I'm supposed to be on holiday. But everyone is linking to
this post by Ben Domenech which, like, totally proves that I don't know what I'm talking about regarding pharma research, so I should probably point to
this post by Derek Lowe, pharma researcher, which questions Ben Domenech's analysis. It's true that I oversimplified both pharma and academia's role: academia sometimes develops drugs, while pharma does basic research. Such is blogging. The broad point is that basic research and developing a working drug are two different activities, and neither is "real" innovation. I don't want to stop government from funding basic research, and never said I did. But producing drugs does not seem to be the government's core competence.
I agree with your overall point, but (and please excuse the nitpicking) I think this is more a question of whether or not the incentives in academia, and not government, line up with producing drugs, as opposed to doing basic research. The funding source (government vs. private investment) is a different matter.
I'm inclined to believe that the "pharma doesn't invest in research for low prevalence conditions" argument is a giant red herring.
In a single payer world that many (not all! I know!) on the left consider their ideal state, wouldn't they be arguing that spending on treatment for rare conditions fails a cost/benefit test? Pharma won't invest in it for that reason, right? If we really believe in cost cutting, isn't the likely implication that the government shouldn't either?
Oops - meant "spending on *research* for rare conditions..."
Ben Domenech's commentary does not deserve consideration.
But "everyone is linking to" it, & Megan doesn't do truthiness, so it must be important.
Fun game: Try to find a post in Megan's blog where the following quote from a researcher in Domenech's article doesn't apply.
"I don’t think anyone in the field could read what she wrote without laughing."
It helps to be clear about the premises, so I'll repeat why this is even an issue.
1. The US health care system spends a great deal of money on drugs.
2. This amount is much greater, per dose of the same medications, than in any other country.
3. The guessed reason is that the US market, in essence, subsidizes both innovation and cheap consumption for the rest of the planet. They can negotiate to pay a price just above marginal costs because we can be relied upon to pay a price that compensates the pharmaceutical companies for their enormous risks and fixed-costs.
4. We want to pay what everyone else is paying so we don't go bankrupt as a nation.
5. Therefore: We might make the private business of producing and delivering future drugs to market unprofitable.
6. But we *might* not have to worry about future innovation, because, after all, we have a fairly good, extensive government-funded system of medical research and development that could potentially take up the slack.
All this may be true - but think about premise #6. Profit margins are actually fairly small in comparison to fixed costs. I don't imagine that turning over all that drug companies do to the US government R&D system would involve significantly less fixed-costs. If I'm right - then one way or another - somebody has to pay for these fixed costs. If it's not in the pills, then it's in our taxes - so we'd *still* be subsidizing the world, which was the original problem.
The only real way to get drug-prices down is to treat them like commodities and insist on a "most-favored-nation" or world price for what is, after all, a fungible substance. If total global consumption is 10 times what the US uses, and we all paid the same price, an average fixed costs were comparable to marginal costs - then global prices only go up 10% while ours would decline almost 50%.
Indy,
Very nice summary of a concept. One thing I'll note is that the necessary increase in worldwide fixed price might exclude ALOT of people from receiving certain medications. Their prescription prices are substantially depressed from ours. But in general, I agree. There is no real reason why this commodity is so much more expensive in our country than others...especially considering that nowadays the EMEA has requirements for our clinical trials to include a certain amount of research in their populations (which is appropriate) but yet they get to have some control over the price of the product.
I don't think it would exclude very many people globally. Remember, their prices would go up only slightly, while ours would decrease significantly. If the elasticities of demand are moderate for global consumers - then I would figure a small decrease in availability.
But think about the US market! We go on and on about access, affordability, and the uninsured - but all of those problems are at least somewhat related to the vastly elevated price we pay for drugs. So, where things for the rest of the world get a little more expensive, and a little harder to access - things in the US get a LOT cheaper and a LOT easier to access.
Now some of the beneficiaries of the current distorted system are extremely poor people in third-world countries, and there's a good argument to make to try and help those people out with marginal-cost supplies that can't be re-imported.
But the biggest beneficiaries are the richer, developed countries (Britain, Germany, Canada, Japan, etc...) who could easily afford to pay 10% more (their fair share of fixed-costs) and for which there is little argument as to why they should be getting their discounts as charity from the US.
The problem is many of the poorer countries promise (threaten?) to ignore drug patents if the price charged for a drug is (much) above variable cost. Assuming that promise is real, that makes it all but impossible to recover anything more than a small fraction of US drug companies' fixed costs through exports. If the US drug company tries to charge $x dollars above variable cost, and $x dollars in savings is enough for the poor country to build its own plant to make the drug, the poor country will simply make the drugs itself rather than pay the US drug company $x.
Worse, many "non-poor" countries have made the same promise. Domestic politics being what they are, a PM in Canada or Britain may be willing risk a trade war in the name of keeping drugs affordable. Why should another country allow greedy US drug companies to gouge its citizens?
"We want to pay what everyone else is paying so we don't go bankrupt as a nation."
This isn't an accurate understanding. Drug costs are a fairly small percentage of overall health care costs. They are a big deal because they are one of the few areas where patients actually see medical costs rather than having them obscured by insurance.
Your guess in the last paragraph is probably off. Global consumption of the drugs in question is mostly in Europe, Canada, Australia and Japan--so only about 3-4 times what the US uses.
Here is Lowe's blog entry with the comments.
You will need to scroll up for the blog entry itself.
Thanks Yancey, was about to point that out. And what's "on holiday" anyhow? Isn't that how Brits say "on vacation"?
"But producing drugs does not seem to be the government's core competence." Yes, let's please leave this to organized crime, at least for recreational pharma, LOL
Megan,
Thanks for the links, especially to Derek Lowe. I've been in pharma as a vendor for 5 years providing several services and I learned alot reading just that one post.
Anyhoo....prior to pharma, I worked in Academia...briefly. Domenech exuded the characteristic that I think holds academia back the most: a sense of purity, of natural goodness, wholeness, and that if only their work was funded more generously the world's ills would be cured.
To be fair: he wrote an eloquent and gentle rebuttal to your post which had some good point.
The NIH grants and academic research as a whole employs alot of talented people, and some of them develop new therapies with their talent and government money. But so much of it goes to waste and runs the gamut of inefficiency (for instance, alot of time in academia is spent just continuing the flow of grants by writing grant proposals). I don't know how much time, but I wouldn't be surprised if 20-30% of the average principle investigator's time is spent doing that....and that 20-30% of their salary is paid for by the very grants they are applying for...
In the business world, it's a very different model. Yes, there is profit motive. And therein lies the rub....
The only way for the biotech world to develop a treatment for a very small population is to either charge a ton for that treatment. Or, as is becoming more popular, a rich individual or a group of noble people start a non-profit biotech focused on developing treatment options for that rare disease.
The latter is proving to be very effective and self-mobilizing, and I wonder what would happen if alot of money that went into academic research started going towards helping privately funded non-profit biotechs with aims to help specific health areas.
Joe
TreeJoe, your post is incredibly misleading. You're right that Principal Investigators spend a lot of time writing grants. A lot more time than they'd like to, that's for sure. No PI that I know actually likes writing grants.
But meanwhile, the rest of the lab, i.e., the post-docs, lab technicians and grad students, are pretty much doing just research. And there are a lot more of these than PIs.
I'm not trashing the profit motive. But if you define waste as the amount of money spent on stuff besides research, public funded research is way more efficient than Pharma.
Nimed - Didn't mean it to be mis-leading and yes I understand that their lab may or may not be doing research all the time (my experience was that alot of sub-investigators/support staff were 2-3 people and that the PI was spending 50% of their time chasing grants, but I didn't want to say that is the general rule).
Let me put it this way: A business cannot function over a certain amount of inefficiency because it's product becomes too expensive to maintain that inefficiency and it's no longer desired. Academic research, on the other hand, can be as inefficient as it wants as long as it gets it's grants. A lab can be staffed with 8 people for a year producing 1 potentially useless study for a $1 million grant, and as long as another grant comes in it'll keep rolling along just fine.
It's efficiency is not directly tied to it's ability to fund itself.
Not so in business though.
Joe
P.s. Speaking from a business where he believes 20% of it's staff is basically paid about $1.5-2 million a year in gross compensation to do about $250,000 worth of work...
A lab can be staffed with 8 people for a year producing 1 potentially useless study for a $1 million grant, and as long as another grant comes in it'll keep rolling along just fine.
There are drug developers at big pharma companies that have never had a product come to market in their 20-30 year careers. A big part of it is you don't know which study will be useless until you do the work.
Hi Byrk,
Yes, absolutely. The difference is that the pharma company then has to develop a product and sell it at a higher price to compensate for those unsuccessful trials. If someone isn't willing to pay that price, then the company has to become more efficient or go out of business.
In academia, they need to maintain or get better or getting taxpayer funded grants.
See the difference?
Joe
In academia, they need to maintain or get better or getting taxpayer funded grants.
A lot of awards are based on the PIs previous, so if you consistently product nothing of interest you'll stop getting grants. There's a reason why the PI's who publish a lot of papers, also receive a lot more grants.
Are you saying there is zero role for government money in basic research? How would you structure giving out grants if you had the choice?
Why are these people PIs? Isn't it because they are supposed to be the best and brightest with a proven track record? Why put your most productive and creative people out to seek money, even if the rest of the lab just do research? And what about Naomi?
I was unable to understand the premise of Megan's original long post on why she opposes an increased government role in health care. Whatever plan emerges from Congress will increase sales pf prescription medications by large amounts. Why wouldn't this increase profits in the pharmaceutical industry? And why wouldn't it increase R and D in the industry? Do people in the industry really feel that "ObamaCare" will be bad for them? If so, who's paying for the Harry and Louise ads? Is there anybody out there who can explain Megan's argument in terms divorced from libertarian theology?
Stan,
I think there are many questions about how a single-payer healthcare system would drive pharmaceutical research (since we have very little evidence, one way or another, of how a single-payer drives pharma research), I'll raise one scenario:
Obama talked about red pill/blue pill and the need to pick the cheaper drug and how panels would make smart decisions on which treatments are appropriate to help control costs.
If a Pharma company develops a new drug that benefits 30% of a disease-state population (which is not abnormal....lots of drugs are only effective on a small portion of an overall disease state), what will the government decide when there are maybe generics on the market for that disease state?
What about if a new, very effective cholesterol lowering drug comes on the market but it costs $100 for 30 days vs. less effective $20 for 30 days generics?
To be clear, the pharma industry is behind this single-payer system because in a 10-year window it's quite attractive. The longer-term repercussions are far from clear because we have no idea what treatments would be controlled and how they'd be controlled. We just don't know.
Joe
Allow me to be much less specific. With any technology (not just pharma) the second best is almost always an order of magnitude cheaper and only marginally less effective than the absolute best performing solution.
This is because to obtain the best performing solution, the strategy is "How can we make the best, and costs be damned". While the strategy for the second be is almost always "How can we accomplish the same thing at a reasonable price".
Thus the company developing the top solution is relying on early adopters, who are willing to pay thru the nose. Meanwhile, the companies developing the popular solutions are depending on the expensive innovators to find the right approach, and their work involves making that approach cheaper.
Now, if you switch to a system where the gov't (or anyone else) is practically the only buyer of pharmaceuticals, then cost/benefit quickly tells that buyer to drop the best in favor of the second best. But when that happens, there is no incentive for anyone to take today's best and make it cheaper, and even worse, to develop tomorrows new, more expensive best (which will turn into next years cheap second best)
Thanks....that's a great summary of what I was trying to impart....the long-term effects of such a system are very questionable.
great point. I would argue though, that our current system is unsustainable in the sense that many more people have access to that elite level of care than can afford it (or are willing paying for it).
Hypothetically, one can imagine an alternative system in which the those who can afford the elite level of care pay a substantial extra for it (much more than they currently pay, through some premium private plan). Thus the very rich may have health care options a few years ahead of when its available to the average citizen, but in the end you have a sustainable system where the rich subsidize medical research and get cutting-edge health care in return.
Now, if you switch to a system where the gov't (or anyone else) is practically the only buyer of pharmaceuticals, then cost/benefit quickly tells that buyer to drop the best in favor of the second best.
OK, but we're not really switching to that system, we're pretty much there now. We have a limited set of buyers, just as we would under any plan I've seen proposed so far.
In fact, we'd likely have exactly the same set of buyers we have today.
There are two other issues here, Ken.
Sometimes, what's offered for either test or treatment is what's well known and promoted by the big medical companies. New things often languish for want of market.
Between the academic research stage and the production stage; many medical tests/treatments go through a start-up phase, including clinical trails and often the FDA approval process; often funded by angel investors.
One of our investments is a good example. The product is a test for an illness that's among the leading causes of medical malpractice suits. The test is significantly more accurate than the current diagnostic method, FDA approved, accepted by many insurances. The company's fighting the battle to scale up; it's also fighting the how-to-diagnose mindset of the medical community, despite it's higher accuracy rate.
One exit strategy for us will be the sale of the company to another that feels it's a threat to their already established diagnostic market. I suspect many "better" products never make it to find this fate in our current system.
The second issue is that we really don't have a comprehensive method in place for determining what "better" is. To the extant we do determine what's "better," we owe a lot to NIH, which funds many comparative clinical trails and data-mining research projects. For the company I mentioned above, the fastest growth markets are in places like the UK, where such determinations are made and the test is being recommended.
The government already makes a lot of difficult decisions on these kind of issues (though unrelated to pricing) through the FDA, especially with regards to efficacy. With the current interest in genomic and personalized medicine, these issues will only become more difficult to resolve - but the government is not stranger to tackling them, for better, or for worse.
While pricing does add a different dimension, it's important to acknowledge the level of complexity of issues the government already deals (and I would say, quite ably so far) with in pharmaceutical research.
The government can decide whether something has sufficient efficacy to receive approval, or a low enough side effect profile, absolutely.
But the decisions are seperate from the government paying for the item...and even then, Medicare is now negotiating down prices of drugs under it's system (which then pushes up the price of said drug outside of medicare).
Lets say the systems remained seperate: FDA approves drugs as they do now, and another agency decides whether or not to pay for them in the single payer system....whose to say this WILL pay for them? Whose to say they wouldn't try to negotiate a cost? Maybe a fixed cost that is at or below margin?
I'm just pointing out the uncertainities of going down this road. If our government starts controlling the drug costs like other governments do, pharma will go out of business because SOMEONE needs to pay a certain amount per pill to continue funding new research.
Joe
We have no idea what treatments would be controlled and how they'd be controlled. We just don't know.
True enough, but we also don't know how our current system will apply the same controls. The notion that the government system will apply them less fairly or less broadly is just that...a notion. It's entirely possible that the the government might make new and expensive drugs *more* available. We don't know.
And yeah, I'm speaking from experience, I've experienced rationing first hand. My newborn twins were denied a treatment recommended by our doctor, then a series of doctors.
In the U.S. By one of these gold plated insurance plans we hear about.
So I'm not exactly inclined to assume that the goverment will be worse.
As someone in academic biomedical research, Domenech is pretty off-base. Still, the main criticism that I have with Megan McArdle's arguments about drug research isn't in the vital importance of private pharmaceutical research (that's not really debatable), it's the assertion that the industry will wither away under a more highly gov't-regulated health care system.
For example, decreased drug prices may be compensated for by increased drug consumption (as more people are insured and can afford drugs). Since R&D costs are all upfront, and drug manufacturing costs per pill are small (at least for non-biologics), this isn't necessarily a doomsday scenerio for Big Pharma.
Another example is that increased gov't regulation may decrease the marginal value of DTC advertising, substantially decreasing advertising costs for Big Pharma. It might be much cheaper to convince the gov't that your drug is worth using than convincing millions of consumers, doctors, and health care providers. That brings its own problems (and benefits), obviously, but the point is that it wouldn't necessarily spell the end of Big Pharma.
Sid,
I think there is an unknown factor. We're the primary driver of world-wide pharma development. What happens if price controls on new drugs become widespread? What happens if a drug makes it through clinical trials, all the way to market, and the government decides not to compensate for it?
Just saying, lots of unknowns when you introduce government as the primary driver and payer for a huge industry and there's no real prior history of that model.
Joe
" It might be much cheaper to convince the gov't that your drug is worth using than convincing millions of consumers, doctors, and health care providers."
-Wow, that doesn't at all sound like a massive invitation to lobbying, bribery, influence peddling, etc.
This reminds me of the quarreling between academic physicians and those of us who practice medicine in the trenches. Yeah, the ones President Obama thinks go out and perform unnecessary tonsillectomies on kids with sore throats. The ivory tower guys have their model clinics where they spend a half a day a week supervising students and residents, and they always get the ears of the government guys, write practice guidelines that the rest of us are supposed to follow. Each side has its own theories as to how the other works and each side believes it has more than a leg up in practicing medicine. I had to discard a lot of my school learned practices when I started in 1982. Not that academics are always wrong, but it would do them good to experience patient acceptance or rejection once in awhile.
Speak your mind here, good man. We're all ears.
Thanks for the explanations. My problem is that "ObamaCare" is not a single payer system. Furthermore, the government plan, if it survives Baucus's committee, will be strictly limited to people not getting medical benefits through their employer, and therefore will not be a significant player in the short run. So I'm not really sure why Megan, Dr. Feldstein, and other conservatives bring up single payer so much. As regards restrictions to less expensive alternatives, why is it assumed that restrictions on drug type will be limited to public plans? Private insurance plans, including mine, do this all the time.
Stan,
I think I bring up single-payer because that is the road we are on if the government begins offering a "public option" to the general public.
It will, eventually or shortly thereafter, drive small businesses out of offering health insurance. Those individuals will get on the public plan. This will continue unabated until insurance companies are put out of business.
Why do I expect this? Because I can't think of a single massive federal government program that didn't keep on expanding. It has no barrier of losing money, and more and more people will eventually fall under it's mandate.
Very few politicians have the political will to take something away from the populace once they are hooked on it, no matter how bad it is for the country.
See: Medicare & covered treatments
See: Social Security & it's setup
Joe
"Very few politicians have the political will to take something away from the populace once they are hooked on it, no matter how bad it is for the country."
Joe, you're wrong. Most of Lyndon Johnson's War on Poverty was dismantled or whittled down drastically following the 1968 presidential election. Tennessee ended its attempt to provide medical insurance for its citizens a few years ago. California seems to have decided to shred its social support system, at least temporarily. There are other examples. So I say to you, Coraggio, Giuseppe. If "ObamaCare" passes and turns out to be a disaster, your side will win big in 2012, and you'll get a chance to end it. If it turns out to be popular, won't that indicate that it's serving its purpose?
Why not give pharma government grants to help cover the cost of developing new drugs. Cutting costs by cutting out the various middlemen that profit on the current structure (i.e. the cost of marketing drugs).
Because government is not that good at allocating resources? Because it will be just another form of marketing - lobbying/bribing politicians and swivel servants instead of convincing the general public?
So we have a former NIH researcher saying most of the important work is done at NIH, and we have a pharma researcher saying most of the important work is done by pharma? Huge surprise.
No, not really. I read both linked articles, and IMO Derek Lowe was much more even handed in his willingness to acknowledge the strenths of the combined systems while Ben Domenech, though raising some interesting points at the first, crashed and burned in the second half of his piece when he started marginalizing pharma's contribution with a lot of scary talk and handwaving about the "profit motive".
I would agree that Ben Domenech(!) goes overboard in his criticisms of profit motive and its role in medical innovation. However, the the fundamental criticism is that public funding does the heavy lifting in Pharma research. This is not to say that Pharma researchers are doing nothing... they do hard and valuable work... it just says that they could not exist without a massive subsidy to basic research by the Government.
1) Could Pharma make profits if they had to identify the targets as well as make the drugs?
2) Could Government funded researches replicate the process currently dominated by Pharma?
I would argue that the answers are 1) No and 2) Yes. I don't think 2) would be efficient in any way, but it would still be functional. The opposite would not.
Oh, there's no question the government process makes a big dent in the preliminary R&D (about $28.1b grant money was distributed by the NIH in fy2008), but it's hard to say how that compares to Big Pharma since grant money, once received, may be allocated a lot of different ways that include capital equipment purchases. So while the combined R&D budgets of Big Pharma may look only about break even by comparison (Merk, $4.8b fy2008; Pfizer, $7.9b fy2008; etc.), the accounting is not equivalent, and the private companies live under something else that academia is not directly burdened with: they eventually find, test, and market salable products else go out of business. So it is equally unclear how much acadmic research would have useful output in a commercial environment (probably much or most), and how much is wheel spinning that a company with no grant budget to finish up would have cut off sooner and then redistributed the resources more efficiently (undoubtedly some).
Speaking of which, because Big Pharma is business, they contribute something else that academia does not: Tax revenues ($1.999b for Merck corporately in fy2008, plus $3.25b in dividends paid out, which would have generated additional tax revenue by the shareholders). They also provide for the accumulation, and the efficient and profitable management, of enormous quantities of necessary business assets (Pfizer listed $111.1b net assets in fy2008).
Both aspects of the industry -- academic research on one hand, Big Pharma development, testing, and marketing on the other) undboutedly play an important role, and IMO it's a dangerous proposition to go merrily reorganizing it on whims and promises. Your fallback position seems to be "well...government could do all of it in a pinch." Yes, but it's a nasty pinch that would not necessarily go anywhere good, since in addition to being slow and inefficient, the process could become bogged down in legendary waste and red tape (see: defense contracting). Or it could lose sight of its primary purpose and slog forward with major elements of its programs bound up in archaic technology that has been made obsolete by an intervening 40+ years of technological progress, yet for procedural reasons, cannot be ejected (see: NASA).
There are only a handful of ways for a wholesale government intervention to go right, and countless dozens of ways to irreversibly wreck a byzantine, but functional, system.
And on an overall note, I continue to feel that the discussions often devolve toward talking about pharma at the expense of overall medical innovation. There ought to be a lot more to healthcare then simply taking a pill.
And on the role NIH fills; basic research, yes.
But significant investment comparative clinical trails and data mining, too.
Megan, I have been avidly following the war of words you started with your original post on why you didn't support Obamacare. The usual gang (Ezra, Yglesias, Domenech, etc.) are out for your scalp, gleefully scribbling the reasons why you have absolutely no idea what you're talking about. It was good to read Lowe's analysis of what they got wrong and what you got right.
One question - how much do you hate the assholes at Balloon Juice?
Pharmaceutical companies do a lot of basic research, too. It is a myth that they don't. Pharmaceutical companies aren't run by idiots-they won't reinvent the wheel if someone else is footing the bill, but if the NIH and the NSF didn't exist, R&D at private enterprises would simply be bigger to compensate for that lost research to the extent that it was thought to lead to profitable products, and the patients would simply pay higher prices in return for the lower taxes. And if the present model was really the most optimal, it is likely that pharmaceutical companies would greatly increase their grants to the most successful PIs in the absence of NIH or NSF.
What institutions like the NIH and NSF do most effectively is discover things that don't have any immediately obvious profitable applications- things that might not be discovered at a lab under the constraint of producing something that might make money. Some discoveries importance isn't realized for decades.
Are we ever going to get an evidence-based response from Megan to Ezra Klein's devastating critique?
http://voices.washingtonpost.com/ezra-klein/2009/07/on_megan_mcardles_case_againt.html
I'd say it's more devastating to Ezra.
For all its waste, elevating the U.S. government to sole purchaser seems to ensure a much-higher rate of military technology innovation than if we left it to the private sector.
How does this remotely make any sense? The reason the government is the sole purchaser of laser-guided 500 lbs bombs is that we don't allow civilians to lob them around at each other. There is no private market for military technology, unlike for Lipitor or Viagra. Utterly ridiculous.
Next he calls Megan "wealthy" which is pretty confusing, and completely ignores the fact her obesity comments have to do with economics and coercion, not social justice and whether some obesity experts are more sympathetic than others.
Finally, he invokes the left's gold standard non sequitur: "Pharmaceutical companies, for instance, spend less on drug research than on administration and marketing." What difference does that make? So do many, if not most, industries, and no one think the government should run them (this notion is discredited even in Communist China). As an argument for nationalization, this is like saying "Mom spends more time watching TV than driving, so let's have the dog drive the kids home after soccer practice."
They do productization research, and only for well-known medical conditions that have a lot of commercial value to solve.
This is like complaining that farmers only grow crops many people want to to eat, or car manufacturers only make cars that many people want to buy. This is Free Markets 101. Yes, it's tragic there are rare conditions that affect only a small number of people; it would be stupid and even more tragic not to focus on treatments that will benefit more people. This is why free markets work and command economies fail: efficient allocation of resources.
Unprofitable basic research is important, and some funds should be allocated to it. But to suggest the whole system could or should be run that way runs counter to every economic lession of the past century.
The grant process is not nearly as effective as the profit motive. Just last month, there was an article citing the poor progress of nonprofit cancer research.
Inevitably, such endeavours become hostage to the people involved and their egos. Judah Folkman groundbreaking work on angiogenesis was ignored for a decade because his work contradicted most experts' beliefs of how cancers developed.
Big pharma is big trouble. It is attached by the profit motive to big health. Yep, big trouble.
They perpetuate pill popping without good cause.
Way to miss the point. The Military-Industrial complex is a perfect example of purely Gov't-funded demand facilitating plenty of leading-edge innovation from private enterprise. If everyone was on Medicare, there would still be demand for new and better drugs, and since Medicare still pays more for Rx drugs than any other country's consumers, there's no logical reason to claim that Pharma would cease R&D. Reduced profits =/= Zero profits, and basic economics tells us that as long as there is some profit to be made from providing innovative drugs and treatments, someone will seek a way to capture it.
The innovation argument is a bs red herring from people who fail to see that there is no truly free market for Rx drugs now, nor will there ever be one. Its an attack on reality from a position of fantasy.
Have you ever actually used the products of this leading edge innovation? Our stuff is the best military gear in the world, but that still leaves a lot of room for dysfunction, both in the process and the final product.
"Way to miss the point. The Military-Industrial complex is a perfect example of purely Gov't-funded demand facilitating plenty of leading-edge innovation from private enterprise. If everyone was on Medicare, there would still be demand for new and better drugs, and since Medicare still pays more for Rx drugs than any other country's consumers, there's no logical reason to claim that Pharma would cease R&D."
Perhaps, though I would argue that our experience with the military industrial complex is that such an arrangement leads to lots of projects with dubious value.
My main problem with this however is that you are losing track of your original argument.
Remember that a large part of the excuse for having the government take over is that the whole thing is so darn expensive.
You can't use the government experience with the military to bolster that kind of case. Military R&D and appropriations are incredibly expensive.
You can use the military example to show that the government can do R&D, but you can't use it to say that the government can do R&D cheaply.
You apparently have no experience with this system. Yes, the M-I complex does produce some interesting toys by means of a government procurement from private industry. It also wastefully expends enormous quantities of materials and countless man-hours through inefficient procurement methods and layers upon layers of procedural and documentation requirements.
However, government being government, once it has decided that it wants "x", it can and sometimes does exercise the option to pour money into a gaping maw of a pit until the pit is filled and "x" floats to the top. Obviously you can get anything you want short of eternal life by this approach, but it doesn't make it efficient or transferrable to other industries. The defense industry has gotten quite skilled at navigating this system, since after all money is money, so long as it keeps flowing in from somewhere.
Good luck trying to run the healthcare of 300 million by such means.
i guess i would like to ask what is the government's core competence?
redistribution of power/wealth
....within itself. :)
If you are self-insured and if you have a heart attack or your spouse develops diabetes or one of your children has strabismus and needs surgery, your insurance company will drop you. It's called recission, and it's one of the glories of our free enterprise system.
If you are lucky, your state government will guarantee you the right to buy insurance despite pre-existing conditions, and the price of the insurance will be capped by state law. I realize that nobody who posts in this site would ever need a benefit of this type, and of course no self-respecting libertarian would ever take advantage of it, but a question was asked about what government can do, and here is an example.
In reply to Stan:
Yes, the govt redistributes power from the insurance company to the individual in the case you described. I wasn't being entirely snarky when I replied that the core competence of govt is the redistribution of power. That is, essentially, all it does. All our arguments are over when, how, to whom and from whom power/wealth is redistributed.
My major concern with the current bills in the House and Senate regarding health care is that they will redistribute power from the patient and physician to the government. The argument that "insurance companies already do it anyway" is not reassuring. I cannot think of an instance in which a government bureaucracy has functioned with greater compassion and efficiency than a private one. Plus you can sue the private ones. I do not want some random paper-pushing, midlevel, tenured-for-life, bureaucrat in DC dictating to me when and what I can prescribe for my patients. In my experience, the insurance companies have not been as demoniacal in denial of coverage as has been popularized. In fact I think the only time I had an insurance agency deny a patient a medicine I prescribed was when the insurance agency was Medicaid.
I'm in favor of a Libertarian opt-out for all medical treatments or facilities that have benefited from evil Government subsidies.
In reply to marvel:
marvel, I respect your views, but I've talked to many doctors over the years who have had frustrating fights with insurance companies over treatment policies. My own family's experiences as patients has been good in general, but we've also had a few squabbles, in one case about surgically correcting my daughter's badly crossed eyes, in another as to whether our insurance company would pay for colonoscopies when my wife and I reached middle age. In an ideal world I'd be perfectly happy with tight regulation of the medical insurance industry instead of a public option. Unfortunately, this seems impossible because of the nature of American politics. Thus, for want of anything better, I support a public health insurance plan.
Now I'll pose a question to you. If a plan came out of Congress that required individual and employer mandates, that imposed national regulation of the medical insurance industry, that also imposed a moderate tax surcharge on upper income taxpayers to help finance the plan, and which did NOT include a public plan, would you support it?