James_Miller comments on Rationality Quotes October 2013 - Less Wrong

7 [deleted] 05 October 2013 09:02PM

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Comment author: James_Miller 03 October 2013 06:24:12PM -1 points [-]

By lowering prices for drugs, for example, more people can afford them but pharmaceutical firms have lower profit incentives to find new drugs. The medical device tax, furthermore, will help fund Obama care but also reduce incentives to develop new medical devices.

Comment author: Estarlio 13 October 2013 02:54:08PM 0 points [-]

Depends on the price elasticity of demand. If you widen the access to the thing by lowering the price, it's possible that you might make more profit than someone who has fewer customers who they make a lot more profit per customer off of.

Comment author: Eugine_Nier 14 October 2013 12:12:45AM -1 points [-]

In situations where this is the case, the company in question doesn't need to be ordered by the government to do this.

Comment author: Estarlio 14 October 2013 08:06:47PM 0 points [-]

Setting a price isn't necessarily a decision made with respects to the interests of one company. Not knowing precisely how the marketing groups for medical goods in the US are set up, beyond that they're pretty abusive, I don't care to argue that one way or the other though.

Comment author: ChristianKl 04 October 2013 09:41:10AM 0 points [-]

Expanding coverage and lowering prices are two different issues.

You can be in favor of one and not the other.

Big Pharma was in favor of Obamacare. The made a deal. Obama didn't choose to implement effective price cutting policies such as allowing reimportation of drugs. Then Big Pharma spend millions for advertisements to promote Obamacare.

Comment author: James_Miller 04 October 2013 12:42:53PM 0 points [-]

Big Pharma was in favor of Obamacare

Two possible reasons:

(1) Blackmail--Obamacare harmed them, but big Pharma was told by Democrats that if they didn't support it the Democrats would pass something that harmed them even more. The medical device industry didn't support Obamacare and as a result they got hit with a special tax in the final bill.

(2) Reduced competition--Obamacare makes it harder for other firms to enter the pharmaceutical industry.

Comment author: ChristianKl 04 October 2013 01:32:05PM 0 points [-]

As far as the medical device tax goes, I agree that it's worth repealing it.

In total it's however zero sum for spending on healthcare. The tax pays for tax rabates for health insurance. Money payed into the health insurance system gets spend on medicial expenditures.