

Print Page E-mail Page Free Markets: The Key to New Drugs at a Reasonable Price By Richard E. Ralston Government control of prescriptions drugs and their prices would blow up the pipeline of the new medications that have significantly improved the lives of millions of Americans. The U.S. pharmaceutical industry spends $22 billion a year on research and development of new drugs. Unlike government-funded research—which can be spent to develop drugs that no one needs or that duplicate existing drugs—pharmaceutical companies must get results. In order to recover their investment, their new drugs actually have to work. The continuing flow of new drugs that these firms produce is the best hope we have to treat and cure our ailments. Senator Edward Kennedy is a longtime advocate of government-run health care and he has serious long-term plans for government intervention in the medical profession. Kennedy, who co-sponsored the HMO Act of 1973, which instituted subsidies for HMOs, is the person most responsible for the Senate’s Medicare prescription drug plan and he has made it clear that drug subsidies for seniors are the first step toward government control of medicine. Kennedy’s stated priority for the next step in this process is government control of prescription drug prices. In addition to discovering and testing drugs, pharmaceutical companies also face enormous administrative costs to obtain FDA approval to put drugs on the market. Hospitals and physicians who dispense drugs also absorb the high cost of complying with a dizzying array of government regulations. If drug firms know that a drug’s price is established by the state—not by patients—there is no interest in discovering, testing and creating new drugs. Drug prices have gone up because demand for better drugs has gone up. Drugs that provide astonishing new relief or a cure are priced high enough to recover development costs and provide capital for more effective research. Yes, scientists working hard to develop new drugs make a lot of money—and they should. They deserve it. A free market in pharmaceuticals is the only way to insure the flow of new, breakthrough drugs and competitive pricing. An authentically free market means other companies—anywhere in the world—are free to develop drugs that are equally or more effective, or competitors who produce similar drugs that are almost as effective at a lower price. Controls on drugs, doctors, and prices will distort the drug market from the science stage to the pricing stage. Congress must face the fact that its laws cannot create a single new drug and that government force will only restrict and inhibit the scientist seeking new medicines. Advocates of government-controlled medicine, such as Senator Kennedy, assume that any new drug brought to market—at whatever cost—must be provided by those who produce it to anyone who wants it at a price determined by government decree. According to this view, the government, and only the government, should supply each of our most basic needs. The result will be a nation of people dependent on government handouts for all essential requirements of life—hardly the republic of free, prosperous individuals the Founding Fathers envisioned. But even the pathetic prospect of the American people lining up for government drugs will not reverse the laws of cause and effect: great minds—including those working in science, medicine and pharmaceutical research—will not work under coercion and neither President Bush nor Senator Kennedy nor their state-sponsored prescription drug coverage will insure a continuing development of effective new medication. Americans who cherish their freedom, particularly seniors who treasure their independence, must reply to the threat of government prescription drugs with the only appropriate response: Leave my drugs—which means those who produce them—alone! Richard E. Ralston is Executive Director of Americans for Free Choice in Medicine. Copyright © 2003 Americans for Free Choice in Medicine. All rights reserved.