These Politics are Enough to Make Drug Companies Sick

The Food and Drug Administration has just approved a drug to combat non-Hodgkin’s lymphoma. That’s good news for cancer patients. But you wouldn’t know it, given the vicious political campaign being directed against the pharmaceutical industry.

Congressmen are pushing to cut prices and trim patent rights. Passage of a Medicare pharmaceutical plan will encourage Uncle Sam to regulate drug access and prices.

State legislators are debating their own Draconian price-control schemes. The media, such as the Public Broadcasting Service television show “Frontline,” has targeted the drug makers. Trial attorneys, left-wing activists, and state attorneys general are filing lawsuits charging pharmaceutical companies with everything from racketeering to fraud.

Unfortunately, political demagoguery is having an impact. A recent Harris Poll shows that those who believe the drug makers are doing a good job of serving consumers fell from 79 percent to 57 percent from 1997 to 2001.

Yet Columbia University’s Frank Lichtenberg figures that 40 percent of the increase in average life span between 1986 and 2000 is due to new drugs.

Says Dr. E.M. Kolassa of the University of Mississippi School of Pharmacy: “Today, physicians have at their disposal medications and technologies that provide for the immediate diagnosis and treatment of most of the disorders that affect modern man.”

Hundreds of new drugs are in development for cancer, heart disease, strokes, Alzheimer’s disease, infectious diseases and AIDS. Two decades ago, there was no treatment for AIDS. By 1987, there was one drug, AZT. Now there are 74 anti-AIDS drugs available and there are 100 more in development.

Similarly, pharmaceuticals offer the best hope of combating any future outbreak of the deadly SARS virus. Gurinder Shahi, a doctor in Singapore, observes: “Given how little we know about SARS and the reality that it is killing people, it is justified for us to be daring and innovative in coming up with solutions.”

Daring innovation is most likely in a competitive, profit-driven market. Today’s medicines exist only because there is a bevy of sophisticated pharmaceutical companies devoted to finding drugs to heal the sick.

Isn’t this serving consumers well?

But prices are too high, claim myopic, vote-seeking politicians like Sen. Jim Jeffords, I-Vt. Heck, they only save lives. Extend our life spans. Moderate our pain. Control our nausea. Eliminate our need for surgery. Treat our allergies.

Why should we have to pay for such products? The outrage!

Drugs should be free. Or at least a lot cheaper.

It would be nice if they were, of course, but people who believe prices can be lowered legislatively are living in the world as it ought to be. Everyone ought to be rich and beautiful.

Everyone ought to be paid a million dollars a year for working 10 hours a week. Everyone ought to have a Mercedes at a Yugo price. And everyone ought to have all of the pharmaceuticals now available for less money.

Unfortunately, medicines do not appear outside company doors every morning like manna from heaven. Of every 5,000 to 10,000 substances checked, only one survives testing and gets past the FDA and reaches the market.

Thus, the real cost of pharmaceuticals is not making the pill that patients swallow. It is the research that went into developing the pill – as well as the other 9,999 substances that failed.

The pill’s price also has to cover the cost of complying with burdensome FDA requirements. The Tufts Center for the Study of Drug Development estimates that companies spend nearly $900 million to develop each drug.

Nevertheless, some politicians would control prices. But government can only confiscate the drugmakers’ existing inventory. It can’t force them to keep making drugs to be confiscated in the future.

Adopting Canadian- or European-style controls would result in Canadian- or European-style patient access. Their ill citizens often wait years even for life-saving medicines.

Still, activists and politicians are pushing other alleged panaceas. Re-importation from Canada is supported even by some conservatives.

Yet prices are lower there because the government controls prices and the country is not full of profit-minded tort attorneys. Charging Canadian (or Mexican, or Afghan) prices in the United States means the drugs would not be developed in the first place.

Increased use of generics is another idea. Generics are an important component of the existing market, but generics companies provide very little independent research and development to create new products, the lifeblood of medical progress.

Politicians also are pushing a range of use restrictions – formularies, reference pricing, and more. Yet every attempt to stop people from using new medicines endangers their health and threatens to increase health-care expenses elsewhere.

Everyone in America has a stake in lowering medical costs.

But they also have a stake in maintaining quality health care. If the pharmaceutical industry succumbs to the demagogic campaign against it, we will all suffer the painful consequences.