Saying No to Cheap Drugs
Saturday, July 3, 2004; Page A25
Robert E. Wittes contends [op-ed, June 15] that the prices for the newest cancer drugs are unjustified and should lead to calls for Congress to impose price controls.
Our nation more rapidly produces more new drugs that allow people to live longer and more productive lives than any other country because it is largely free of price controls, while other countries are not. The U.S. pharmaceutical and biotechnology industry has generated more cancer drugs than its European, Canadian and Japanese counterparts combined. About 75 percent of all new drugs are discovered and used in the United States first. A greater percentage of the cancer products in the pipeline are U.S. discoveries. And it will be that way for years to come if we don't impose price controls. U.S. biotech firms spent $17 billion on research and development in 2003, greatly exceeding what all other biotech firms spent worldwide. And pharmaceutical firms have invested $25 billion in biotech firms on top of the tens of billions they spend on their own products each year.
In addition, private companies have invested billions in partnerships with academic and government researchers. Wittes developed a cancer clinical trial network with the cooperation and financial support of many companies to improve drug development and advance patient care. Some activists and members of Congress are using this as a back door for price controls. They propose to yank the patent of any drug that was tested by or developed with government labs if the medication is priced too high for their taste. But, the patents for valuable cancer drugs tested in the network Wittes established could be threatened if Congress or activists protested their prices. Wittes should be aware of the government's failed fling with price controls. In 1992, the National Institutes of Health (NIH), under pressure from the Clinton administration and Congress, required any company or university engaged in a development project using federal research money to have the potential product's price set by government under a so-called reasonable pricing clause. The number of joint ventures plummeted in 1992 from 91 to a low of 31 in 1994.
In abolishing the controls, then-NIH Director Harold Varmus, who is now president of Memorial Sloan-Kettering Cancer Center, said that price controls had "driven industry away from potentially beneficial scientific collaborations with public health service scientists without providing an offsetting benefit to the public." When the price controls were removed, partnership deals increased to 87 in 1996 and to 153 in 1997.
Cancer drugs should prove their cost-effectiveness, and we should reduce the time and cost of developing new medicines to keep prices down. Emotional appeals for price controls stir up the biomedical lynch mob in Congress and elsewhere. Innovation and patients will get hurt in the process.
-- Robert Goldberg
The writer is director of the Center for Medical Progress at the Manhattan Institute for Policy Research in New York City.
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