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From: radford@calgary.UUCP (Radford Neal)
Newsgroups: net.politics.theory
Subject: Re: The free market (and lemons)
Message-ID: <619@calgary.UUCP>
Date: Thu, 12-Dec-85 22:27:40 EST
Article-I.D.: calgary.619
Posted: Thu Dec 12 22:27:40 1985
Date-Received: Sat, 14-Dec-85 01:54:07 EST
References: <259@gargoyle.UUCP> <589@calgary.UUCP> <849@mmintl.UUCP> <374@pedsgd.UUCP>
Organization: University of Calgary, Calgary, Alberta
Lines: 16

> Here is situation in which a believe government can be a solution to a
> problem. I have heard on 2 TV programs ( 'Adam Smith's Money World' and
> 'Innovation') that a successful drug is NOT a cure or a vaccine, it is
> a treatment.  In other words, it is more profitable to create a drug
> which allows patients to live with their condition than one which prevents
> or permanently remedies it with few applications. This seems intuitively
> clear...

Not clear to me. I would have thought a drug company could charge just as much
for a one-time cure as they would have made out of years of treatment. It
seems logical for the patient to pay this much. As the inventor, the drug
company presumably has a patent on the drug and hence the monoply power to
charge this much. So did the programs explain why they don't actually 
manage to make as much money from cures?

    Radford Neal