes wrong here anymore than you can ship gasoline into Chicago from out of area when the local refinery has a hiccup and prices soar (thank the EPA for that particular market fragmentation). Canadians do not have a flu vaccine shortage because they didn't adopt absurdly high standards over other first world nations and not "thanks to their national health system". If they were to suffer a vaccine production mishap, they can dip into the wider market in a way that the US, with its extra high standards cannot.

What profits are to be had in the US vaccine market are largely soaked up by legal bills as trial lawyers have circled the industry picking off one participant after another. Here is Kuttner's one good idea, cutting down the lawsuit opportunities by act of Congress.

But even here, Kuttner gets it wrong as out of control torts are sucking the lifeblood out of America across the board. Their pernicious effects regarding vaccines just happen to be more visible. His idea would only apply a one issue band aid on a very deep wound in our legal system. General tort reform has long been a Bush administration goal but no credit is given here by Kuttner to Bush administration foresightedness and trial lawyer pig headedness. The trial lawyer-in-chief in Congress is, of course, Sen. Edwards who is the number 2 on the Democratic ticket this year.

Things go downhill from this bit of half-right thinking. Kuttner wants to force companies to participate in making vaccines. He wants to be able to compel their labor and force them to sell at a particular price. He labels this level as a "normal profit", something that is likely to neither be normal or profitable.

But imagine the precedent here. Just because there are insufficient market participants in markets on which people's lives depend, the government has the right to compel labor from companies engaged in related production. You might as well say that software coders could be forced into defense production work at "normal profits" or "normal wages" no matter that they have no interest in the field nor would the money be equivalent to what they are making elsewhere for the same effort. Doctors could be forced into the VA system, whether they liked it or not. After all, just like the pharmaceutical companies, without public research and government licenses, Doctors wouldn't be where they are today.

But wait, there's more. In an early paragraph the specter of avian flu makes its appearance. It has nothing to do with this year's flu crisis but casually tossing around the idea of mass human casualties after railing at Bush administration incompetence is about as subtle as interspersing pictures of jews and rats. It's just vile.

The bad economics shows up in the staggering assumption that government is a superior allocator of scarce resources than the private sector. The fact that this has been disproven time and time again for decades does not seem to have made an impression on the writer who seems to be in an economic time warp back to the interbellic years when the Reds were on the march.

He also plaintively asks "Do we really need Cialis, and Levitra and Viagra?" as if price competition created by new market entrants were an entirely foreign concept to him. In fact, yes, we do need them for both health and economic reasons.

The economics I've covered above but there are people who have a real need for help who cannot take one or two of these drugs without dangerous side-effects that do not show up in the third. Some small number can't take any of them safely and effectively and await further new entrants into the market for their conditions to be relieved by the pharmaceutical revolution.

Robert Kuttner doesn't care about these people. They're a minority of sufferers interspersed throughout the healthcare population and are not very united. Kuttner doesn't care about who he'll delay cures for as long as the choice of where pharmaceutical research money gets to be more politicized, more socialized, more nationalized.

Can we have a rousing verse or two of the Internationale? Go ahead, start without me. I'll just be off to the side being sick. Don't mind me...

Posted by TMLutas at October 30, 2004 01:43 PM