Arnold Relman, in the New York Review of Books:

Nearly a half-century ago, Stanford economics professor Kenneth Arrow, later a Nobel laureate, convincingly argued that medical care cannot conform to market laws because patients are not ordinary consumers and doctors are not ordinary vendors. He said that sick or injured patients must rely on physicians in ways fundamentally different from the price-driven relation between buyers and sellers in an ordinary market. This argument implied that, contrary to the assumptions of antitrust law, market competition among physicians cannot be expected to lower medical prices. And since physicians influence decisions to use medical services far more than patients do, the volume and types of services provided to patients—and hence total health costs—need to be controlled by forces other than the market, such as professional standards and government regulation. But Arrow’s argument was largely ignored in the rush to exploit health care for commercial purposes that ensued after the passage of Medicare and Medicaid in 1965.

When the organizations that set professional standards — the whorish American Psychiatric Association, for instance — are themselves market law conformists, what hope for change? That organization, speaking of excess volume and types of services, is even now revising the profession’s diagnostic manual to medicalize more and more non-medical human behaviors. There’s money in it.

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Update: Recall Marcia Angell in the New York Review of Books:

Since there are no objective tests for mental illness and the boundaries between normal and abnormal are often uncertain, psychiatry is a particularly fertile field for creating new diagnoses or broadening old ones. Diagnostic criteria are pretty much the exclusive province of the current edition of the Diagnostic and Statistical Manual of Mental Disorders, which is the product of a panel of psychiatrists, most of whom, as I mentioned earlier, had financial ties to the pharmaceutical industry. [Christopher] Lane, a research professor of literature at Northwestern University, traces the evolution of the DSM from its modest beginnings in 1952 as a small, spiral-bound handbook (DSM-I) to its current 943-page incarnation (the revised version of DSM-IV) as the undisputed “bible” of psychiatry—the standard reference for courts, prisons, schools, insurance companies, emergency rooms, doctors’ offices, and medical facilities of all kinds.

Given its importance, you might think that the DSM represents the authoritative distillation of a large body of scientific evidence. But Lane, using unpublished records from the archives of the American Psychiatric Association and interviews with the principals, shows that it is instead the product of a complex of academic politics, personal ambition, ideology, and, perhaps most important, the influence of the pharmaceutical industry. What the DSM lacks is evidence. Lane quotes one contributor to the DSM-III task force:

There was very little systematic research, and much of the research that existed was really a hodgepodge—scattered, inconsistent, and ambiguous. I think the majority of us recognized that the amount of good, solid science upon which we were making our decisions was pretty modest.

Lane uses shyness as his case study of disease-mongering in psychiatry. Shyness as a psychiatric illness made its debut as “social phobia” in DSM-III in 1980, but was said to be rare. By 1994, when DSM-IV was published, it had become “social anxiety disorder,” now said to be extremely common. According to Lane, GlaxoSmithKline, hoping to boost sales for its antidepressant, Paxil, decided to promote social anxiety disorder as “a severe medical condition.” In 1999, the company received FDA approval to market the drug for social anxiety disorder. It launched an extensive media campaign to do it, including posters in bus shelters across the country showing forlorn individuals and the words “Imagine being allergic to people…,” and sales soared. Barry Brand, Paxil’s product director, was quoted as saying, “Every marketer’s dream is to find an unidentified or unknown market and develop it. That’s what we were able to do with social anxiety disorder.”

Some of the biggest blockbusters are psychoactive drugs. The theory that psychiatric conditions stem from a biochemical imbalance is used as a justification for their widespread use, even though the theory has yet to be proved. Children are particularly vulnerable targets. What parents dare say “No” when a physician says their difficult child is sick and recommends drug treatment? We are now in the midst of an apparent epidemic of bipolar disease in children (which seems to be replacing attention-deficit hyperactivity disorder as the most publicized condition in childhood), with a forty-fold increase in the diagnosis between 1994 and 2003.[18] These children are often treated with multiple drugs off-label, many of which, whatever their other properties, are sedating, and nearly all of which have potentially serious side effects.