Regulating the Pharmaceutical Industry: A Case Study of Revlimid
Innovation in the pharmaceutical industry is critical for healthcare improvement, but at whose expense? Revlimid’s cost indicates how the lack of proper market regulation hurts the patients. Fundamentalists prefer a free market while protectionists champion for market regulation, although Karl Polanyi advocate for a balanced approach. Notably, the private sector is efficient in driving drug-related innovation and deserve the state’s assistance, but the government should enforce consumer protection.
Fundamentalists call for enhanced market independence. From their point of view, the world is free, and so should every market be. The fundamentalists’ perspective is that market forces will eventually regulate the market. Hence, giving Celgene all the liberty to shift Revlimid’s prices is the best way forward since that attracts many industry players and in the end supply and demand will be at favorable levels or even equilibrium. Milton Friedman argues that genuine civilization comes from the people themselves and not the state. The free market proponents believe that consumers are responsible enough to dictate the commodities’ prices. In this respect, Friedman asserts that responsible consumption is enough instead of introducing stringent regulations. Relating to Revlimid’s case, although the drug is crucial in cancer management, clients can select other alternatives over Revlimid. Hence, the unregulated market motivates pharmaceutical industry players to invest more in innovation, finally stabilizing the market.
The government should help the private sector in putting everything in place. Walter Isaacson argues that private companies are efficient in supporting innovation since they are more immune to risk and failure than the government. The assertion is true given that with stringent government regulation, Revlimid could have been a limited product in the market or available at highly fluctuating prices, which could be too low or too high because government policies oppose the market forces. Fundamentalists propose government intervention only as assistance to what the private firms do. As such, Isaacson suggests that the state should support experimentation to promote the creation of essential commodities. Thus, the government and private corporations should partner, where the state finance basic research that results in the production of cost-effective medicine. Consequently, the government should supplement the private sector’s efforts in the provision of life-saving drugs.
Protectionists counter fundamentalists’ viewpoint on the basis that unregulated market is exploitative. They argue that the government should protect the society’s interest of improved affordability. Robert Reich submit that there is a high degree of immorality in the market. The submission is correct considering that Revlimid’s cost jumped from $215 in 2015 to the current $763 without valid reasons. Hence, from Reich’s point of view, a regulated market is moral. Nonetheless, it is crucial for the state and the private entities to co-exist. In this regard, Reich recommends that the government and the private sector should cooperate in one economy. Notwithstanding, protectionists expect that the government should act in the favor of consumers whenever there is a public-private collaboration. Notably, the state should feel patients’ pain and exploitation from private drug-makers and chip in to stabilize the expenses.
The state has the responsibility to protect both the consumers and investors. Mariana Mazzucato postulates that the government should assume more risks than private companies. Since healthcare is a fundamental pillar of sustainable growth, the government should lead in drug-related innovations and support firms who invest a lot in medical research and production of new medicine to avert the transfer of the cost effect to the clients. Mazzucato contends that the administration in power is a stakeholder in most industries. Thus, the government is a vital player in the pharmaceutical business and influence the market through regulations. Mazzucato’s perspective is that the state manage taxes and revenue, and it should control innovation for better economic gains to citizens and private shareholders. Correspondingly, the government is entrepreneurial in commercial matters, and it can modulate product development in the pharmaceutical industry to shield both the producers and consumers from the potential financial threats.
We should embrace a free-market economy to realize rapid growth like Singapore. Regulating the pharmaceutical industry may push away potential investors, who could foster the establishment of cost-effective drugs. The demand-supply forces often balance any market. Therefore, the government should not limit the pharmaceutical companies’ activities, but instead, support them for national advantage. Specifically, the state should create favorable conditions for innovation and investment, ultimately resulting in the production of many life-saving drugs, such as the manufacture of affordable drugs with high efficacy than Revlimid. Subsequently, the public-private partnership is fundamental in building a free economy that benefits everyone.
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