Health from an Economic Perspective

When I chose to attend the Rose Cafe by Dr. Sean Nicholson, I was merely thinking of what fit my packed schedule. The description of the event was rather ambiguous, and I had no idea what type of event I was to anticipate. However, the thought-provoking discussion on healthcare was way more than I bargained for, and I thoroughly enjoyed the content.

The main focus of the discussion was on the structure of the current healthcare system. Many of the concepts that Dr. Nicholson introduced to the group were ones I was already familiar with. However, I was used to the narrative expressed by news outlets, documentary movies, and experiences of adults around me. Dr. Nicholson approached the topic from a rather different perspective, that of an economist. No emphatic statements about “big pharma” and pharmaceutical companies being the devil’s workshop were present in this discussion. Rather, the benefits and disadvantages of the system put in place by the FDA and Congress were explored in a calculated manner. Another aspect that differentiated the tone of this cafe from common discourse were the attitudes towards money being made by pharmaceutical companies. Mr. Nicholson took that approach that the price of drugs is warranted a high price because of the lengthening of lifespan a drug brings, as well as the money and time invested in R&D. He also seemed to abide by the school of thought that allowing pharma companies to choose their prices increases the innovation and introduction of new drugs. These pragmatic economic perspectives were not ones I had not heard before, and I will keep them in mind as I hear discussion regarding healthcare in the future.

2 thoughts on “Health from an Economic Perspective

  1. Although I did not attend this Rose Café (I wish I had, but I had prior commitments), it sounds like it was very insightful into the pharmaceutical industry in the US. Over the summer I had the opportunity to shadow a physician who was also a trained pharmacists, and so it was very interesting to get her opinion as both a doctor and a pharmacist on the pharmaceutical industry. My own opinions aligned with hers in that life saving drugs should be appropriately expensive, and drug companies reserve the right to set the price of their drugs within reason. Of course, drugs should not be made disproportionally expensive so they are largely unaffordable, but they should also be expensive enough to reward their developers for all of their hard work. As it sounds like Prof. Nicholson mentioned, these rewards motivate other researchers and developers to come up with the next major breakthrough. If there was not a significant reward for developing life saving drugs, then drug research would surely decrease and society as a whole would suffer the consequence. Of course, the current system is heavily flawed, but I think it is important to keep in mind that a free market society and natural competition are imperative for driving innovation.

  2. Wow, this sounds like an amazing talk! I was unable to attend but I have some input I can offer. I do agree that prices are determined by R&D and marketing costs, because in the end, every business is trying to seek a profit. However, in my personal opinion, I do believe that some drugs are highly priced that it is very much difficult for some people who desperately need the drug to afford. This is a major problem because we then see inequality in access to medication. Pharmaceutical companies are indeed aware of their targeted consumers and definitely choose what diseases to focus on based on those demographics, which is why we see faster progress in drug development for some diseases compared to others.