Too Much Government
The virus scare has created a feverish burst of activity in the biotech sector of our economy. Numerous organizations are working day and night to come up with treatments to alleviate the symptoms of and/or vaccines to prevent the spread of COVID-19. This is a story of American capitalism at its best.
The biotech sector has been, for the last 20 years, a bad place to invest. Lots of investment capital has gone in and only a few real medical advances have emerged. It appears that the situation is about to change. There have recently been some genuine breakthroughs and there are more on the horizon. We should be very wary of government action that inhibits this progress.
The entire political spectrum wants to inhibit progress. The left wants Medicare for All, meaning price controls for the whole health care industry. Even Republicans are talking about “lowering drug prices”, a euphemism for price controls. It costs somewhere between one and two billion dollars to get a new drug approved by the FDA. Who is going to put up that kind of money if return on investment is subject to government fiat? There must be a better idea.
Those who develop a new drug should be allowed to charge whatever they want to charge. Doctors and patients can decide whether the cure is worth the cost. If voters choose to do so, we can tax ourselves to subsidize those who cannot afford the cure. In that fashion, we maximize the motivation of investors to invest in the process of medical innovation.
On the other hand, we should strictly enforce patent laws. Lots of drug organizations have found creative ways to extend the life of patents. That has to stop. If we did this correctly, the aim of the left — income redistribution — would work to everyone’s advantage. The rich will pay for expensive cures during the period of patent protection (verifying the efficacy of a new drug in the process) and everybody else will be able to access the drug at a generic price a few years later.
Finally, we could dramatically lower the cost of drug development by changing the mission of the FDA approval process. Untold millions are spent attempting to establish the efficacy of new drugs. That decision can be left to doctors and their patients. Some drugs have very different effects on different people. Drug developers should be obligated to publish their research for all to see (and be legally liable if they fake anything). The FDA should confine itself to testing for severely deleterious/deadly side effects. If patients are willing to put up with less serious side effects, and/or unproven efficacy, that should be their business.
The biotech revolution is currently in its infancy. We may be able to develop cures that will extend life, enhance its healthy enjoyment, and substitute a pill or shot for lots of currently expensive medical procedures. Let’s not kill the infant revolution in its crib.
