Hot and bothered over the lack of prices

Apparently there’s a shortage out there of HRT drugs:

Women in the UK are again facing shortages of some HRT products, with warnings they could persist for weeks. We take a look at the situation.

So, why?

A supply and demand mismatch is causing the shortage of estrogen patches,

This leads to:

But a shortage of patches this year is forcing women to search multiple pharmacies for patches or consider alternate doses or treatments.

Wholly agreed that this is all non-optimal. But it is also true that no one does face prices in this market, whether in the US or UK - supply is covered either by insurance or the NHS. If people doid face rising prices in a time of supply shortage then two things would happen. Profits at suppliers would rise and so too would the incentive to get supply rising. Further, demand would fall - those who would quite like but do not truly need would drop out of consumption leaving the available supply for those who truly need.

Yes, yes, of course we’d all prefer that all who desire can have but that’s not where we are right now. So, do the best we can from where we are.

Which isn’t, not really, the point we actually want to make. Rather, that if we don’t use prices to match supply and demand then supply and demand are going to get matched anyway. Matched by some desiring and not getting, matched by the costs of queuing, matched by the costs of hunting across multiple pharmacies and so on.

That is, a mismatch of supply and demand just is going to lead to increased costs. We don’t have the option - not until the mismatch is sorted out - of not having those costs. We do have the option of how those costs are expressed. In wasted time, hot and bothered women traipsing around pharmacies? Or in headline prices which at least have the second effect of encouraging an increase in supply?

As so often the issue is not whether we’d prefer not to have this problem it’s that the problem exists so what now?

Tim Worstall