http://www.nytimes.com/2010/07/13/health/policy/13avandia.html
In the fall of 1999, the drug giant SmithKline Beecham secretly began a study to find out if its diabetes medicine, Avandia, was safer for the heart than a competing pill, Actos, made by Takeda. Avandia’s success was crucial to SmithKline, whose labs were otherwise all but barren of new products. But the study’s results, completed that same year, were disastrous. Not only was Avandia no better than Actos, but the study also provided clear signs that it was riskier to the heart. But instead of publishing the results, the company spent the next 11 years trying to cover them up, according to documents recently obtained by The New York Times. The company did not post the results on its Web site or submit them to federal drug regulators, as is required in most cases by law.
In the fall of 1999, the drug giant SmithKline Beecham secretly began a study to find out if its diabetes medicine, Avandia, was safer for the heart than a competing pill, Actos, made by Takeda.
Avandia’s success was crucial to SmithKline, whose labs were otherwise all but barren of new products. But the study’s results, completed that same year, were disastrous. Not only was Avandia no better than Actos, but the study also provided clear signs that it was riskier to the heart.
But instead of publishing the results, the company spent the next 11 years trying to cover them up, according to documents recently obtained by The New York Times. The company did not post the results on its Web site or submit them to federal drug regulators, as is required in most cases by law.
This seems to demonstrate the market does not self-regulate, that companies are willing to harm their customers for the sake of profit, and that stronger regulation is needed to protect consumers.
geniusiknowit: This seems to demonstrate the market does not self-regulate, that companies are willing to harm their customers for the sake of profit, and that stronger regulation is needed to protect consumers.
See Underwriter's Laboratories.
The market does not "regulate itself" per se, but firms provide checks against one another. It is government who is "self regulated", and in fact, always being de-regulated as it gives itself more and more power...
Last time I checked, the government regulates medicines. Why are there still homeless people with over 50 federal programs charged to prevent it? I'm sure that if it is more regulation you want, government will be happy to oblige.
companies are willing to harm their customers for the sake of profit
Maybe, but I personally don't pay to be harmed. Perhaps the actual problem is a legal environment that protects drug makers from lawsuits. Also, these drug companies get patent protection on drugs. Maybe competition would have led to research by competing firms which would have identified the problems with the drug, possibly coming out with alternatives.
Also, diabetes is a "disease of civilization". Humans aren't well adapted to eating refined carbohydrates and sugars. The USDA, regardless of shaky health science, pushes 8 servings of carbs per day and along with such groups as the corn lobby and AHA endorse unhealthy plant oils.
Democracy means the opportunity to be everyone's slave.—Karl Kraus.
Perhaps it's a problem of insufficient regulation? Regulation that doesn't go far enough?
And why is there currently no UL or Consumer's Union equivalent for the pharma industry? Why hasn't the market created at least a couple private "FDAs"?
They are crowded out by government. People also believe in the FDA.
geniusiknowit:And why is there currently no UL or Consumer's Union equivalent for the pharma industry? Why hasn't the market created at least a couple private "FDAs"?
Moreover, the FDA is provided free already. Its like why more people don't go to private school; the government already forces you to pay for the public option. The FDA is also the governments poster boy. Its practically the only institution that sometimes does what it claims to do. The government needs to do at least *some* things right or people will realize the emperor has no clothes.
If the FDA were run perfectly, we could critisize it on grounds that it is not cost effective; obtaining its revenue by force rather than through supply and demand on the market.
geniusiknowit:Perhaps it's a problem of insufficient regulation? Regulation that doesn't go far enough?
Stupid people will always be victims under any system. No more matter how much you try to protect an idiot he will always botch up his life one way or another. This could be the Soviet Union and state disciples would still be blaming lack of regulation on every single bad thing that happens.
Seems to demonstrate sweet f*ck-all to me. In fact, it seems to demonstrate that the government can't regulate at all... BTW this would be an instance of fraud, which is punishable on a free market. So I'm not sure why you would think it proves anything of the sort, other than the fact that some agents on the market might act criminally. I'd also take into consideration the points ERO raised.
Freedom of markets is positively correlated with the degree of evolution in any society...
This actually indicts government regulation. Consumers would be more skeptical of drugs like this if it hadn't gotten approval from the monopoly FDA. The FDA shouldn't block any drugs, and then consumers will know to be skeptical (cause the FDA didn't give them a false sense of security), and their demand for drug testing services will elicit a supply, and an industry of "consumer reports" for drugs arises.
In a competitive testing market, this drug wouldn't have passed muster. Only with the monopoly FDA and no competitors can this result be achieved.
OP's logic seems to be: Statism fails ---> hence, free market is bad. It makes no sense!
What kind of regulation would you like to see in response to this?
The market definitely self-regulates. What you mean to say is that companies don't always necessarily self-regulate. Third parties will come in 100% of the time to help out consumers, or else the consumers will check things out themselves. You notice that all of these stories come out in the free press instead of through government bureaucracies.