David R. Henderson  

Law and Order's Economics

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My student, Mike Williams, sent me the following last night:

I don't know if you watch Law and Order Special Victims Unit but they had a rather frustrating take on the pharmacutical companies tonight.

In the episode one of their witnesses to a crime was suffering from heroin withdrawals. The doctor told the cops that he had to put the witness on methadone to help compensate for the withdrawal symptoms. But, he said, there was a better drug out there that could cure him of his heroin addiction, had side effects that were smaller than methadone, was in pill form (methadone apparently is administrated via IV), etc. Basically it was a wonder drug (can't remember what they called it).

So of course the cops ask the doctor why he is not using it and the doctor explains that the patent for this new drug has run out and since the FDA has not approved it yet no drug company is willing to run it thru the FDA trials to get it certified in the United States because they will not be able to make any money off it. Of course the cops start bad mouthing the "evil" drug companies and their lack of morals.

What I found interesting is no one bad mouthed the FDA: the true culprit in this "crime." I was hoping (yes it was a slight hope but still a hope) that the cops would have discussed the fact that the FDA is keeping the miracle drug off the shelves in the United States thru its arcane regulations and testing requirements. Instead the cops bad mouthed drug companies making profit over helping people out. To take the cop logic to its conclusion (at least from my point of view), I would have loved it if the cops had then looked at themselves and decided that they were making a "profit" off their cop salaries, sat down and calculated out exactly how much they needed to sustain themselves every month, and then decided to return that salary back to the City so that the City could use it to help people out in other ways.

Sir, it always amazes me when people attack profit like it is a bad thing.

Just thought I would let you know economics is not a strong point among the writers of Law and Order.


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COMMENTS (20 to date)
Mr. Econotarian writes:

"House" reminds me why our medical costs are so high: Generally 10 tests and 1-2 surgeries per patient before the correct diagnosis is made :)

Somebody writes:

FYI, the drug they were referring to is likely Suboxone.

Somebody writes:

Oops, that's what I get for commenting before I read the entire post. Suboxone is a drug that's commonly used by recovering opiate addicts. Honestly about the only thing that makes it 'better' is the way in which it is treated by law. You don't have to show up at some methadone clinic every day to get it - your doctor prescribes it like a normal medication, and you pick it up from your pharmacist. It also doesn't make you feel as good as methadone so the nannies like it more.

Suboxone, unlike whatever drug is being described in the post above, is approved for use in the U.S.

Not sure what drug the OP was referring to.

Luke G. writes:

I saw this episode too and had the exact same reaction! The drug in question was actually http://en.wikipedia.org/wiki/Ibogaine I looked it up.

Coining A Phrase... writes:

"In the criminal justice system, the people are represented by two separate yet equally important groups: the police, who do whatever they're told, and the district attorneys, who prosecute without regard to justice. These are their stories."

Constant writes:

"economics is not a strong point among the writers of Law and Order."

I think simple common sense would be enough. I think what is going on is that they are not thinking to question the wisdom of the FDA. The most rational mind can miss the obvious if it does not occur to the mind to examine it. And of course, the entire show is a glorification of government workers. The heroes never go after an innocent to fill a quota. They never fail to unmask the guilty because they're too busy bidding for something on eBay.

Michael writes:

Methadone can be taken orally. IV administration is not necessary. Addicts need to be seen every day to be sure they are taking it, rather than selling it on the street. There are no "wonder" drugs for opiate addiction.

RL writes:

Actually, Michael, there IS a "wonder drug" for opiate addiction. It's called opium...

Bob Murphy writes:

I am impressed one of your students called you "sir." You must be a commanding presence in the classroom. (Or is it Navy thing?)

David R. Henderson writes:

Bob,
I think I have a commanding presence. But even if I didn't, they would call me "sir." It is a military thing.
Best,
David

greed is good! writes:

The government should let drug companies just do their thing and stop regulating so much with the FDA... competition will probably solve the problems that the government is trying to enforce.

From said "Sir's" class:
"Farmers (drug companies) do not farm because they are benevolent, they farm because they are 'greedy'. This greed drives competition against other farmers and as a result we benefit from better quality, more variety, and lower prices."

Greed is good...!

claynon writes:

[Comment removed for supplying false email address. Email the webmaster@econlib.org to request restoring this comment. A valid email address is required to post comments on EconLog.--Econlib Ed.]

Isegoria writes:

The "wonder drug" exists, and it's called Buprenorphine — but the FDA hasn't kept it off the market. Rather, dispensing Buprenorphine requires jumping over a few regulatory hurdles — a certain number of education hours devoted specifically to Buprenorphine, etc.

Joe writes:

Yep...The evil FDA...assuming it actually works...If there were $$$ to be made, someone would push for the trials for approval. My guess is that methadone is wicked cheap so there is not much profit incentive to try and get another drug through and approved.

Turns ut that Heroin addicts do not get much sympathy.

Brandon writes:

Wow, Joe. Talk about missing the point ENTIRELY.

drcroogemcduck writes:

i think it is interesting that they blamed drug companies. the drug is out of patent and anyone could produce it. isn't anyone who is not producing the drug just as 'evil'.

Detoxer writes:

As the director of Novus Medical Detox Center, it is apparent to me that the best treatment is to get someone drug free. Methadone and Suboxone are both highly addictive and have long term health consequences.

Steve
http://novusdetox.com

Caitlyn Nesbitt writes:

I highly doubt the writers of Law and Order were even thinking about economics when it came to writing the script.

I'm sure they decided that attacking "drug companies" would cause less drams than attacking the "FDA" personally. If they had attacked the FDA I bet we would be watching Law and Order in their own court experience.

I wonder how many "wonder drugs" are actually out there but companies know they will not make a profit so they don't produce any? This, unfortuanatly, is an evil world that revolves around money and profit, if you're not making any it's apparently not worth it. Sad day :(

David R. Henderson writes:

Dear Caitlyn,
It's an evil world because it revolves around money and profit? I think it actually revolves around many things besides that, but money and profit are certainly part of it. So let me ask you: if your employer cut your pay by 50%, would you stay on that job?
David

John writes:

If we take your example further, it wouldn't be unreasonable to assume that the employer felt it could get away with cutting her salary by 50%. And if one employer felt that way, it is possible (and maybe probable) that other employers may feel the same since conditions are probably similar across the board. Maybe she can move to someplace else and maybe conditions would be better there... maybe not. Maybe she could change careers... and probably make less. She could leave the job, but then she has to find another job or eventually be out on the streets, starving etc. Or she could spend some more money and get an education. However, doing that there's a good chance that she could be joining the growing group of underemployed and educated, but now with a sizeable debt.

So the question then becomes, does she have a choice?

In reality, taking a pay cut is exactly what has been happening. Looking at the recent economy it is obvious, but it has been happening for decades. Deindustrialization and deskilling of jobs has been the trend and entire cities have suffered for it (Cleveland, Ohio, Detroit, Michigan). Are fewer things being manufactured? Just the opposite. However now they're being manufactured by cheaper labor overseas. Jobs lost were replaced with either lower paying service jobs, or no jobs.

I'm not saying it's an evil world, nor that money and profit are the only important things; but they definitely are the most important things, especially in our culture. And while that may not be evil, it definitely promotes an amoral survival of the fittest. On the surface, that sounds like competition, but in reality there isn't much competition because having more resources equates to stacking the deck in your favor (resources let you stay healthier, become better educated, influence government policy and laws, buy practically anyone), enabling you to acquire even more resources. Furthermore, you can pass this advantage on to your friends and family, so it is self-perpetuating. In the end, it is not too different from having a nobility. The more things change, the more they stay the same.

The trouble with the idea that greed is good and competition for profit should work itself out is that resources are limited, the population is growing, and the game doesn't get reset (without violence). There just isn't such a thing as sustainable growth.

More to the point of this blog, I agree that it is unreasonable to expect the drug companies to fund the trials. They're all in competition and it is a dog eat dog world. However the FDA needs money to fund the study as well. Where will this money come from? Taxes? That's evil. And if the FDA does choose to fund this, what about alternative treatments? Why does this one receive special consideration? That means even more money. More taxes or does the FDA need to look for profits as well (even if it operated as a non-profit, it would still need to get the funds somehow)? Then why stop at the FDA? How about running police and fire departments as businesses as well? How about the military? How about the entire government? Shouldn't be a problem since greed is good.

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