Friday, August 29, 2008

Regulate Pharmaceutical Prices?

If you glance casually through the black books of the globalisation watchdogs, you'll never find global pharmaceuticals far away from the "worst of the worst" list. In every campaign, some get targeted more than others, and here it's the Pfizers, Johnson & Johnsons and company that bear the major brunt of the attack.

The concerns are fully understandable. We have volumes of sickness with a ready cure, and by virtue of a patent they earned through research and development, a pharmaceutical powerhouse has full control to set whatever price they like, regardless of what their customer can afford. That, at least, is how the matter is viewed by the antagonists.

While I am a strong proponent of the free market system, to deny that I feel a little queezy about the setup would be clear indication that my heart was replaced by a biomechanical pump at a young age, probably one with a pharmaceutical logo on it! Nevertheless, we have to look at the implications of taking action on this matter.

My interest in this matter was perked by speaking at length to a senior official in the KZN Dept of Health (DOH) yesterday. Working in the hospitals as a pharmacist for years, he now serves as a supervisor in the province and monitors the purchase, provision and use of the medicines that the department uses. There is an obvious bias to sourcing locally, one I support, but more rare drugs as well as uniquely patented ones are sourced from international firms.

As an aside, I should mention that in some cases, contracts are given to BEE firms who source from Indonesia and Malaysia rather than to white-owned firms in South Africa. How crazy is that? In fact, how corrupt is that?!

That aside, what has emerged is of grave consequence. The DOH has a special list of high priority drugs that are critical to operations. But there are no industries willing to produce them. Why? They can't make any money off them - the government sets the price too low and there's no interest from the private sector. This is a critical situation!

What happens is that these firms now switch to the private sector, scale down their operations (government is the major buyer in the market), and when the government has a shortage and needs supplies, the firms can only promise a tenth of what is needed. The government is now either stuck, or has to switch to paying high market prices to overseas suppliers.

Let me say right here that what is occurring here is indeed free market trade, and the government is not in contravention of that. DOH is simply a buyer and the manufacturers are the suppliers, and the free market system involves the constant play-off between the two, which usually results in some kind of equilibrium.

So who buckles at this point? There are sections of activists suggesting we force a price on the manufacturers. If the price is below production costs then this is clearly unfeasible. If the profits are huge, and the market is open (ie. government hasn't regulated it!), new entrants will come in because the opportunity is so good, undercut the others in order to get contracts and sales and force the price down.

There are three scenarios left. Firstly, the profits may be insufficient to entice new suppliers. There is no problem here really then. Secondly, the startup costs may be too steep in terms of technology, skills required and basic financial outlay. Frankly, in my view if the market is that good, then some big competitor will come in with the necessary funds - the open entry principle is important again. It's fascinating in this example that you could even have multi-national corporations coming in from the outside to compete with other multi-nationals and force the price down.

The last scenario is where a patent allows one company to have complete dominance and set unfair prices. I'm fascinated to know how often this occurs in practice. I'll be honest and say I'm not really sure on this one. What if there is only ever one cure for AIDS and some company finds it, patents it and has subsequent monopoly control? The first question is: can there ever be only one cure? Secondly, would they have developed the cure without the incentive? (That's meant to be an open question, not a rhetoric one)

My general take is that in practice, free market works better than regulation, so if in doubt, stick with free market. I personally don't feel that we're at the point of needing to intervene, but we do have a role to play in giving feedback to the companies. To show a headline like "Pfizer charging way too much for medicine" can cause people to stop buying other general Pfizer products, causing them to rethink their strategy. The simple act of protesting without regulating is fine, because it gives consumers the freedom to make an informed choice, and informed choice is what makes the free market tick.

Monday, August 18, 2008

The Perfect Politician: Future Career Path

There are plenty of good politicians out there. They're running around as production managers in industry, manning hospitals, producing albums and living out ordinary lives. Frankly, who wants to be involved in politics? All the evidence seems to indicate that if you want to achieve anything useful in the political realm, you have to play the usual game of trickery, subtle lies, back-stabbing and support mongering. It seems that politics is caught in a self-destructive cycle: there are no good politicians, because the politics game is so dirty, because there are no good politicans.

It's time for a fresh image, for the dream, for the ideal. It's time for the ACDP to present the fresh image of the "Perfect Politician". It's time to get back to the good young people and present the community leader that all the good folk look to for protection, for a smooth running city and for integrity in a dark world. There are people who are ready to play that role, but they need to be put in the right support structure so they don't walk that path alone and find themselves "losing the faith" as so many good aspirants do when they enter the political realm.

Truth be told, much of politics is tedious. Winning the vote is hard work, especially when you know that you're unlikely to win it without extravagant promises and bold proclamations. And let's face it, you can work hard and not even get into the media, so people may never know about you. When you get into the role, the public spare nothing in criticising whenever something goes wrong, regardless of the good you've done. You're expected to do the right thing, it's taken for granted and goes unnoticed and unappreciated. And the dirty guys are waiting for your smallest slip-up to use in their next campaign.

There are rewards of course. The fame, prestige and attention comes aplenty. Salaries are decent - better than what most receive, but not as much as a skilled professional might get (you'll earn between R8000 and R14000 as a counsellor in KZN). Even better, you get to play a role where you do really impact on the lives of many people. You plan city layouts, you put protections mechanisms in place, you decide on rates, bylaws and regulations. Your work touches a lot of people.

I guess the sense of power is what draws a dangerous crowd to the arena, but rather than play modest and back off, which is the tendency sometimes among the good, there is a need for people who will step into the arena and not shy away from the bright lights. For this very reason, we need to begin proactively targeting young people with potential again, and not wait for them to come to us. I would rather have a bright spark working in government than ticking over somewhere in a highly paid position in some multi-national corporation.

The key to roping in the next generation is to start afresh and renew the image: what is a perfect politician? Let's get this train back on the rails of idealism. While reality sometimes requires a slight shift away from the ideals, we sure have veered a long way off and can go some distance to restoring the dream.

Wednesday, August 13, 2008

Separation of Church and State?

Before anyone can ever begin this tense debate, you have to define what you mean by "separation of church and state". We often bring contradicting images to this topic and tend to argue the same points without realising it.

There are probably two main understandings here. This separation to some means that the church structure should not be entrenched in government in the way it was in the middle ages. To others, religion should not be involved in government. If you have a third view I'd also love to hear it.

It would be difficult to argue for a specific church structure to become the defacto for a country. I've grown up in the church and have a fair grasp of church history, and I've seen enough to know that church leaders are fallible and that a church denomination can get way ahead of itself. The wonder of Christianity is not the church, although the church should be a reflection of what's good about God. When the angle of the mirror changes, it stops reflecting the good aspects of God and begins reflecting the depravity of man, with its power struggles, selfishness, dishonesty and all the other aspects I'm sure you can easily fill in. History has shown that the influence and effectiveness of different denominations can shift and some have fallen away as they drifted away from God, while others have strengthened as pioneers within them have steered them back to their Christian roots. This "free market" principle should not be overridden by the state.

Religious involvement is an entirely different matter. Let me put across my view in a series of questions. Are ethics involved in government? Do government decisions have relevance to society's ethical views? Undoubtedly. You only need to look at several of the hot issues like abortion, corporal punishment, the justice system, gay marriage and pornography, and realise that there is no way a government can avoid a ruling that upsets at least one party. There is no passive position that can avoid these issues altogether.

The second question is: is there a universal set of moral values? In other words, if a religion is pushing for a set of ethically-based legislation, are they infringing on some kind of universal moral code? Imagine that a religion is wrong for wanting to ban gay marriage - an approach that avoids religion might say that's imposing on individual freedom. But if you take that approach, then you can't say underage pornography or rape is wrong. If you're taking active legislation to ban these, then you're taking an ethical standpoint. Where did those ethics come from? Why can't business operate in a devious manner? And when you explore ethics, you'll find quickly that opinions are indeed divided on a wide range of topics.

Given that a government cannot decide on certain ethics-related legislation in a way that pleases everyone, who decides which side to take? Why are the non-religious lobbies automatically right and the church groups automatically wrong? Frankly, both should have a chance to have their input, and we use the democratic process to facilitate that.

At the ACDP we have full respect for the democratic process and we have no intention of making laws that require everyone to be a Christian (like they had in the middle ages). We do however have ethical beliefs, just like the non-religious groups do, and we believe our beliefs produce a better society for all. If those beliefs happen to be grounded in the Christian faith, that's no reason for them not to be considered. If we want unborn babies to have their lives protected, well that's worth legislating. If it takes religious involvement to stand up for the unborn, then it's about time the religious got involved.

Tuesday, August 5, 2008

A Prayer for the Zuma Case

The best time to pray is always now...

Father God, we pray for this pivotal case in South Africa's future, where Jacob Zuma goes on trial for alleged offences. We understand the tensions between different worldviews, the chance of dashed hopes either way, of hopes and aspirations hanging on either side of this verdict.

Above all, we pray for truth and justice, that even as each of us stand accountable before You, may each of us stand accountable before the law. May the outcome of this case be fair and just in the minds of all and may the case be presented in a such a way that the arguments for and against, along with the presentation of the facts, be clear so that all can understand. If there are hidden agendas or details that could unfairly sway the result, may they be brought to light.

May this be a time when the judges are inspired by a sense of purpose. We pray that they think beyond personal prejudice, either way, and see the picture in its fullness with clarity, conviction and resolution. May they hear the cries of the good people in South Africa and may they march forward on that expectation, leaning on it and fulfilling it. We also pray for their protection during and after the trial.

May Jacob Zuma know his position in this trial. If he is not guilty of the charges, may he have the presence of mind to present his case. If he is guilty, may he have the courage to lead this country in the right direction by being humble and acknowledging his error. Either way, may he be a better leader by the end of it, with a greater sense of where he stands in relation to You.

Finally, may the outcome and announcements be met without violence or undue remonstration. May the proceedings be conducted in respect and may we all walk away with a sense that no one is greater than the law, let alone Your law.

Your will be done on earth as it is in heaven. Amen.

DISCLAIMER: This blog serves as a commentary and the views presented are not necessary the official views of the ACDP. For official statements and contact details, visit: