Tuesday, August 17, 2010

Hoisting the "Profiteering" Flag: Not Getting the Point

Slate has an "informative" article about how a drug can end up costing $8,000, and attempts to shock the conscience of the reader with the nefarious truth: profit!

Well, no crap.

Here's a terrible, "life's not fair" truth for ya: every good thing you've ever bought, in your entire life, was designed, tested, manufactured, and sold to you with profit as a major, if not overriding, concern.  It's how the world works - more importantly, it's how America works, and it is the reason we bring so much more to the world than any other country.

Most Americans are actually pretty OK with that concept.  Nobody suggests your HDTV was invented out of an altruistic desire to convey more realistic images to the people.  I certainly don't remember anyone ever telling me the dishwasher was invented without thinking about how much money the inventor was going to make on it.  Hell, Thomas Edison is a national hero, and he was a voracious, unrepentant captialist.

But things get a little fuzzy when we start talking about medicine.  When we think of inventing medicine, we get images of Madame Curie hard at selfless work, literally killing herself that others may live.  Somewhere in the American consciousness there's this notion lurking that all new medicines are discovered by individual scientists squirreled away in a lab of their own somewhere, who (presumably) subsist on the food brought to them by similarly-altruistic birds and whose lab is always stocked, like Philemon's wine pitcher.

When we come to our senses, though, we are forced to acknowledge that the amount of money ($1.75 billion on average for a cancer drug like Avastin,) required to develop new drugs means you need the economies of scale of a large corporation to even contemplate the endeavor.  I'm not suggesting pharmaceutical companies are barely scraping by - they have some of the highest profit margins of any industry -  but the Slate article is all but arguing for price controls, which would be disastrous.  With Obamacare, drugs have a 12-year exclusivity span.  That means arch-villain Avastin the PoorSlayer will be in the $15 generics aisle in 2016.

Let's play my favorite game, the incentives game!  If the company that developed Avastin knew the government would set the price of their drug (or let's not forget, disapprove it entirely if you priced it too high,) how much money do you think would go into developing things like it?  Less than now?  Would you call that a safe assumption?  How about, less enough that no version of it, affordable or otherwise, come to exist by 2016?

There are some (pretty big) loopholes that can be closed in the pharmaceutical patent world - before Obamacare, for example, Avastin's patent would have never expired, since it was a biologic, not a "drug."  But Avastin's profit isn't one of them.  It's exactly the best possible thing to happen to the medical research - we want millions of dollars of rich people's money flowing into medical research.  It's like a tax they impose on themselves.  It would be like if the uber-rich payed $1 million a ticket to see a screening of the latest summer blockbuster four months before release - paying in its entirety the production cost of the film, and allowing you to see it for $2.  No, you're not going to literally die if you don't see Breaking Dawn in time, but let's make the big-boy decision here: are you willing to risk never getting life-saving medications just to make sure the ones we have right now are available to everyone sooner?  That sure sounds a lot like that "robbing our children" thing all those Democrats tell me I'm slandering them if I invoke.

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