Free Markets and Your Health

Eric Raymond is a leader of the open-source movement, and, from what I gather, a self-proclaimed libertarian. He believes in the free market economy so much that he is upset that Massachusetts is forcing Walmart to sell the morning-after pill. Not because he thinks the pill is bad, but because he thinks “free enterprise” means Walmart should be able to sell what it feels like selling, and not sell what it doesn’t feel like selling.

I’ve long been amazed by how libertarians think the free market should apply to everything. I’m a big believer in free markets, but there are clearly exceptions to the rule. If hospitals were truly free to charge any price they chose, can you imagine the price discrimination at the ER? Oh, an Amex Gold card, I see…. that will be $50,000 to save your life today. It’s so we can provide you with the best service, you see. (And I’m not even getting into the truly worrisome issues regarding health services for the poor.)

So the thing about prescription drugs is this: it’s not a free market, and it will never be a free market. That’s what the “prescription” in prescription drug means. You have to have a license to sell prescription drugs. A license from a government agency. In other words, you’re granted the right, by the government, to specifically sell that type of highly regulated product. And it makes perfect sense for the government to say, in return for this right, you have to behave a certain way. Like, for example, you must provide full service, not just the service you want.

The government has an interest in the health of its citizens, and, in an obviously regulated field, it has every right to leverage this regulation to ensure that the service is properly dispensed. Pharmacists and drugstores that artificially limit the health services they offer should not be granted the priviledge to be health-care providers in the first place.

(hat tip to Gerald for getting me thinking about this more deeply recently.)