Lieberman Favors Medical Progress

Democratic presidential hopeful, Senator Joseph Lieberman has unveiled his stunning new plan to lower medical costs--medical progress. Medical progress will lower costs, but unfortunately, Lieberman wants to muck the process up by creating a new $150 billion government boondoggle called the American Center for Cures. We already have a center for cures, it's called the private biopharmaceutical industry. If Lieberman really wants to speed up medical progress he should oppose any legislation creating a Medicare drug benefit plan or attempting to undermine drug patents.

Comments

[Steve Skutnik]

...but where's the fun in leaving solutions to the free market? Solutions that don't entail billions of dollars in wasted federal spending just aren't "sexy" with the voters, didn't you know that?

[geophile]

I admit that I haven't read the link, but Lieberman's medical coverage views seem to be the least offensive among the nine overly optimistic candidates. The problem is, he doesn't have a chance. I can't bear to listen to his voice for 4 minutes let alone 4 years.

[david f]

... howard dean? what of his plan?

not to worry. dubyah is probably gonna win, paving the way for prez clinton the second. for the worst every-other prez combo ever. (only one, too)

🙂

[Kevin Carson]

The treatment of drug patents as part of the "free market," or of a drug industry that gets half its R&D funds from the gummint tit, is positively Orwellian. Some of the biggest cash cow drugs were developed ENTIRELY with taxpayers' stolen money, and then the patents given away free so Big Pharma could charge a monopoly price fifty times production cost. Some free market!

If Big Pharma is entitled to this treatment, then big city cab companies should be entitled to anti-jitney laws, and all sorts of other monopolies and licenses should be enforced against the market, ad nauseam.

Reminds me of the host of a radio financial advice show today, who solemnly opined that going to Canada to buy cheap drugs was undermining our "free market" society.

God forbid we should violate the "free market" by seeking to evade a state-enforced monopoly price. Next in line for public execution should be those enemies of the free market who evade tariffs by smuggling goods across borders. Who knows, maybe you'd better not resist a mugger when he tries to take your wallet--"Hey, man, you just don't understand the free market!"

And BTW, Ron, how about when Congress interferes with patents the OTHER way--by extending them?

Here's my free market prescription: 1) end state R&D subsidies to big pharma; 2) stop enforcing anti-market patent monopolies; 3) end all government restrictions on labelling that limit information available to consumers; 4) end the FDA nazis' power to suppress medical techniques disapproved by the white coat priesthood; and 5) end the medical licensing boards' ability to enforce medical orthodoxy.

Please don't hurt those enterprising monopolists from getting rich off the public teat! As Cool Hand Luke said, "Them pore ole bosses need all the help they can get!"

[Lefty]

Amen!

[Rick Barton]

The Lieberman plan has the potencial to cause needless suffering as the work this proposed government agency does on drugs would likley exert a "crowding out" effect on the development of similar drugs in the biopharmaceutical industry.

[joe]

Kevin,

You don't think the government should enforce drug patents? Do I have that right?

Why would a company spend $hundred millions to develop a drug, if some other company could copy it and sell their own?

[Kevin Carson]

Joe,

A great deal of the cost of developing drugs is unnecessary, because of the testing regime imposed by the FDA public health nazis. I'd prefer they just adopted whatever testing program they considered necessary for purposes of insurance and tort liability. And about half of this money spent by the drug companies comes out of the taxpayers' pockets.

And on a more detailed level, does anyone know of a study comparing the total producer surplus resulting from holding a patent on a drug, to the cost of developing it?

There was a study presented a few years back to the FTC showing that the vast majority of innovations would have been developed even without patents, just for the sake of competitiveness and productivity. Drugs were the one exception; but even there, about half would have still been developed without patents (and that assumes the existing costly FDA regime).
Hearings on Global and Innovation-Based Competition. FTC, 29 November 1995, at http://www.ftc.gov/opp/gc112195.pdf

Morally, I take the same view of this "wouldn't have been developed without patents" argument as I do all other so-called "public goods." If people are not willing to do something with their own money, voluntarily, without the interposition of the state, then it shouldn't get done.

[fredH]

At least Lieberman is for medical progress in principle, unlike Bush who is catering to the mouth breathers by restricting stem cell research.

[s.m. koppelman]

So let me get this straight:

• Ronald Bailey is against all government except for the parts of it that would be needed to issue and enforce medical patents.
• Jesse Walker is against all government except for the parts of it that would prevent users of the radio spectrum from drowning out signals from good independent radio stations.

This libertarianism thing sure is complicated.

[Jim]

I keep hearing the argument that patents are necessary to pay for the costs of R&D for new drugs, however someone did a study (sorry I can't remember the source) that determined the reason drug R&D costs so much money is because pharma researchers get paid more than others because the patents they develop are worth so much money. Circular reasoning, I think.

Also, the drug prices are cheaper in Canada and Europe but they are forced to be lower by the governments there. So, because we have a somewhat closer to free market system in the US, and a huge market to boot, all the new drugs are developed here and paid for here because of the patents and the rest of the world freeloads off of this by using price controls that don't really hurt them because the suckers in the US will pay for it all. (Of course most of the new treatments come out of Europe and Canada because they do not need to meet FDA approval and/or worry about being sued for more money than they could ever make in history).

Part of the reason socialized medicine works as well as it does in Canada and Europe (or Germany, at least, where I've seen this) is that you can get more over-the-counter prescription drugs there so people don't have to go to the doctor as often just to get medicines for problems they already know they need medicine for. I'm not stumping for socialized medicine (I think it's a bad idea) but having freerer access to drugs reduces the expense of doctor trips just to dispense pills.

I agree with all of Kevin's prescriptions, but would like to add:

1) End the medical monopoly on prescription drugs so the general public and acquire them directly without having to pay $50 for the office visit and wait for hours at the doctor's office, and
2) Use the WTO to push to eliminate price controls that force drug development costs soley onto the US market.

[Madog]

Man, how do you compete with that?

Mr. Libertarian, are you in favor of the AMERICAN CENTER FOR CURES?

No, I think some business should figure it out.

Nevermind that the business would probably do a better job, just being against something call the "AMERICAN CENTER FOR CURES" sounds bad. He's obviously learned something from the PATRIOT Act.

[david f]

hey jim,

the parenthetical, "Of course most of the new treatments come out of Europe and Canada because they do not need to meet FDA approval and/or worry about being sued for more money than they could ever make in history" is contrary to my experience working in the pharma industry.

for example, Humira, a potentially revolutionary RA drug (revolutionary in its potential efficicacy as well as in its r&d, as it's the first human monoclonial antibody to be approved in europe. while it's true that some french outfits (fournier) do come up with stuff like fibrate-class treatments, it's merely variation on the gemfibrozil line, so it's not really that impressive. the statins, ACEs, ARBs, etc. all reached market in the US first and all were successfully R&D'd in the us. BPH treatments are also being developed in the us by GSK, for example.

as for OTC type products, i guess that depends on the country, and that's about to change with eu regulations that will force harmonization. for example, in denmark, austria, sweden you can't even get a version of nyquil or whatever otc. many products are funneled through the med system. in belgium, however, they slurp down the stomach (pepto bismal types of stuff) more than danes or americans do. my german friend marveled at the otc availability at the grocery store, for example. (and we barfed over the prices, but it was evanston, IL, so what do you expect?)

when our company purchased a small german production center, the center was promptly moved to the us where research is less expensive (!), and where funding was easier to come by.

which treatments or products are you referring to in that parenthetical? GSK, novartis, and roche use CROs here in the us to conduct clinical trials (which are faster and more efficient than in-house run trials). the data are so benchmarked (KMR Group, CMR International do excellent R&D benchmarking work), so this is pretty well tracked. Teva and other non-us generic houses use US factories to produce, as well. (for example, fujisawa uses upjohn house production or novartis has abbott produce some products per contract).

and as for the socialized medicine working in canada and germany, hmmmm. i do know that in denmark, the system that the germans desire, the waiting lists are terrible. also, quality of care is superior in the us. it's no wonder that heart procedures are done at the cleveland clinic, for example. look at what university of rochester has done for hip replacement and hand surgery, for example.

thanks,
drf

[Skeptikos]

I just came from a stint in one of the largest pharmaceutical co.s on the planet. Guess what? They were capitalists, not health care workers. If there were 2 drugs in the pipeline for the same disease, both with equal potential efficacy, but the marketing branch asserted that one would make $250,000 per year and one could make potentially make $1,000,000,000, guess which one got approval for development? Now, I'm not criticizing. After all, my well being is not their concern. Their concern is to maximize the profit. Sometimes that helps me, sometimes that hurts me. But, lets be honest, if they can overcharge, rob me, hurt me, but still make a profit off of me, they will. I am not being ironic, I am not being snide, this is the nature of our system. Kill or be killed (anybody been watching the industry lately, it is the most mercenary that are surviving, not the most altruistic). Once again, I think such freedom is healthy, just remember, the goal is to maximize what we pay, not minimize it. The only one interested in your well being is you (well, maybe your mother too). This is only a bad thing when we forget this. When we remember it, the system works, when we forget it, the system fails.

[Jim N]

Kevin, I know this is a sore spot for you and I would have been very disappointed if you had let that comment pass.

[fredH]

Jim:

The M.D.'s and research pharmacists that work for drug companies might be highly compensated, but the chemists who invent the drugs certainly are not. Chemists who work in the pharmaceutical industry make about the same salaries as those in other industries, such as petroleum or plastics. I don't have a link handy, but C&E News, the weekly publication of the American Chemical Society, regularly prints surveys of chemists' salaries. Contrary to popular belief, most scientists are not well paid, especially relative to their level of education. After an average of seven years in graduate school and usually a couple or years post-doccing at peon wages, the average Ph.D. chemist is likely to land a job paying considerably less than a unionized dock worker makes. Most scientists do what they do because they love science, not to make money.If they wanted money, they'd become lawyers or stock brokers or some other form of licensed thief.

[Blum Valerie]

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DATE: 12/10/2003 10:12:21
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[Lieber Katherine]

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