Medicine

Capitalism Spurs Medical Innovation

Efforts to remove the 'profit motive' from medicine is a self-interested move by professional meddlers.

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For years, my scientist brother Tom was the nonpolitical Stossel. 

I defended free markets on TV, and he studied blood at Harvard and Brigham and Women's Hospital. Mom asked me when I'd get a "real job" like his. 

Then the crusade against capitalism reached his world. 

Medical "journalists" demanded that corporations distance themselves from medical research. They'll bias the results, "put profits before people," and sell dangerous goods. 

Tom didn't notice this "conflict of interest crusade" until he joined the scientific advisory board of a biotech company and learned how difficult it is to bring medical innovation to market. Now he's furious about what he calls "pharma-phobia."

He says criticism of medical-industry cooperation "is a mixture of moralistic bullying, opinion unsupported by empirical evidence, speculation, simplistic and distorted interpretations…" 

You get the idea. At dinner, we tell him, "You're probably right, but shut up now."

But he shouldn't shut up. Trying to take money out of medicine will deprive us of the very innovation we want. Drug companies are the ones with the resources to create cures. It's insane to limit their access to medical research. 

Tom just wrote a book about this titled Pharmaphobia: How the Conflict of Interest Myth Undermines American Medical Innovation.

One way that the anti-capitalists want to purify medicine is by urging people not to trust scientists who consult for industry and to ban them from government advisory panels and scientific studies. But it's usually the smartest researchers who are hired by industry. Banning them means banning the most qualified scientists. 

While activists denounce industry for "exploiting" sick people, industry keeps helping us live healthier lives. 

"Over the nearly 50 years I've been a physician, health care has improved," writes Tom. "Our lifespan has increased by 10 years, we're half as likely to die of a heart attack or stroke, and suffer a lot less from arthritis as we age." If that's what happens when capitalists get involved in medicine, I say: Let's have more of it! 

The activists take new treatments for granted but resent paying for them and resent the profit motive that brought them about. So do many patients.

Tom's brother-in-law Patrick was dying of cancer until he was given a new drug that's kept him alive for 15 years. Patrick was grateful but angry that the drug costs so much: $123,000 per year (his insurance company pays the bill).

That cost—$123,000—seems outrageous, especially because activists claim government funds all-important scientific research. But that's a lie. Eighty-seven percent of new drugs are discovered by private industry; only 13 percent come from public-sector research. 

Then there's the average 16 years of required government testing before it will allow you to sell anything. Only vilified industry has the patience and self-interest to wade through that process, knowing they may lose money because 9 out of 10 promising new drugs will never be approved.

You start to suspect that the activists aren't really concerned about what's best for patients. Some are purists, argues Tom, who just want profit removed from life. But many have self-serving agendas: Insurers benefit from drug price controls, and a demonized industry is easier prey for prosecutors and tort lawyers.

New rules imposed on universities and hospitals forbid doctors to educate other doctors about new drugs, or learn FDA-approved drug information from company representatives.

Even tiny gifts from companies, like a pen with a corporate logo, are regarded as potentially corrupting. Part of Obamacare called the "Sunshine Law" demands that companies report to the U.S. Department of Health any payment of as little as $10 to a doctor. 

This is useless. Few doctors are corrupted by a box of donuts, and no one reads thousands of pages of disclosure forms. Much worse is that it diverts billions of dollars from drug research to bureaucrats working pointlessly in companies' new "compliance" departments. 

In a free market, medical practitioners and medical companies earn more money if they make their patients and customers happy and keep them healthy. That's the best incentive. I trust that competition more than I'll ever trust the activists who want to shut it down. 

© Copyright 2015 by Creators Syndicate Inc.

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  1. Some are purists, argues Tom, who just want profit removed from life.

    Al Gore is a prophet that profits from purists.

    1. This really galls me, the way people demonize money and profits, espeically because I consider money and prices as possibly the greates invention ever, since they literally let you compare apples and oranges.

      But back to profits. Everyone expects to be paid for their work. Progressives constantly push minimum wage laws as if being paid above your productivity is a human right mightier than free speech. Yet they expect companies to work for free.

      If someone incorporates and hires themselves out for a fee, do they suddenly lose that human right of being paid? It’s so damned ridiculous, to say that you can only be paid if you are a person, never if you have a business plan.

      1. I think a lot of it comes from confusing profits and income. Profits aren’t necessarily income. They can be turned into capital to invest in and grow the business. Then again we’re talking about people who don’t understand the difference between money and wealth. It’s as if it’s fashionable to be an economic ignoramus.

        1. I was reading an article on CNN yesterday about Walmart’s profits taking a small hit from raising employee wages. No lie, some people in the comments were bitching about the Walton family still having a giant pile of money to sit on.

          1. Well, yeah. If someone is worth X amount of dollars, then they’re hoarding X amount of dollars in their basement. That’s evil because that money could be used to feed starving children. Duh.

        2. It’s as if it’s fashionable to be an economic ignoramus.

          95% of Americans are economic ignoramuses. It has always been such. And good luck fixing it. To teach people economics would undermine a certain party’s policy.

  2. Look. Health care is a basic right of humanity. Not only is it immoral to profit from it, it’s immoral to be forced to pay for it. Sheesh. Everyone knows this. Single Payer Now!

    1. Single Payer? I think you missed the point of your own statement. Doctors should be keeping people healthy because it’s the right thing to do. If you didn’t want to heal people then you shouldn’t have become a doctor.

      1. Um, no. Single Payer is the government. That means everyone pays and no one pays at the same time. It’s magic.

        1. But as a basic human right, even the government should not be forced to pay. Any doctor who asks for compensation for services rendered should be shot.

          1. And, obviously, any doctor who doesn’t ask for compensation will starve. It’s a real dilemma.

  3. Big Pharma is one of the Biggest donors to “Drug Free America”. They have earned their reputation the usual way. Dishonestly.

    1. Small Pharma, and Big Government.

  4. Government funds science, and the scienticians turn around and say we need more government. And people think this is somehow more pure and virtuous than privately funded science.

  5. “[…]Part of Obamacare called the “Sunshine Law” demands that companies report to the U.S. Department of Health any payment of as little as $10 to a doctor.[…]”

    I’m going out on a limb and guessing THIS part of O-care didn’t get the Friday-afternoon-royal-decree treatment.

  6. If cannabis was regulated like tomatoes some cancer cures would cost under $50.

    1. But tomatoes are massively overregulated.

  7. “I’m an excellent President.”

    “This is not just a problem for countries on the coast or for certain regions of the world. Climate change will impact every country on the planet. No nation is immune,” the president said in prepared remarks. “So I am here today to say that climate change constitutes a serious threat to global security, an immediate risk to our national security, and, make no mistake, it will impact how our military defends our country. And so we need to act-and we need to act now.”

    The president will deliver the message at the Coast Guard Academy in New London, Conn.

    The president in recent months has pressed for action on global warming as a matter of health, as a matter of environmental protection and as a matter of international obligation.

    He’s even couched it as a family matter, linking it to the worry he felt when one his daughters had an asthma attack as a preschooler.

    When everything is “important” nothing is important.
    What a buffoon.

  8. Obama’s appearance at the Coast Guard Academy was to be his second and last commencement address of the season after speaking earlier this month at a community college in South Dakota. The president traditionally delivers a commencement address every year to one of the service academies.

    Later Wednesday, he was visiting Stamford, Conn., for a Democratic fundraiser at a private home, with about 30 supporters contributing up to $33,400 each.

    He has bills to pay, right?
    RIGHT?

    1. Stosselytize!

  9. I like Stossel. He doesn’t jump on Twitter to express his outrage that anyone would dare criticize him like certain writers.

  10. Americans all want to have lots of money. Yet next to none want to know what money is, or can state a plausible theory of value. Moreover there isn’t a high school in America that teaches Austrian economics, and very few colleges either. Weird .

  11. Imagine this scenario: A doctor invents a new drug that will have unprecedented success in treating, say diabetes. He gets his patent and starts a company to continue navigating clinical trials. The major pharma companies are sizing it up to buy the company and its one asset, the patent. The company that is currently producing the largest selling diabetes drug may be in a position to outbid its competitors since it already has a marketing infrastructure to sell diabetes drugs and a pipeline to the doctors who will prescribe it.

    This major pharma player buys the doctor’s company. Now what does it do? Since it has a few years remaining on its current diabetes drug patent, it sits on the new drug. When the old patent nears expiration, it does all it can to extend the patent by changing dosages, playing with the inert ingredients, etc. Corporate management , perhaps even fearing a shareholder lawsuit, are solely concerned with maximizing profits.

    Many people needlessly go blind, limbs are amputated.

    1. Now what does it do? Since it only has a few years remaining on its current diabetes drug patent, it tries to get the new drug out as fast as pissible, before other companies can bring THEIR new drugs to market and cut them off or reduce their market share.

      Corporate management, perhaps even fearing a shareholder lawsuit, are solely concerned with maximizing profits, and sitting on a new drug while trying to maintain a dead patent is not the way to do it.

      1. Apparently you don’t understand that the goal of pharmaceutical companies is not to maximize profits. Their goal is to maximize evil. Progressives understand this.

      2. I disagree that a free market gets the best products, in this case pharmaceuticals, to market fastest. There are many scenarios where profit motive would delay release of innovative drugs.
        Major drug companies spend many, many times more on advertising than on R&D. New drugs come predominately from acquisitions by the big players.
        What we end up with is an industry much like technology where the better VCR design, the better operating system, the better internet browser, et. al. are bought up and buried by the owner of the current best seller. I can live with this in most areas as an unfortunate consequence of the market, but health care seems different to me.

    2. Apparently Sherman isn’t hanging around with Mr. Peabody these days.

  12. If you’re really paranoid, you could read all of this as a way to reduce the size of the entitlements disaster that will really mushroom if we all start living to 150.

    1. This has been anticipated by the Social Security Administration. The retirement age is scheduled to increase each year until 2070, when it will be 137.

  13. Yes, I’m a troll – but let’s take this article apart to see clearly where it’s the most nonsensical piece of victimhood-purveyance.

    Will anyone here deny that every innovation ever invented was invented with a capitalist motive? So to suggest that something is unique in that it’s “spurred by Capitalism” is idiotic in itself. It’s true what many innovations are publicly funded but two things about that. 1) They start with a profit motive to someone – licensing, for example. 2) The cost of dead-end research is oftentimes too great for a for-profit company to bear even though finding solutions is essential. This could be in the medical area, space, energy, etc. Even if the entire cost is borne by public funding, there is profit to be earned AND there is a greater public good. (Someone out there must use a public road to get to work or transport goods, right?)

    What is the definition of public good? How about fewer lost work hours by your employees due to illness? Greater productivity, to name two.

    For Stossel to suggest that “spurred by Capitalism” is unique is ignorant. For you to be all atwitter about stuff that happens every single day is even more so.

    YOU KNOW BETTER!

  14. So, basically your’s an idiot, eh dave.

  15. Full disclosure, I spent about 25 years in the Pharmaceutical/Biotech sector. The anti-capitalist ranting is even more insane. I grew up in the 60’s, which was cool, because we had the best TV shows ever! Remember the Fugitive on TV? The one-armed man. Then they made it into a movie, and the one-armed man worked for an evil pharmaceutical company! WTF? Seriously, WTF. The average new drug submission to the FDA takes between 10-15 years, requires a tractor-trailer full of paperwork ( no hype, it seriously is that much paper) with another year spent deciding what you can say in your ads for the product. Oh, and 90% don’t make it through the process, and the price tag is between $800 million and a billion dollars. The reason marketing budgets are bigger than R& D is the sheer volume of effort, sales force size, and media buys required to inform people about the product. I had a heated discussion once with an academic who was moaning because in 1960, drugs were about 5% of health care expenditures, and today it was 15%, heading to 20%. That proved Pharma companies were evil and profit-sucking ghouls. I said, in 1960, if you had a bleeding ulcer, a surgeon cut you open, today you take a pill. In the future, if we had a cure for everything, Pharma would be 100% of healthcare, and wouldn’t that be a good thing, not a bad thing? Grumble, grumble, all of you, off my lawn now!

    1. Yeah, soon a pill will be developed to fix a shattered femur. Obviously orthopaedic surgeons are threatened by Big Rx and clearly sawing drilling stapling screwing bones is reactionary regression when we know that soon, a pill will fix that shattered femur as easily as any surgical procedure.

      And what about the pills that will replace a good steak asparagus potato dinner? Soon we’ll just take pills for everything.

      I saw it in a 1960s sci-fi show so it must be what wlll happen if only we can keep having “progress” in “medicine.”

  16. Good thing Heroic Expert Stossel is protecting “medical progress,” since we’ve got so much “progress” in “medicine” that is under threat. If we can’t require an MRI for every hangnail and toothache, we’re hampering “medical progress.”

    What a clown.

  17. Enjoyed the article, finally some Republicrasses with evidence of wit. Question: If not Hillary, than who, and why?

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