>Actually, I don't think they were trying to pass this off as a "new
>insight". I think they were just reporting within the framework of
>their (mostly unconscious) ideological biases. Also, are you
>suggesting the firms won't ramp up production if the government
>agrees to subsidize their R and D and buy up the additional supply
>at a price that guarantees them a good profit, regardless of how
>much demand is created by a flu pandemic?
Firms will respond to those incentives, but it's a not a normal
market, partially because you have a monopoly supplier with the
Tamiflu license, and the good in question here is public health,
being served by an immunization program. Whether it's an acute crisis
like a potential pandemic, or ongoing standard preventative
immunization programs like MMR and annual flu shots, market rules don't work.
You're more charitable than I towards the WSJ, I think someone sat them down and explained how some core elements of health econ work and how health is a gold standard example of market failure, and it was news to them. So maybe that is an unconscious bias.
PC
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