« Taxing Wealth | Main | Good Readin' »
October 19, 2005
Treating Big Pharma
Brad Plumer's got a good post on socializing drug research that you should all read. Folks following my Tapped contributions (I really need to remember to write those end of the day Tapped round ups/open threads that you all keep bugging me for) know I've been on an anti-Big Pharma kick and, judging from Brad's piece, I've been reading all the same materials he has. And since Brad's a very smart guy, I'm glad we've come to the same conclusion: there's no reason we need to fully nationalize the pharmaceutical industry, but some heavy-handed regulations and a larger mandate for public research couldn't hurt anything.
It's also worth saying that we should shred the Bayh-Dole Act: taxpayer-funded NIH and academic research should not be cheaply signed over to pharmaceutical companies so they can charge obscene prices for the products. You want to go after double taxation, go after the fact that Americans use their tax dollars to pay for the R&D and their savings to pay wildly inflated prices for the result. Make it open source instead, and channel the funding so there's more of it -- the government is damn good at drug research, and they, unlike Big Pharma, actually do throw the money at research.
Funnily enough, the folks advocating for partial socialization and heavy regulation of Big Pharma are actually on the side of increased competition here, it's really the current patent system and the clever exploitation loopholes in the Hatch-Waxman act that's allowed for a thousand little monopolists to bloom. And while I'm not saying we need to mow down the whole batch, opening up the industry and tamping down on its more grossly greedy practices would be good for medicine and good for health costs. My feeling, though, is now that the government is paying for drugs through Medicare, you're going to see some movement on this front in the fairly near, post-Republican future. It's just too rich a source of savings to ignore.
October 19, 2005 in Health Care | Permalink
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c572d53ef00d83491d92669e2
Listed below are links to weblogs that reference Treating Big Pharma:
Comments
Also, it is important to remember that researchers will research no matter what. It is not necessary for Big Pharma to make billions of dollars in profit for new drugs to be developed. The fact that there are billions of dollars of profit shows that money is already not being funneled to research, but rather to shareholders, directors and top executives. These people do no research, develop no drugs, provide nothing, really, to the process except the shuffling of paper.
It is my understanding that there are no laws forcing Big Pharma to sell drugs in countries that do not have the same patent and price protections as the USA. But they still do sell those drugs in those countries. Apparently there is profit, perhaps not obscene, but profit nonetheless in those situations.
My point, in case it is not clear, is that there is no argument against tighter regulation and increased socialization of the drug development and distribution processes. This industry does not need the protections it has to survive or even thrive; it certainly does not need welfare in the form of taxpayer-funded research. I find it interesting that people will argue for the necessity of excessive profiteering, saying that without all this money we will lose our developmental edge and that life-saving medicines will never come to fruition. But researchers are not millionaires, and apparently some of the best research is done with public, and therefore less lavish, monies.
I find little difference between Big Pharma executives and the proprietors of crackhouses. When one is selling a product that people absolutely must have while operating outside the law, one can charge whatever one likes. People will pay it, even if it means personal or even national bankruptcy.
Posted by: Stephen | Oct 19, 2005 10:45:16 AM
Yes, yes, yes. I made some comments at Brad's blog about reforms worth considering for the government research-drug company connection.
Why does Congress keep giving huge give-aways at the drug industry? For the same reason they give huge give-aways to the oil industry. These companies pay the election/re-election campaign bills for a large portion of the Congress, and get it back many times over. The best investment they can make, and the best government they can buy.
The facts do not sustain the oft-repeated argument that innovation would stop if patent-protection and other government props were removed.
The new Medicare 'user manual' (Medicare and You) for 2006 is now out. The one that was protested by Congress earlier this year as being anti-government programs and pro-health insurers.
Liberals and progressives should look this over and think about what this mess means to those in their 60's through 90's. It is a incomprehensible mess that we have created with Repub. insistance on relying heavily on the private health insurance market - including the new drug program. [Note that the version linked does NOT contain the information on insurance programs available to medicare recipients in their local area - page after page of tables of comparisons from which the member must choose a particular insurer after determining which major direction they will go (medicare part A/B, 'advantage plans', etc.)].
Posted by: JimPortandOR | Oct 19, 2005 11:07:46 AM
It's also worth saying that we should shred the Bayh-Dole Act:
I agree but for different reasons. Conditions before the Bayh-Dole act were such that the lack of incentive to file patents based on university research meant that universities filed very few patents compared to private research labs such as IBM and Bell Labs. It turns out that the lack of patent filings was, we say in computer science, "a feature, not a bug." The rush for universities to create patents has meant that there is less collaboration and less incentive to do more research in areas that have already been patented, because someone else owns the rights to it. This is particularly acute in the biological sciences where patent-holders are much more likely to guard their patents very closely rather than cross-license their patents with other researchers.
In theory, Ezra, I part ways with you-- there's nothing wrong with the "double taxation" of research for private gain. In theory, much research might never enter the private market without high financial incentives to commercialize it. It strikes me as a good think to allow universities to realize a new revenue stream by licensing patents developed by their own researchers allows them to fund more of their own research, reward productive professors, and commercialize research that might not otherwise have been commercialized. As I said, in theory it sounds great, but the patent system itself causes a decline of collaboration among researchers across insitutions, and that isn't good for anyone.
However, more public funding of clinical drug research is a great idea. Many of these drugs address "public health" issues, and there's no reason why their development shouldn't fall under the public sector. If a private drug company wants to develop and patent a slightly better, but much more expensive drug, then they should go for it, but the US shouldn't worry about not having access to drugs that address the country's basic public health needs.
Posted by: Constantine | Oct 19, 2005 11:23:35 AM
Check out recent posts on the other Brad--DeLong's--website on this issue. I follow the psychotropic drug market closely because I'm in the field, and there hasn't been a truly new innovation since Prozac. Instead, there has been an enormous amount of very profitable copycatting--minor tweaks on already-existing drugs. I don't follow the other drug categories as closely, but my impression is that the same thing is happening. This doesn't speak well for our current system: we're paying through the nose to get old wine in new bottles.
Posted by: Rebecca Allen, RN, PhD | Oct 19, 2005 1:31:15 PM
The general problem of how to use markets to deal with ideas is an interesting one, that is tough figure out. This interview with Paul Romer presents a good overview of some of the problems with this.
I certainly think we can improve things. How to deal with publically funded research, how to deal with patents, all of that stuff should be 'on the table.' I would be very concerned with a huge radical change to the system though, cautious expiramentation seems wiser than a massive change to me.
Posted by: Dave Justus | Oct 19, 2005 1:53:43 PM
Heavily relying on for-profit drug research, while co-opting or corrupting public and university research, is a terrible idea.
We need research on the comparative effectiveness of non-proprietary compounds -- aspirin vs. bechstra, etc.
We need basic research, on metabolism and genetics, etc.
Drug companies will concentrate their research on developing "addictive" drugs, and drugs with the same economic profile as addictive drugs -- chronic need and intense demand.
Ulcers are classic: the drug companies poured tons of money into antacids to treat ulcers as a chronic condition. Meanwhile, public research discovered that ulcers can be cured with antibiotics.
Drug companies would never, ever discover the cause of ulcers was a curable thing, because they don't want such a result.
Posted by: Bruce Wilder | Oct 19, 2005 2:19:26 PM
Not much on my mind right now. Today was a complete loss. So it goes. I've just been sitting around waiting for something to happen. I've basically been doing nothing , but I guess it doesn't bother me.
Posted by: adsense | Sep 1, 2007 8:14:25 PM
The comments to this entry are closed.
