IP: Cipro Shortage: An Invented Scarcity (fwd)

[David Farber <dave () farber net>]

> To: dave () farber net
>
> dave,
>
> an alternative view of the "anthrax scarcity".  the mises institute 
> promotes liberty and "austrian economics".  interesting emails i get each 
> morning.  anyone can subscribe to them.  the daily articles are also on 
> their home page.
>
> -b
>
>
> ---------- Forwarded Message ----------
> Date: Thursday, October 25, 2001 8:11 AM -0500
> From: Mises Institute <heinrich.11 () lists postmastergeneral com>
> To: brett () the-watsons org
> Subject: Cipro Shortage: An Invented Scarcity
>
> > http://www.mises.org/fullstory.asp?control=812
> >
> > Cipro Shortage: An Invented Scarcity
> >
> >
> > by Ilana Mercer
> >
> > [Posted October 25, 2001]
> >
> > Bayer AG, the German pharmaceutical giant and manufacturer of the
> > anthrax-fighting drug Cipro, is experiencing a windfall. The sudden
> > demand for Cipro could not have come at a better time for a company that
> > had been in a slump and was hemorrhaging due to a considerable
> > operating-profit shortfall. The financial press's accounts of how Bayer
> > was scouting for bailout partners have now given way to detailing Bayer's
> > moves to triple its production of Cipro. With Cipro, Bayer will be vying
> > for some of the $643 million the Bush administration plans to put toward
> > increasing stockpiles of antibiotics.
> >
> > Indeed Bayer is scrambling to fill every order placed by government. The
> > company is running its facilities 24 hours a day, seven days a week; has
> > placed its Connecticut plant on an accelerated production schedule; and
> > has even reopened a defunct German plant. Try as it may, the likelihood
> > that Bayer will meet consumer demand for Cipro is slim, if not anorexic.
> >
> > In a command economy, government would decide when the demand for anthrax
> > tablets has been satisfied, but not in a free market. In a free market,
> > consumers direct supply and demand. And in a free market, increased
> > demand leads to increased supply, as producers compete with one another
> > to satisfy the demand. When the demand for Cipro has approximated the
> > supply of Cipro, buyers?not the government?will have indicated their
> > needs have been satisfied. But Bayer's promise to triple the production
> > of Cipro?cranking out 200 million tablets over the next three months?may
> > do little to satisfy a demand driven by almost as many Americans.
> >
> > When there is a shortage of a good, it is safe to say that it is a result
> > of government incursion into the economy. In the Cipro shortfall, the
> > likely culprits are FDA regulations and the patent system.


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