Once upon a time there was a company producing drugs. They were good. They had a great research department. And even some money to spend on research, since they knew they would sell the drugs.
The owners were happy since they got their profit. And they continued to invest in research, find new medicine, sell and become richer and richer. Like this:
In the same country there were doctors and hospitals of course. When they found a disease they treated it. And if drug A helped - they would use it.
The drug A would counteract the disease A. Like this: (the special arrow is "counteract")
But, now a problem was seen. When treating the sick with the A-medicin resistant bacteria developed. Or suddenly appeared. The doctors were not sure how, but it was a fact that they now had to deal with disease B. And it seemed that it was the wide-spread use of drug A that "created" or "allowed" the resistant bacteria to enter the scene.
The drug A did not cure people with disease B. So, they really needed the drug company to come up with a new medicine.
The situation looked something like:
The drug company developed drug that doctors used. While using the drugs resistant bacteria appeared and new disease was born. And that triggered the need for new research. All this created another loop with diseases, resistant bacterias, need for new drugs. And so on.
Can you see any problems?
The most clever people in the country met and discussed. Here are some of the questions they were discussing:
- How do we limit usage of drug A in order to avoid disease B - while still helping people with disease A? Should we help now - or consider the future? Or both? How do we balance this situation?
- If we limit usage of drug A - How do we ensure that the company can do research and have happy owners? If they cannot sell drug A they cannot research new drugs.
- Should we by ethical means do everything we can to stop every new disease? Thus risking to create new resistant bacteria that we need another drug for. All in a spiraling effect...
And I actually think they they still are discussing these matters...
[If nothing of this makes sense, or is completely unrealistic, remember: its just a story :-)]
The story is maybe oversimplyfied? There are many more companies at work and the doctors in the story are missing in the diagrams. The company is probably not neglecting the part played by the doctors and the doctors aren't barking cats who do not respond to incentives. But assuming the diagram says all that's needed I'd say that it's obvious that the company's incentives to limit the cause of Disease B are limited, even negative. Disease B seems to pose an opportunity for them to reach even more profits?
ReplyDeleteAnyway, I'd say that looking hard for alternative ways to limit Disease A seems to be a way to explore.
Ah yes. Doctors and "Government" should probably also be in there. Oversimplified is most likely an understatement. :-)
ReplyDeleteAh, the government! I assumed the thought experiment was situated on a free market.
ReplyDeleteThere are various forms of "free market" in healthcare, but they all involve some form of funding. In the US, a large amount of the funding comes through health insurance, often paid for by the employer. In Europe, most of the funding comes from the tax-payer. As we know, President Obama is trying to rebalance healthcare funding, and is facing resistance from those who frame the debate in terms of the "free market".
ReplyDeleteI personally find the idea that government has (or should have) no role in the "free market" rather strange. (Reagan and Thatcher deployed significant amounts of state power to push through various reforms designed to promote their own vision of "free market".)
This example raises some very interesting issues about regulating and changing very complex systems.