Markets come up short in drugs for premature babies

A premature baby, born at 28 weeks, lies in a neonatal intensive care unit at New York University Medical Center on November 10, 2004 in New York City.

If there is a crucial need, markets will provide. Not always, and not in the case of critical nutrients needed to help premature babies. It turns out, America is facing a bizarre shortage of  medical grade basic nutrients such as phosphorus and zinc. The Pittsburgh Post Gazette reports neonatal intensive care units are scavanging to keep preemies alive, sometimes taking from adult patients elsewhere in the hospital.

The reasons are complicated -- a lack of market incentives for companies to produce low-profit drugs, manufacturing issues, and delayed government action -- but the results are clear, patients are suffering. What can be done?

Jay Mirtallo, professor of clinical pharmacy and director of the Masters in Health Systems Pharmacy (MSHSP) program at Ohio State University, joins Marketplace Morning Report host David Brancaccio to discuss.


About the author

David Brancaccio is the host of Marketplace Morning Report. Follow David on Twitter @DavidBrancaccio
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Its a very serious matter for the people, when people suffer the problem for any medical treatment sometimes they face the problem for the medicine. Sometimes medicines not available sufficiently in the market and some low quality of product creates problem for the patient so how can avoid these things is the most important thing.

The story was about critical medical products being unavailable because government regulators shut down the plant that makes them. And that hospitals could not avail themselves of supplies from other countries because government regulators have made this illegal. I don't see this as an example of a market failure, more of an example how regulations can interfere with the operaiton of markets. The disorder came from the intervention, so it would be strange to back to yet more intervention in an effort to regain order.

After hearing it on the radio I looked this story up with the intention of posting a comment, but djmartin really nailed. Would more resonsible reporting look into to nature of the regulations contributing to the shortages? Market failure is a fact of life. This does not appear to be a credible example.

Since the formation of OPEC the elephant-in-the-room example of market failure has been the motor fuel and vehicle sector. OEM auto and truck makers have elected to NOT mass produce natural gas vehicles even though natural gas is readily available thoroughout the US of A and much cheaper, cleaner and safer than liquid petroleum-based motor fuels. The technology required to use this fuel is proven, rugged, reliable and uses the same engine. Auto makers could easily give the customer control of this market by offering suitable vehicles; all that is needed is simple installation of a CNG fuel storage tank; no daunting technical barriers, just a simple design opportunity. But the OPEC led supply-side oil oligopoly has successfully repressed competition from suppliers of non-petroleum natural gas motor fuels in a variety of subtle and not-so-subtle ways. Market forces have failed the consumer.

Difficult subject matter, but the underlying thesis completely misses the mark - this is largely an example of regulatory failure, not market failure. The production is heavily regulated and in fact, it was a regulatory action shutting down a manufacturer that triggered the shortage. Import markets are restricted by regulation, eliminating that market option. And the story didn't state explicitly, but the US healthcare market is anything but a free market, where higher prices for the desired nutrients might attract additional supply.

This is not a commentary on the wisdom of the regulations applied or a rant for unregulated markets in healthcare supply. It is simply the observation that there really isn't a free market or anything close to it described in the story and. Regulatory decisions caused it and regulatory limitations on imports, pricing, and regulatory approval and costs to establish new supply sources prevent a more free market response.

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