Let the market right itself

Published: June 21, 2010 at 10:27am


People have to buy medicines all over Europe, but in Malta those medicines are a political bone of contention. Electors complain about prices and availability and political parties react with threats to importers.

What the political parties should be doing instead is taking the long-term approach of going to the heart of the matter: Malta’s drugs-dependency culture. People here just love their medicines and talk about them like familiar friends. This is a society in which people are actually on first-name terms with brands of antibiotics.

I’ll get into conversation with somebody in a queue and she’ll say she’s taking something that sounds to me like the name of a low-growing shrub. I look at her blankly and she looks at me like I’ve just returned from 40 years in the desert. It’s like I’ve just demonstrated ignorance of Nescafe or Smarties.

They love being chronically dependent on drugs and they accept the situation as a given, instead of looking for alternatives or even considering that there might be alternatives to look for.

Elsewhere, finding out that there’s something wrong with you would be considered a problem. Here, it’s a godsend, because it means a prescription, and drugs. Goodie.

People fight and argue with doctors who don’t prescribe drugs and who tell them that these are not necessary. They brandish their prescriptions like a badge of honour and talk with pride and perverse pleasure about the medicines they’re taking.

I can’t seem to go anywhere nowadays without being skewered on the prongs of a monologue about medicines, doctors, chronic this and chronic that. They keep talking at you about their pills even when your eyes have glazed and you’re quite obviously about to keel over.

The rampant, raging hypochondria and enervating self-absorption are enough to make me climb the walls. Here’s some advice for free: even if you are afflicted with cancer, don’t mention it until asked, and when asked, dismiss all enquiries with dignity. “Oh, I’m getting along, but thank you for asking.”

I’ve lost count of the number of people who don’t seem to understand that ‘how do you do’ is a greeting and not an invitation to list the entire contents of your medicine cupboard. The only people you should bang on to about your aches, pains and concerns are your spouse, your mother and your best friend, and you can push it even there.

So many people here seem to love to be ill, as long as it’s not life-threatening and will not leave permanent scars. And when that illness involves pills and potions, they’re thrilled. The more pills they have to take, the more important they feel. No, I don’t get it either.

It’s a whole new field of attention-seeking behaviour. But strangely enough, these same people who love their drugs won’t take the cheapest and most effective one available and are deeply suspicious of it.

They won’t pop a couple of paracetamol and instead drag on through the day with a banging headache and the attitude of somebody about to be broken on the rack.

“Have one of these,” you say, chucking a packet at them, and their response is: “Le, ta, hi. Jien ma niehux minn dawk. I prefer to let it run its course.” It’s enough to make you want to turn up the music and switch on a hundred vacuum cleaners all at once. Maybe taking a headache pill removes the claim to temporary martyrdom which having a bad headache gives them.

They get more pleasure from groaning around with a headache than they do from popping a pill which takes the headache away. Taking courses of antibiotics or other ‘serious’ medication, conversely, gives them a claim to martyrdom where none might exist otherwise. A cold is a cold is a cold, but if you’re on antibiotics for that cold (pointlessly), then. . . wow.

People have created this suppliers’ market with their desperate demand for medicines of all kinds and shapes, and with their insistence on prescriptions for things they don’t really need but so obviously want. They complain about the price of antibiotics and when told ‘Just don’t take them’, their reaction is ‘But what do you mean?’

Simple, what I mean is this: very few of those complaining about the price of antibiotics – the main bugbear in the market for medicines – actually need to be taking them. Before you begin complaining about the price, think about why you’re swallowing them in the first place.

Then there are all those who have hooked themselves onto cholesterol-lowering drugs while not making the lifestyle changes that would sort the cholesterol out in a few months.

We’re a nation of drug addicts – legal ones. While the people of northern Europe do what they can to avoid taking medicines, we see what we can possibly do to get a prescription. And then we have the added pleasure of complaining about the price.

Then the politicians weigh in, with all the wrong answers. The government thunders at importers that it is considering importing some medicines itself – fabulous, government as a commercial enterprise; what a ruddy stupid thing to say – and the Opposition criticises the government for saying this but then goes one better by telling the government to “name and shame” importers who are not behaving themselves.

If the government is truly considering importing medicines to make up for interrupted supply, then what can I say except that it has probably cracked under pressure and temporarily taken leave of its senses. It is not the business of government to fill gaps in the market. It is not the business of government to be in business, full stop.

Gaps in the market are filled by the market. The market, like nature, abhors a vacuum. Those gaps stay open only for the length of time it takes to notice them and then work out how to fill them.

In a highly competitive market like the Maltese market for pharmaceuticals, where demand is consistently high, the gaps are filled by parallel traders if they are not filled by the appointed agency.

The consumer is not interested in the pros and cons of parallel trading versus the appointed agency. The consumer is interested only in being able to buy the real thing when he wants it, and if it’s cheaper then so much the better.

Whatever and however, the market should be left to sort itself out through the forces of demand and supply, and the government should stay out of it. Its only role here is to conduct a series of campaigns, through the agency of its health information department, seeking to wean people off their drug-dependency and their drug culture.

But then, of course, the importers might object even more vociferously than they do at the suggestion that the government might enter into competition with them.

While the government kvetches about the supply of medicines, the Opposition stays in character and kvetches about the price. Joseph Muscat, true to his former master’s voice, has instructed the government to broadcast the names of importers who are ‘abusing’ the price of medicines. So we have child abuse, drug abuse, alcohol abuse and now, price abuse – a new form of addiction and perversion.

The last time we had anything of this sort was back in the summer of 1997, when Muscat’s erstwhile puppet-master, after almost a year of dismantling value added tax and replacing it with the convoluted CET, took to the stage to denounce and expose to public opprobrium those businesses which, he claimed, had put up their prices and blamed his lovely CET for the hike.

And now here we have Sant’s loyal disciple, urging Lawrence Gonzi to do the same thing. I don’t know about you, but the sight of the prime minister pettily reading from a list of importers and denouncing them for overcharging – real or imagined – would drive my regard for him right down through the floor.

But then I was raised in the Mintoff era, when this sort of behaviour had real resonance and the price of a can of mackerel was an issue of national importance, recited by the finance minister in his budget speech. All I can say is: il-Bambin jehlisna.

The government, Joseph Muscat said, should make sure that consumers are protected against businessmen who raise their prices unnecessarily. Businessmen, eh? Not businesses, but businessmen (and not even businesswomen) – because companies don’t exist in his netherworld. Also, Muscat seems to be unfamiliar with the essential principle of selling goods for the highest price they can fetch on the market, a price which is then knocked down by falling demand and increasing competition.

His is the kind of reasoning that wipes me out with mental exhaustion. Haven’t we moved way beyond the mentality of the nanny state protecting the poor, weak consumer from nasty overcharging by horrid and unscrupulous merchants who spend their evenings counting their money? It is not for the government to regulate prices. The market does that. Look how the price of everything has fallen in real and relative terms since the onslaught of extreme competition in the aftermath of EU membership and the outsourcing of production to the Far East.

Clothing is now so cheap that girls buy something new to wear every Friday and chuck it away after a few weeks. Furniture – ditto. White goods – ditto. Food – ditto. Electronic and digital equipment – ditto and ditto. Medicines are no different. The days of the market being monopolised by authorised agents are long, long gone. Parallel trading is now the order of the day, and whether the authorised Malta agents of pharmaceutical manufacturers love it or hate it (they hate it, of course) is irrelevant. It exists, and it is one of the strongest dampeners on prices that you can get.

Price control is bad news for everyone, but it is especially bad news for consumers, who are best served, in the end, by the proper functioning of the market. Price control is one of those deeply unpleasant statist measures which might appeal to the uneducated and the uninformed but which, to others, sound some very loud alarm bells.

Instead of quibbling about the price and availability of pharmaceuticals, the government and the Opposition should try to find out why so many of their electors consume them in vast quantities. Knowledge about the market, especially where it affects health and the ensuing cost to social services, is their proper role; interfering in the market is not.

This article was published in The Malta Independent last Thursday.

18 Comments Comment

  1. Etil says:

    I do not agree with your reasoning this time, Daph. Agree that the majority of the Maltese have become hypochondriacs but that does not justify the excessive difference in price when purchasing the same medicine from overseas.

    I would accept it if a justified explanation is given of why the difference is so much, e.g. because of import duty, delivery to Malta, etc.

  2. Peter Vella says:

    While I agree that most Maltese are hypochondriacs and pill-poppers we must not diminish the problem of the over-pricing of medicines. The hardest hit are the elderly or those who suffer from chronic illnesses, who are on a pension and who do not really have the choice of not buying them. I know someone who works in the government department that monitors the pricing of medicines and he is adamant that there is abuse.

    I am all for businesses profiting from their activity but abuse is abuse and should not be allowed. While I agree that a free market under normal circumstances does help keep prices down, let’s not forget that cartels and unofficial agreements on minimum pricing do exist.

    [Daphne – Cartels are illegal in themselves, medicines or no medicines.]

    With Malta being such a small place where market competitors are normally on first name basis, it is that much easier for this to happen. I have experienced this directly in the industry I used to work in (not pharmaceuticals).

  3. Joseph A Borg says:

    I’ve lost count of the number of people who don’t seem to understand that ‘how do you do’ is a greeting and not an invitation to list the entire contents of your medicine cupboard

    I see your social circle is crossing the geriatric threshold, Daph!

    [Daphne – It isn’t. But ever since I was in my 20s, I have had to go to receptions and that kind of thing where everyone is at least one or two generations my senior. People my age (40s) don’t talk about ailments because so many of them are struggling to recapture their youth (and some of them never left it mentally), so even if they are riddled with illness they won’t admit it. Instead, the women discuss weight loss and the men sort of discuss cholesterol, but only when they think no women or young people are listening.]

    Whatever and however, the market should be left to sort itself out through the forces of demand and supply, and the government should stay out of it

    You cannot make such blanket statements unless you’re a libertarian advocating for small (inexistent government)! You sound like Ron Paul or Ayn Rand… I’m not impressed… at all

    • Robert Vella says:

      Ron Paul and Ayn Rand are completely different. Ron Paul is a minarchist who believes in stable currency and the individual liberty/responsibility maxim.

      Ayn Rand and all her followers are deeply disturbed. The woman idolized a child molester for his ‘artwork’.

      • Joseph A Borg says:

        Ron Paul seems to be a young earth creationist with an unhealthy appetite for excessively small government, belief in self-righting markets – an odd-ball libertarian and his son seems to be much worst…

  4. TROY says:

    My God! This article just reminded me of the Mintoff budgets – it-tonn taz-zejt rohos 1c5.

  5. Chris Ripard says:

    I wish I knew what lifestyle changes could lower my cholesterol. I’ve cut out virtually all animal fats, took up walking and jogging, quit smoking and took a proprietary cholesterol reducing drink after every meal. Result – after a year and a half of this regime – cholesterol went down from 7.02 to 6.54.

    I have now been put on statins and, for your info they are a) expensive (funny how the generics keep disapearing off the market) and b) have unpleasant side-effects.

    As you know, Dad keeled over in 1981, from a heart attack (aged 48), so there is strong evidence of a genetic predisposition.

    My point? Not everyone is an “ghaggieb”. We should have trust in the medics and act on their advice.

  6. Iro says:

    You are so right here. I had thought that conversation invariably turns to illness and pill popping because of my profession but clearly such talk is widespread.

    I had found a quick way to nip this in the bud. I either tell them to strip off and hop on to the buffet table for an examination or I declare that I left my medical brain in the fridge at home and the one I am wearing is only designed for small talk.

    As for the cost of medication, this should remain subject to market forces and the state’s duty should remain restricted to ensuring that the truly essential medicines are constantly available and trying to sniff out any cartel between importers.

    Only a few hundred of the many thousands of drugs available are really necessary to maintain well-being; the rest are either simple alternatives or have advantages that in other sectors of the market would be considered as optional extras.

    There is, of course, the occasional unique ‘wonder drug’, but within reason the developer has a right to recoup his costs and make a profit.

    If this is not allowed then medical research funding from drug firms will grind to a halt. Again it is up to the state to apply principles of equity and health economics in deciding if it should include this new drug into the government list of subsidised drugs or not.

    • Stefan Vella says:

      Any innovative medicinal product (aka as the originator in industry jargon) will benefit from a 10-year exclusivity period whereby no generics (aka copies) can be placed on the market during that time. It is considered ample time to recoup any associated R&D costs.

      Parallel imports are another story since these are essentially the same originator product packed in specific market liveries. There are no impediments towards placing these on the market as long as the relevant EU directives are satisfied.

  7. Stefan Vella says:

    Generics and parallel imports provide an efficient and yet market driven solution to high priced medicinals. The link below highlights Ireland’s changing stance towards generics.


  8. Karl Flores says:

    On the one hand, the MLP bombards us with accusations, that it is Gonzipn to blame that retailers, are closing down because it was virtually impossible for them to make ends meet with the hike in costs to manage their place.

    On the other, the same MLP tells us that we are being robbed because of the excess in profits, that retailers make.

    Skond il-muzika nizfnu

  9. Karl Flores says:

    Doctors in general, in Malta, give excellent service and in many cases their fees are very reasonable, especially when compared to those charged by professionals overseas.

    In many a case, a G.P. who is called for a visit to attend to one person ends up ‘checking’ the whole family.

    I think it is time that alternative methods are used in the healing procedures, such as herbal medicines, acupuncture, and acupressure.

    When an immeasurable problem keeps churning in our minds, causing stress and heart problems, lowering of our testosterone, leading to obesity, etc, exercise (aggressive for the young and healthy) and a very long walk for the less young, is sometimes enough to get worries and negative thoughts off our minds, never forgetting the value of nutritional food instead of junk.

  10. vonmises says:

    Talking about free markets?!

    The illustrious MP David Agius, is currently engaged in a crusade to actually meddle into private business companies and direct them what football rights to purchase and distribute!


  11. Puzzled!!! says:

    I fully agree with all your statements about a free and competitive market, Daphne. However, there is in fact abuse most likely via illegal price-fixing which undermines an open and free market system.

    Perhaps what the government really needs to do is implement some enforcement in this area such as via some sort of a “competition bureau” which ensures that there is no anti-competitive activity taking place and that all other activity by importers and merchants (not just pharma) is conducted fairly and in the spirit of a true open market system.

    Regardless of any of the above, if medicines are cheaper elsewhere, what stops people from buying them from abroad? If they did so, that would certainly force merchants here in Malta to become more competitive.

  12. Karl Flores says:

    I bought (online), a brand new rear/tailgate glass, from England for €300 for a Japanese car, which included door to door delivery (2 days) costs, last October.

    From the Malta agent it costs €700 (and 5/6 months waiting), from past experience, when parts are unavailable.

    Five hours ago my mechanic told me that a German car which I own needs to have two lambda sensors changed.

    The same agent told me they cost €247 (they are available). I have just checked (online): £24.95 each. I’ll buy them online.


  13. Stephen Saliba says:

    As an individual who unfortunately has to make use of medicines I assure you Daph that the prices charged here bear absolutely no relationship to those abroad – for exactly the same product.

    I cannot believe that an unofficial cartel is not in operation as otherwise market forces will favour the one with the best price and best product.

    [Daphne – To have a cartel, you must have the same product brought into the country, or manufactured domestically, by at least two companies. The large pharmaceutical companies sell in Malta through official agents. Any competition must therefore come from companies working as ‘parallel traders’ – buying the same products through wholesalers or distributors outside Malta, rather than from the actual manufacturer – and selling them here in Malta. You cannot have a cartel in that situation.]

    Yet in medicines everything is much higher by more or less the same percentage. Strange! I for one would applaud government if it steps in and somehow manages to get these prices to a more decent level.

    [Daphne – Really, you don’t know what you’re talking about. State intervention in pricing is always a bad idea. And believe me, it leads to more corruption and cheating than you will every know. We may have missed out on the beautiful experience of state intervention in the pricing of medicines in the 1970s and 1980s, but I didn’t. Put simply, it is a situation which of necessity creates shortages in the market: if an importer doesn’t consider it worthwhile to import product X because the government is bitching on about the price and sending in its investigators – or, as was the case back then, the police – then it simply won’t import it. Businesses are there to make money, not to run charitable enterprises importing low-profit-margin or no-profit-margin products. And really, please don’t talk about ‘abroad’. It really annoys me. This is skewed vision. You can’t look at ‘abroad’ and see only the cheaper medicines. You’ve also got to consider the higher taxes, the immense costs of heating your home, that many families find one car unaffordable let alone four per household, and the rest.]

    I am not against anyone making a decent profit. Very far from it. But having an (unofficial) monopoly distorts market forces completely.

  14. Karl Flores says:

    Dear Douglas, very many thanks for your excellent and informative article/advice.

    I thought, maybe, you could be kind enough, to help us know better re matters of a psychological nature vis a vis its treatment.
    Stress, for ex. causes Cortosil which tells our liver to release excess sugar your body does not need, as a result, arthritis, obesity, anxiety, insomnia, all related, are created.

    Insomnia causes all the above and many, many more, at times, leading to suicidal attempts.

    It is, also, known that correct methods of inhaling/exhaling and a drinking of pure water, could help reduce, tension, anxiety, phobia’s, concentration, etc.

    Visualization of contended moments, added with a smile, increases our serotonin and endorphin levels in our blood stream.

    Tapping on our meridians, while accepting our pain, is another method that reduces ill-effects, especially, those emotional.

    Little is known that skinny people with a fat belly, are not only produced by a high intake of beer, but because beer or no beer, fat pops up in our belly because it has more Cortisol receptors in it than anywhere else in our body.

    Finally I want to congratulate you on stressing on the need and value of exercise, especially when you stressed in BOLD LETTERS that running/jogging and brisk walking is detrimental to our skeletal system (anatomy), that serves as a framework for the body, especially for those suffering from knee and backache.

    Air-cushioned shoes, that come in various brands, are recommended to lessen the detrimental effects of hard ground.

    We are fortunate, in that, not only, can we see, sea, but, also, enjoy it’s benefits without having to harm our joints, etc.

    I dare add, that those who still smoke/used to smoke, including those with little or nil knowledge, are at a greater risk of ill-effects (heart attacks), especially when exercising aggressively, hoping that they would improve their health, to concentrate better on the nutritional value of fruits and vegetables.

    I will leave the remainder to you, should you please so, dear Douglas.

  15. Karl Flores says:

    Unfortunately, many a time, it is solely because there are billions of €s from the drug industry (including those legal) that we are recommended pills, pills, pills, by those unscrupulous, who are aware that alternative medicine does, in fact, exist. If not to medically heal humans completely, at least, to relieve us from some pain, including the financial one.

    The worse your troubles get the more pills you are given, until you reach the maximum amount our body can take.

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