/Blood Money

Blood Money


NYTimes: Around the world, scientists are racing to develop and mass produce reliable antibody tests that public health experts say are a crucial element in ending the coronavirus lockdowns that are causing economic devastation. But that effort is being hamstrung, scientists say, by a shortage of the blood samples containing antibodies to Covid-19, the disease caused by the virus, that are needed to validate the tests.

Recognizing a rare opportunity, some companies are seeking to cash in on the shortages, soliciting blood donations and selling samples at rich markups in a practice that has been condemned by medical professionals as, at the very least, unethical.

“I’ve never seen these prices before,” said Dr. Joe Fitchett, the medical director of Mologic, one of the British test manufacturers that was offered the blood samples. “It’s money being made from people’s suffering.”

I am reminded of Walter Williams who asks his students whether it is wrong to profit from the misfortune of others:

But I caution them with some examples. An orthopedist profits from your misfortune of having broken your leg skiing. When there’s news of a pending ice storm, I doubt whether it saddens the hearts of those in the collision repair business. I also tell my students that I profit from their misfortune — their ignorance of economic theory.

A price is a signal wrapped up in an incentive so if you want a strong signal and a strong incentive you need to let prices rise. The prices in this case don’t even seem that high:

From March 31 to April 22, prices asked by Cantor BioConnect for its cheapest samples — always sold by the milliliter, the equivalent of less than a quarter of a teaspoon — rose more than 40 percent, to $500 from $350.

Bear in mind the costs of collecting the sample, including nurse time and PPE. Some samples which are especially rich in antibodies, do sell for prices that are well above cost which is not surprising as those samples are in high demand as they may offer a cure.

Do the firms willing and able to pay the highest prices necessarily have the best science? No, not necessarily, but on balance the decentralized allocation process offered by markets and civil society will likely be far more effective than centralized, political allocation. We also know from field experiments around the world that higher prices for blood increase supply, a key consideration.

As Hayek said the moral rules of the tribe which appear natural to us–like don’t profit from misery–cannot maintain a civilization so we struggle between what we think is right and what actually works to prevent misery.

There can be no doubt that our innate moral emotions and instincts were acquired in the hundreds of thousand years—probably half a million years—in which Homo sapiens lived in small hunting and gathering groups and developed a physiological constitution which governed his innate instincts. These instincts are still very strong in us. Yet civilization developed by our gradually learning cultural rules which were trans­mitted by teaching and which served largely to restrain and suppress some of those natural instincts.

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