Delayed Comment on Drug Advertising

In a much delayed comment to a January 31 post, a self-described economist takes issue with my take on drug advertising.

Your argument that drug companies should have the right to waste millions on TV ads is totally wrong, and makes it very obvious why consumers should not be paying for drugs, but they should be subsidized by the government, eliminating all the money wasted on TV ads. Charities raise money to give for drug research, and these companies go and waste it to put talking heads on TV? It is completely unconsciable. Once developed, drugs cost virtually nothing to produce. Any time a person who needs a drug and does not get it, there is a waste of the resources used for drug research, because it would cost virtually nothing to provide them the benefit of that drug. Even in the US, there are as many people who go without any drug as those who get it, and if you look worldwide, there may be 20 times as many who go without as get it. This is a huge loss to society. In an efficient society, suppliers must not waste money on TV advertising, and items that have zero marginal cost like drugs must be subsidized by the government, and given away free. It is well documented that if a good is not being sold at its marginal cost, resources are being wasted

Of course! Whatever was I thinking of?

Every good can be converted into a good with a zero marginal cost by merely including sufficient actual production in the development process and later selling from the produced stock. It would certainly simplify things if the government produced everything and provided it for free, but it would be the simplicity of the grave.

Share this

:lol: Proof once again that

:lol:

Proof once again that the ability to repeat economic terminology does not mean that one knows anything about economics.

HAHAH!!! What a crack

HAHAH!!!

What a crack economist, he should get a job at one of those "consumer protection" racket....er.....foundations. Where does one begin to explain whats wrong with his garbage, is there even a point? Anyone who reads this blog regularly should be laughing or shaking their heads too.
However I must make mention of the hilarity of calling advertising wasteful while, at the same time, not even mentioning the hundreds of millions of dollars that drug companies are compelled to piss down the gravity hole because of redundant FDA testing rules.

This man is no economist.

This man is no economist. While it is true that a high price for a product with a marginal cost of zero is inefficient compared to some theoretical model of perfect competition, the inefficiency here is a result of Intellectual Property protection, not advertising. Now, IP protection for drugs, while inefficient compared to perfect competition, may still be advisible, since the drugs might not even be produced were a temporary monopoly not granted in return for investment risk. But advertising has absolutely nothing to do with this argument.

Jake, Good point on the

Jake,

Good point on the rediculous unnecessary costs of the FDA beaurocratic maze.

Another point which must be made: the :dunce:commenter:dunce: in question is obviously no more than 14 years old. For, if he/she was, then they would certainly understand that advertising, like drugs, or peanut butter or computers, is a market product. By forcefully robbing the advertising industry of the pharma clients, you are directly taking wealth away from people in the advertising industry. Thus, those people, given that they are either out of a job, or at least have lost benefits and wages, are less likely to be able to afford the drugs in the first place.

And, as Don Lloyd points out, it sure would be easy to simply nationalize all products & services. It's called communism. Why are drugs special? They aren't. OK, perhaps you'll say that some people depend on them to live, or at least be healthy. Well, the same goes for food, and water, and shelter. Shall the government take over those industries as well?

Oh boy, I can't wait to get my 100% free "Gubmint-O's". The best part of all is that, since the government will be taking over the business, there will be none of that nasty evil stuff called "competition". Who needs it, anyway? Ads? What are they good for, other than wasting money. Any time two companies compete, whether it's by advertising or making a better product, then it's a waste of time & money. It's inefficient! Why, without competition, we can expect optimal efficiency.

Yup. I mean, all one needs to do is look at the current examples. Look at the Post Office monopoly. I sure enjoy standing in line for 45 minutes every time I go to the P.O. And the best part is how the lazy mailmen get like 120 paid holidays every year. Damn, now THAT'S efficient! And they were even more efficient before they had competition. And how bout the road monopoly?! Every time I drive by a gaggle of about 10 surly DOT rednecks getting paid to stand around and stare at a ditch...every time I get stuck in a traffic jam because the DOT decided to repair a road that was perfectly fine, just so they could justify next year's budget...it makes me think, "wow, how efficient!"

Yes, ladies and gents, every amateur economist knows that when the government takes over an industry and creates their own monopoly and destroys competition, then "efficiency" is maximized. And the "economist" commenter above did a good job illustrating that fact.

Maybe you should ask him

Maybe you should ask him what the drug consumer's marginal cost of producing information is? Y'know, just in case he was curious about this drug, its side effects, competitors' substitutes, alternative therapies, etc.

Oh wait, I forgot. In commutopia, there is only one drug, and it always works for everything. It's called "gunshot to the neck".

Don, I know that was

Don,

I know that was supposed to be funny. But I was more frightened than amused. Please add some education after your satire. I worry someone who's not paying much attention would get the wrong idea! :sweat:

I get lots of "street logic"

I get lots of "street logic" answers like this in my beginning micro class. This "response" would be marked down signficantly as well.

It makes perfect sense! I

It makes perfect sense! I think you guys are just claiming that there would be no money for the government to fund all this-- but that's quite easy-- the government prints the money out of thin air already, so they could just use that ability to pay for the drugs that anyone might need!

See how perfect it is? The government should provide everything! After all they can afford it!

(I'm, of course, joking. But I think the average person does not understand money, and so this is why they think the government can just provide things arbitrarily.)