Monday, July 1, 2013

Really Troubling Article About What Is Killing Premies

From the May 22, 2013 Washingtonian is a really troubling article about how shortages of critical medications are causing premature and newborn infants to die.  The medications are low profit, because they are nutrients and thus not patentable, and thus manufacturers lack incentives to increase production capacity to deal with unexpected shortfalls. 

But it isn't just greedy manufacturers; recent FDA policy changes that sound well-intentioned seem like they may be forcing existing production facilities to close for various problems.  As with many "we're from the government, and we're here to help you" situations, what might have been a serious problem is perhaps being made worse by FDA meddling.

Finally, although barely touched on in the article, it appears that collective purchasing by hospitals of these nutrients may be driving down prices and profits to levels that are destructive to healthy incentives.  It sounds like it might be the consumer side equivalent to how anticompetitive collusion between manufacturers injures consumers.

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