Demonizing Drugmakers: The Political Assault on the Pharmaceutical Industry
Bandow, Doug, USA TODAY
FEW SECTORS of the economy have provided more benefits to consumers than the pharmaceutical industry. Drugmakers have been vilified by patients and politicians alike, however, because of what they see as unreasonably high drug costs. Yet, medicine is not the most important component of the recent rise in health care expenses. Morever, the primary reason for current increases in total drug costs is that more and more people are using newer medicines--which means that consumer benefits are rising even faster
Simplistic comparisons between drug costs in the U.S. and those in other countries have little value. Economic wealth, exchange rates, product liability roles, price controls, and other factors all contribute to the prince el drugs. More important, prices for U.S. pharmaceuticals are not excessive relative to the benefits they offer. Drugs have contributed to the sharp reduction in mortality rates from many diseases, including AIDS. Pharmaceuticals also reduce the cost of alternative treatments. Thus, restricting access to the newest and best drugs can be economically counterproductive.
However, the only way to develop new drugs is to invest heavily in research and development. The $30,000,000,000 spent annually by U.S. drugmakers dwarfs the budget of the National Institutes of Health and investments by foreign drug companies. Profits of U.S. firms tend to be high, but not uniformly so, and they create a "virtuous cycle" that encourages more research and development to create groundbreaking medicine.
Yet, industry critics propose everything from socialized medicine to price controls and limits on patents. Such measures would reduce incentives to create new medicines. It is true that some people, especially poor individuals in less-developed countries, lack sufficient access to pharmaceuticals. Private charily at home and abroad should make them more available to those who are most in need, and Washington should include a drug benefit as part of overall Medicare reform. In the meantime, states should help needy seniors through limited pharmaceutical access programs. In addition, policymakers must avoid taking steps that would, intentionally or not, wreck a world-leading industry and deny people access to life-saving medicines.
Many Americans owe their health and lives to new products that emerge on a regular basis from the pharmaceutical industry. In the coming years, genetic research is likely to dramatically expand the benefits of pharmaceutical R&D. One might fairly expect most people, especially those who are ill, to be grateful. However, demonstrators around the world are targeting the pharmaceutical industry, apparently for daring to sell the AIDS drugs that it created at high cost. The tome for the war on "Big Pharma" was set in the 2000 presidential race, when then-Vice Pres. Al Gore campaigned against drugmakers with faux populist rhetoric: "Big tobacco, big oil. the big polluters, the pharmaceutical companies, the HMOs, sometimes you have to be willing to stand up and say no, so families can have a better life." It was an astonishing comparison that equated companies that make life-saving products with those that often are accused of harming consumers. Yet, in the same speech, the Vice President acknowledged "a time of almost unimaginable medical breakthroughs"--produced by the very companies he was attacking.
Although George W. Bush won the election, his Administration largely abandoned its defense of drug patents at later meetings of the World Trade Organization. In the tall of 2001, Department of Health and Human Services Secretary Tommy Thompson implicitly threatened to override Bayer's patent for Cipro if the company did not sharply cut the drug's price during negotiations to purchase a large quantity for protection against the new threat of anthrax bioterrorism.
Legislators have been even more hostile. Rep. Bernard Sanders (1-Vt.) argues that because people can't afford necessary drugs, "many are suffering and even dying. …