Jewish World Review Jan. 18, 2000 /11 Shevat, 5760
Gore deplores this because patents, which give innovating companies a period without competition from generic versions of drugs they develop, provide temporary protection from downward pressure on drug prices. But it is demagogic, myopic and false for Gore to say that consumers' interests are served by whatever reduces consumers' drug expenditures. Besides, limiting drug expenditures would increase the nation's overall medical expenses.
The surest way to restrain the growth of spending on drugs is to restrain the growth of medicine's pharmacological options. A certain way of doing that is by squeezing drug companies' profits, which must fund the huge costs of research. A certain way to squeeze profits is with price controls, for which Gore is paving the way with his crude consumerism.
There he goes again. Gore supported Hillary Clinton's health care plan to limit increases in medical expenditures by shrinking and dumbing down medicine. She favored cutting the number of doctors: fewer doctors--"cost centers," she thought of them--would mean fewer doctor bills. And she favored cutting the number of specialists: With their sophisticated diagnostic and therapeutic techniques, specialists are expensive. (Her plan would have been cyanide for New York City's 62 teaching hospitals.)
Medicare is heading for insolvency, and for enlargement, as political pressure grows for prescription drug coverage. About 13 million American seniors--one in three--have no such coverage. These are low-income people--but not the poorest, who have Medicaid. Total drug expenditures by the elderly (not drug prices) are increasing 15 percent a year.
However, an even faster rate of increase might mean a slower growth of health care spending overall. This is because drugs increasingly can prevent or improve treatment of diseases, sometimes obviating the need for surgery or hospitalization. And the velocity of drug development is about to accelerate dramatically.
Probably not until around 1910 did the average visit to a doctor do more good than harm. Since the middle of the 20th century, pharmacology--antibiotics, the polio vaccine, etc.--has made Americans think of themselves as the first beneficiaries of truly modern medicine. Actually, we are at the end of the era of pre-modern medicine.
As drugs developed by the intensely competitive pharmaceutical industry become more capable, prices may decline, as has been the case in the computer industry. Even so, aggregate drug expenditures may rise. Indeed, we should hope they do.
This is so because biology and genetics--especially the fast-unfolding Human Genome Project--are going to revolutionize drug development. Understanding the biological and genetic mechanisms of, say, Alzheimer's (which costs upward of $90 billion a year for doctors, drugs and care) or breast cancer will lead to drug treatments that may be expensive but also cheaper than today's limited responses to those afflictions.
It is a fatal conceit for government to think it can know how much Americans will be willing to spend on drugs after 10 more years of exponential growth in pharmacological prowess. Willing? They will be eager: Wait until baby boomers meet arthritis. And infectious diseases can mutate in response to drugs, so the creative dynamic cannot end.
Many Western nations' pharmaceutical policies are akin to their defense policies--they are hitching a ride on American enterprise. Nevertheless, when pharmaceutical costs are measured in terms of "purchasing power parity" in various countries, Americans spend less per capita on pharmaceuticals than do the French or Germans and just slightly more than Canadians.
When government responds, as surely it will and arguably should, to the desire for Medicare coverage of prescription drugs, it will be the dominant purchaser of drugs. It will want to use its monopsonistic power (the power of a single dominant buyer) to pressure pharmaceutical companies into price controls. Gore already seems ready to sacrifice long-term health benefits for the short-term political benefit of government drug pricing.
Bradley's mild senatorial support for the pharmaceutical industry may have been mere parochialism: The industry is New Jersey's largest employer. He opposed ethanol subsidies until he fell in love with Iowa, whereupon he said he had opposed ethanol because it was unimportant to New Jersey.
Still, Bradley seems less likely than Gore to injure the industry that is poised for exponential increases in its ability to reduce pain, extend and enhance life, and reduce the rate of growth of health care
01/13/00: O'Brian Rules the Waves