2012-07-05

India Proves That More Socialist Healthcare Is Never Enough

While many a US leftist insists that healthcare reform "had to happen" and that the system "needed" some kind of massive, sweeping, federal legal overhaul, those of us who have a longer cognitive time-horizon understand that there is no "endpoint" to socialism. Reformers of the US healthcare system will never be - and can never be - satisfied, no matter what the reform actually looks like.

Progressives have long been critical of the ACA because it stops short of publicly financed healthcare coverage for all human beings within US borders. An individual mandate is insufficient. A subsidized health plan for the poor is insufficient. Socialists will never stop, because there is always some increased level of socialism somewhere around the bend. So, while it may be the ACA today, it is universal, single-payer healthcare in the long run. And if you think they will stop there, don't fool yourself.

Case in point, India has a public "option." India's socialist health system professes to offer "universal" health coverage to the billions of starving, dying, and desperate poor throughout the country. Everyone else in the country patronizes the private healthcare tier. Why die if you have the money to save yourself? The short-run lesson here is that when public "options" are forced to compete with private healthcare, the private system always wins. The social "safety net" kills people. We see the same thing in the United Kingdom. (Moreover, India is host to a growing healthcare tourism industry and some of the finest doctors in the world. But note: this is only true in India's private healthcare system. Their public system is useless to the point of being deadly, and everyone knows it.)

But, as I stated in the lead-in to this post, "universal" socialist healthcare is not enough for leftists. Leftists always want more socialism, regardless of how much socialism already exists within their borders.

This is evidenced by yesterday's news that India plans to "give free generic drugs to hundreds of millions" of people. The point: "free" healthcare isn't enough - people have a right to "free" pills, too! Western European nations - and their tagalong baby sister, Canada - have long been calling for and in some cases supplying "free" daycare. Socialism doesn't stop, no level of socialism is sufficient to placate its true believers. They always want more.

Now, in this case, there is a larger political story playing out. India and China have been ignoring Western pharmaceutical patents for years now. For us free market types, this is actually a great thing. Patents stifle innovation, distort markets, and drive prices far higher than could be drawn under free market conditions; same as any other form of corporate welfare.

But we all know that India and China aren't interested in promoting laissez-faire capitalism. The real reason they have opted to ignore Western patents is to allow their own domestic generic drug manufacturers to make a lot of money copying patented medicines and selling them on the cheap. If you don't have to conduct any research and development of drugs, then any schmuck with a chemistry degree and a raw chemicals supplier can become a generic drug mogul in weeks, especially if there aren't any patents standing in your way.

So India and China don't want capitalism, but rather they want to promote their own domestic generic drug manufacturing industry. Oh, and by the way, many raw chemicals needed for the production of pharmaceuticals are produced in... India and China! Serendipity.

The one-two punch of ignoring pharmaceutical patents and subsidizing the generic drug industry (for, that is pricely what "supplying free generic medications" is, a government pill subsidy) is a significant blow to branded pharmaceuticals companies. Now they understand that any medicines they develop will quickly be copied by generic competitors in India and China, and sold directly to those same governments in a disgusting, literally incestuous act of cronyism.

No private firm can ever hope to compete with these tactics, which are already quite common in Canada (which hosts a large domestic generic manufacturing industry), are increasingly common here in the United States. So-called "Big Pharma" is shrinking fast, unable to find reliable ways of generating profits via the production of actual medicine. They have to resort to lobbying for protection. In no time at all, they may well become quasi-government labs.

Conclusion
I think we're headed toward a massive shortage of medications and, as Paul Gregory pointed out a couple of days ago, a complete and utter halt in the development of new drugs. Brand pharmaceutical companies may well become a thing of the past. The major players will expand into the generic drug space, moreso than they already have. The entire industry will be a creepy government racket.

It's a real shame, but not a big surprise.