Firefighters and Prescription Drugs

[babylonsister]

http://www.truthout.org/article/firefighters-and-prescription-drugs

Firefighters and Prescription Drugs

Monday 02 June 2008

by: Dean Baker, t r u t h o u t | Perspective



Suppose your house is burning down with your family trapped inside. When the fire department arrives at the scene, they tell you the rescue will cost $1 million. After all, aren't your family and your house worth the money?

This scenario should not sound outrageous. It is essentially what the pharmaceutical industry does to us when they ask us to pay their patent-protected prices for prescription drugs. The drugs we need for our health or our lives are almost invariably cheap to produce, just as the firefighters might be able to easily stage the rescue once they have arrived at the fire. But the drug companies, like the firefighters on the scene, have a virtual monopoly on their services at the critical moment. Therefore, they are quite likely to get their price.

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Would it make sense to double the level of public funding to pay the full cost of developing drugs, and then let all drugs be sold at $4 a prescription in a competitive market? We could more than cover the cost to the government by the savings each year on drugs purchased through Medicare and Medicaid. If the drug companies did not own our politicians, we would be having this debate.

If totally replacing the industry's research spending sounds like too radical a step, how about the halfway measure of just paying for the clinical trials? After all, this is where the greatest opportunity for corruption exists, with the industry only revealing the data from the trials that it finds useful to release. Here also, the expense to the government of paying for the trials could be more than covered by lower prices on drugs purchased through government health programs.

We should be having a serious national debate on the relative efficiency of the current patent system and various alternative mechanisms for financing drug research. Unfortunately, the drug companies are so powerful that few politicians are even willing to consider alternatives. In fact, the drug companies are so powerful that few media outlets would even print a column suggesting alternatives. In fact, the drug companies are so powerful that few economists would ever consider researching alternative mechanisms.

So, for the foreseeable future, we will expect the owners of the burning house to shell out big bucks to the firefighters coming to the rescue. And we'll just pretend that there is no better way to do things.