From: Stefan.M.Gorsch@dartmouth.edu (Stefan M. Gorsch)
Newsgroups: alt.politics.libertarian
Subject: Re: Private product evaluation agencies (was: Might be a FAQ)
Date: 28 Dec 92 03:01:10 GMT
 <1992Dec26.195427.16095@eecs.nwu.e>  
 <1992Dec28.012622.14871@eecs.nwu.edu>
Organization: Dartmouth College, Hanover, NH
X-Posted-From: InterNews1.0a5@newshost.dartmouth.edu

In article <1992Dec28.012622.14871@eecs.nwu.edu>
ian@nasser.eecs.nwu.edu (Ian Sutherland) writes:

> In article <Bzxt5t.B38@newcastle.ac.uk> Chris.Holt@newcastle.ac.uk (Chr
> is Holt) writes:
> >ian@nasser.eecs.nwu.edu (Ian Sutherland) writes:
> >>The thread started out talking (among other things) about
> >>things like drugs and medical treatments.  Can anyone think of any
> >>problems that would occur if evaluation of medical treatments were
> >>handled by such private companies?
> >
> >Time delays, difficulty in gathering information, and cost, to start
> >with.  How many people really want to fork out large amounts of money
> >to be told that a drug they took 5 years ago wasn't safe?
> 
> This isn't what I meant.  The idea is that you'd consult evaluation
> companies BEFORE taking a new kind of treatment, not after.  Those who
> don't want to wait can take the treatment without evaluation.  THose
> who want an evaluation can pick some company they trust and wait for
> the evaluation.  This would be no different than waiting for
> evaluations under the current system, except you wouldn't be forced to,
> and you could choose the evaluator you liked.  This is how I inagine it
> anyway.  Any reason why it wouldn't work this way?

One of the reasons I posted this question using pharmaceuticals as an
example is that they present unique problems not found in the
evaluation of consumer goods. In this case (let's say the testing of a
drug purported to help help patients with ovarian cancer) field testing
the drug entails the expenditure of literally millions of dollars to
enroll patients and appropriate controls in statistically significant
numbers; to perform appropriate blood work, radiographic testing,
tissue biposies, etc.; to induce hospitals and physicians to
participate in the studies, to pay the statisticians, pharmacologists
and protocol managers and so on. This, of course, doesn't include the
cost of necessary preclinical animal testing of safety and efficacy
which is ethically (and currently, in a pre-libertarian world, legally)
required before human trials.

This is economically in an entirely different league from the type of
testing currently conducted by private companies. Testing stereo
equipment or automobiles has essentially no up-front cost by
comparison. Granted, this is not an objection if thousands of people
willingly pay tens of thousands of dollars to purchase one issue of
"Clinical and Pathologic Drug Evaluations"; I doubt this is the case.
Somehow, a private company must come up with, say, 10 million dollars
for every drug it evaluates. As it currently stands, pharmaceutical
companies must provide the requisite data. They finance their work
through 1) sale of stock which in pharmaceuticals typically trade at
about at a P/E ratio of about 20; 2) Marginally increasing the retail
price of their drugs; 3) some of the basic research is financed through
tax dollars. I don't see how an independent research firm will generate
this revenue. Hence my original question, are there not fields which
are best regulated by the government which alone has the power to
compel private concerns to take actions they might not otherwise
undertake? Is there a libertarian solution - I don't see it.


stefan.m.gorsch@dartmouth.edu