Magazine article Insight on the News

New Drug Breakthroughs Coming If Feds Will Keep Their Hands Off

Magazine article Insight on the News

New Drug Breakthroughs Coming If Feds Will Keep Their Hands Off

Article excerpt

As Americans buy plane tickets via home computer and use Global Positioning Satellites to steer their cars, it's no surprise that they have grown ho-hum about today's stunning advances in medicine.

Until recently, AIDS was an instant death sentence. Protease inhibitors and so-called "drug cocktails" now allow AIDS patients to enjoy productive lives. New drugs help eight out of 10 children beat leukemia. Pills now chase away baldness and depression.

While this is cause for celebration, Washington is itching for regulation. Naturally, these medical breakthroughs come at a price. Some politicians think they just cost too much.

President Clinton wants to spend over $30 billion to add a new prescription-drug benefit to Medicare. Rep. Tom Allen of Maine, Rep. Henry Waxman of California and 98 of their fellow Democrats would go even further. This Gang of 100 has cosponsored the Prescription Drug Fairness for Seniors Act. It would place federal price controls on more than 40 percent of the prescription market and compel drug companies to sell to pharmacies at the lowest price Washington spends on medicines. By law, the Veterans Administration and other federal agencies buy medications at 24 percent below the HMO-hospital cost. Oddly enough, there is no mandate that druggists pass these savings to seniors.

This cockeyed idea is like curing a headache with a guillotine. While many new drugs are costly, their prices reflect the $24 billion that the U.S. pharmaceutical industry spent on research and development last year alone. A new medicine typically requires $500 million and 12 to 15 years to reach the corner pharmacy. Drug companies need to recoup these costs, as well as their investments in "blind-alley" drugs that go nowhere after years of costly inquiry. Federally fixed drug prices or other limits on pharmaceutical profits will exacerbate these economic realities and reduce incentives for pharmacologists to seek solutions in their laboratories.

It also is important to focus on the price of not taking these new drugs. Consider, for instance, the 1977 launch of antiulcer drugs such as Tagamet and Zantac. According to the Pharmaceutical Manufacturers Association, 97,000 ulcer surgeries were performed annually before such drug treatments existed. That number fell to 18,926 by 1987, an 80 percent decrease. An ulcer surgery cost about $28,000. Today, antibiotics are combined with these drugs to fight H pyloria, an ulcer-causing bacterium, for just $140. …

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