Death and Ironing Boards at the Washington Post

Last week the Washington Post devoted a major front page story to a report on tariffs on Chinese ironing boards that can be as high as 150 percent. Today a page 2 article reported on evidence that a popular diabetes drug, Avandia, increases the risk of strokes and heart attacks.

The Avandia article never discussed the government imposed patent protection that allows Avandia's manufacturer, GlaxoSmithKline, to charge prices that are several thousand percent above the competitive market price. The enormous profits that result from this protection gave GlaxoSmithKline a powerful incentive to conceal evidence that the drug was harmful, as is alleged in the article.

It is interesting that the Post would devote so much attention to highlighting protectionism in the context of ironing boards, while ignoring the issue altogether in the case of a drug with sales of $3 billion a year and which could lead to thousands of unnecessary of heart attacks and strokes. There are other mechanisms to support drug research which would allow drugs to be sold at competitive market prices.

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written by izzatzo, June 29, 2010 5:33

From the WaPo article on ironing boards:

The company survives in part because it convinced U.S. trade officials that Chinese firms were unfairly dumping ironing boards into the United States at less than fair-market value; in response, the United States levied anti-dumping taxes of 70 to more than 150 percent on its Chinese rivals.

So what's the problem? This is exactly what Baker and Krugman have been recommending for China imports in general to correct the US trade deficit should it refuse to allow its currency to rise relative to the dollar, which is a form of dumping exports.

In reverse, Baker wants Big Pharma to "dump" its drugs at what, below fair market value, or is fair market value the dump price? So the incentive to produce more dangerous drugs would be even higher since safety would be sacrificed for volume.

Stupid liberals.

-2

cure worse than the disease
written by frankenduf, June 29, 2010 8:28

the other perverse money incentive is that drug companies make more for managing symptoms than curing- the irony is that a drug that cures diabetes would make less money for the industry than the umpteen diabetes drugs which help to manage symptoms (blood sugar, A1C, weight)- and, all drugs cause side effects, which if cardiac become quite serious- policy makers need to incentivize prevention, as the free market has evolved to me-too drugs which manage symptoms and are more expensive

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written by Queen of Sheba, June 30, 2010 2:53

Dean;
I hope you keep pounding on the message until someone in the media picks up on it, does a little investigation, and writes an expose. Maybe someone from Rolling Stone, since they're becoming a publication to watch for investigative reporting.

The main deficit problem this country has going forward, even after we extricate ourselves from this current economic mess, will be the costs associated with our health care system, including pharmaceuticals. Unless every cost attributable to health care is examined and reorganized to limit its size and scope, we will never again even approach a balanced budget and begin to pay down the debt.

I don't know how long it will be until this truth becomes common wisdom, but I thank you for doing what you can to educate those who will listen about the enormous giveaway to drug companies that is the obscene patent system for drug manufacturers.

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Death and Ironing Boards at the Washington Post

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