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Tilting at Windmills

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June 26, 2007
By: Kevin Drum

AMERICA'S DRUG HABIT....No healthcare system is perfect, and the various European national systems each have problems of their own. Pointing that out is perfectly kosher in healthcare debates, but where does Andrew Sullivan get this kind of stuff from?

The European health systems have, of course, been free-riding on private U.S. drug research for decades. Name a great new drug developed in Europe these past ten years. Their own pharmaceutical industries have been decimated by the socialism Moore loves (and many of Europe's drug companies have relocated to the US as a result). But I fear the left is winning this battle; and the massive advantages of private healthcare are only appreciated when you lose them.

This business about America providing all the world's pharmaceuticals is a common trope on the right, but it's absurd. There are more biotech startups in Europe than in the U.S. Pfizer is targeting Japan as one of its biggest near term growth opportunities (and Japan is also a major source of new biotech development). And plenty of pharmaceutical research is done outside the U.S.: The #3 pharmaceutical company in the world, GlaxoSmithKline, is British. The #4 company, Sanofi-Aventis, is French. The #5 company, Novartis, is Swiss. #6, Hoffman-La Roche, is also Swiss. #8, Astra-Zeneca, is Anglo-Swedish. Their combined R&D spending is slightly higher than the American companies that make up the balance of the top ten.

Now, what is true is that American capital markets are both bigger and generally friendlier to startups than European capital markets, which means that small biotech companies often migrate to the United States in order to get funding. My sense is that Europe is improving on this score, but in any case this has nothing to do with the state of European healthcare. What's more, an enormous amount of basic research is done in American universities and the NIH, most of it publicly funded. This speaks well for our system of higher education, but doesn't really say anything about our healthcare industry, which is famously hesitant to invest in genuinely innovative (but chancy) new ventures. Ironically for big pharma's cheeleaders, it turns out that America's titans of capitalism mostly prefer to leave the risky stuff to the feds.

Bottom line: Universal healthcare systems use plenty of pharmaceuticals — though they're generally a little smarter about it than we are. (America tends to be pretty overmedicated.) Basic pharmaceutical research comes largely from universities and government grants, not from U.S. corporations, which mostly specialize in applied research and commercial development. And non-U.S. pharmaceutical companies are alive and well and cranking out applied R&D too. The American drug industry will do just fine if we move to a universal system here. So will the rest of us.

Kevin Drum 2:17 PM Permalink | Trackbacks | Comments (110)

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Comments

Name a new drug developed in Europe

Wasn't Viagra developed in France?

Posted by: Phil on June 26, 2007 at 2:19 PM | PERMALINK

Andrew Sullivan only cares that his cocktail was made in the good old U S of A

Posted by: sean on June 26, 2007 at 2:27 PM | PERMALINK

Lots of biotech startups in Israel too.

US big Pharma companies don't develop drugs anymore; they partner with and/or buy up the biotechs that actually develop the drugs. Big Pahrma are just marketers.

Posted by: Mimikatz on June 26, 2007 at 2:29 PM | PERMALINK

Kevin, why are you surprised by Andrew Sullivan's fact-free opinions? I appreciate the fact that he is against torture and neonatal genital mutilation, but should we forget his odious support for the Iraq debacle and the fact that he made a habit of branding anyone who disagreed with him on that issue as a fifth-columnist and a traitor? He's still a rightwing hack and the only reason he may sometimes be right about something is because he likes to cultivate a contrarian image.

Posted by: Aris on June 26, 2007 at 2:30 PM | PERMALINK

Q. where does he get this stuff from?

A. his ass....

Posted by: mudwall jackson on June 26, 2007 at 2:30 PM | PERMALINK

The US leads the world in male genital enhancement and impotence drug research.

Posted by: Brojo on June 26, 2007 at 2:31 PM | PERMALINK

"Name a new drug developed in Europe"

RU-486. France.

Posted by: brent on June 26, 2007 at 2:32 PM | PERMALINK

This business about America providing all the world's pharmaceuticals is a common trope on the right, but it's absurd.

Nonsense Kevin. American drug research is on the rise while European drug research is dying a slow death. This is explained by Grace-Marie Turner of the Galen Institute.

Link
"What happened to Europe's vibrant drug industry?
Just a decade ago, more than two-thirds of all drug research was conducted in Europe. Now, 60% is conducted in the United States. Major European drug makers such as Aventis, Novartis and GlaxoSmithKline have shifted significant portions of their research operations from the Continent to the U.S. and beyond. And human talent continues to follow the research money: Some 400,000 European science and technology graduates now live in the U.S., with thousands more leaving every year.
For all this, European investors, scientists and patients have their own political leaders to blame. Deliberate government policy, in the form of price controls imposed by national health-care systems, is slowly choking off a once-thriving sector. "

Posted by: Al on June 26, 2007 at 2:32 PM | PERMALINK

"Name a new drug developed in Europe"

Altace. Germany.

Posted by: brent on June 26, 2007 at 2:35 PM | PERMALINK

Because the US has huge prices for new drugs, we do to a large extent pay for drug research. If we get a health system that has a little bit of sense, it will result in lower drug prices and, in the long term, less drug research.

Less drug research will be a bad thing, but we can't afford to keep paying a few percent of our GDP for drug research.

Additionally, applied research is a very important part of medical research. This isn't pure chemistry, where the geniuses make theories while the commoners pour test tubes carefully. Figuring out which chemicals that look promising in the lab will actually help human beings more than they harm them, as well as the proper dosages, is a huge part of medical research.

I don't defend Andrew Sullivan often, but the American health care system does pay for drug research. If Americans start paying $25 for a bottle of pills, there will be fewer new drugs coming out.

Posted by: reino on June 26, 2007 at 2:36 PM | PERMALINK

Yeah, just like other corporations, drug companies find not having to pay for their employees' health care an enormous advantage to doing business in Europe.

Posted by: KathyF on June 26, 2007 at 2:37 PM | PERMALINK

I believe that there is a lot of truth to this, actually. We in the US support the majority of the world's drug research. We pay FULL PRICE for drugs, and this is the funding source for much research. Thus, although the companies may not be American, the money for research is often American. We also support drug research thru the NIH, and this is a vitally important source of funds.

I do drug research and medical research.

Posted by: POed Lib on June 26, 2007 at 2:38 PM | PERMALINK

Where the drug is developed is irrelevant to where the drug's profits come from. It is the potential profits which attract the capital. Now, one can assert that private capital is largely irrelevant to drug innovation, which Kevin has insinuated in the past, in which case one should simply advocate ending drug patents. One could also say that the profit potential is so much larger in drug development, compared to other uses of capital, that reducing profit potential in drugs will have little effect on private capital flows. If one believes this, and it is certainly more plausible than the first proposition, then the intelligent thing to do is to very slowly begin to reduce the amount of protection for intellectual property in the area of drugs, and observe the capital markets. The dumbest thing to do is to have the noted objective experts Trent Lott and Robert Byrd involved in very detailed pricing decisions for drugs.

Posted by: Will Allen on June 26, 2007 at 2:38 PM | PERMALINK

When it comes to Pharmaceutical companies the country in which they are based (and where they do their research) is of very little importance. All major pharma companies have research offices in both Europe and the US. Asking where research is done is just not an important question (at least for mid-large companies. Country-to-country regulatory environments are more relevant for small biotech)

The relevant question is "from what market do pharmaceutical companies derive most of their revenue/profit?" because that's where the money that goes into further R&D comes from.

That's unquestionably the US. We let pharma charge whatever they want and the rest of the world regulates prices. Thus the rest of the world takes advantage of the dollars poured into the industry by US consumers.

So though what Andrew is saying is (as is often the case) hyperbolic and over-wrought, his essential point is correct: A system which substantially reduces the revenue which pharmaceutical companies can take in from the US market (regardless of whether they are ultimately a US or European company), will correspondingly reduce the money available for R&D on new treatments.

I, for one, think this is a pretty good idea. We've developed most of the treatments which are easily found give our current state of biological knowledge. It probably makes the most sense to focus on distributing those treatments more widely. But we shouldn't pretend that we're going to be able to drastically reduce the amount we spend on prescription drugs without also reducing the amount which is available for further research on new drugs.

As for the publicly funded NIH research, very little of that is drug discovery. Basic biological research (i.e. Academic, NIH funded) is overwhelmingly geared towards finding causes for diseases. Pharmaceutical research (i.e. privately funded) focuses on finding treatments for diseases. These two types of research are obviously complementary, and the cause-finding research is of definite benefit to the groups who try to find treatments. However, while pharma groups do some work to validate the cause-finding work of academics, the vast and overwhelming majority of NIH-funded work is simply not drug discovery. It's not a coincidence that research required to find treatments and demonstrate their safety and efficacy is many orders of magnitude more expensive.

Posted by: TW Andrews on June 26, 2007 at 2:40 PM | PERMALINK

TW, of course, that's another alternative; simply declare the field to be fully exploited and drastically reduce research. Somehow, though, your assertion reminds me of the prominent British scientist who declared in the late 19 century that all worthwhile technological innovation had taken place.

Posted by: Will Allen on June 26, 2007 at 2:56 PM | PERMALINK

Your list of international Big Pharma was quite interesting, but for a reason you probably aren't aware of.

What do GlaxoSmithKline, Sanofi-Aventis, Novartis, Hoffman La Roche, Astra Zeneca (and a few others) have in common?

Answer: massive investments by Bill Gates.

Posted by: charlie don't surf on June 26, 2007 at 2:58 PM | PERMALINK

Um... Gleevec, duh.

Is Sullivan being intentionally ignorant? Better health-care reform reactionaries, please.

Posted by: dk on June 26, 2007 at 3:06 PM | PERMALINK

Well, no mystery why Andy still refuses to allow comments on his blahg.

Posted by: Jamey on June 26, 2007 at 3:06 PM | PERMALINK

TW, of course, that's another alternative; simply declare the field to be fully exploited and drastically reduce research. Somehow, though, your assertion reminds me of the prominent British scientist who declared in the late 19 century that all worthwhile technological innovation had taken place.

I think that the long-term promise of pharmacology and other treatments for disease are very bright.

However, we've exploited most of the known, easily-druggable pathways. Until we get a fundamentally better understanding of human biology, we're going to continue to see a lot of drugs which aren't that exceptional.

Posted by: TW Andrews on June 26, 2007 at 3:08 PM | PERMALINK

Maybe major pharmaceutical development OUGHT to be expensive, not because it's absolutely necessary but because it ultimately the price we pay for being so passive about our health. Nearly every human ailment can easily be ameliorated by diet and exercise. Yes, there are a few degenerative diseases outside their scope, but 98% of what kills us is due to our La-Z-Boy lifestyle.

The reason universal health care is a good idea is that it's obscene to bankrupt ourselves asking for miracle cures when the best cure of all is to eat fewer bad foods and move around a bit more. In the long run, health care is useless if we refuse to do the minimum necessary to maintain good health. Andrew Sullivan didn't do the minimum and contracted HIV. Unfortunately, most Americans feel entitled to do less than their obligated portion of sensible behavior.

Spending twice per capita as any other industrialized nation for health care is a recipe for disaster that more drug research won't be able to cure. In reality, it's an apt symbol of a culture dangerously enthralled with having its cake and eating it too.

Posted by: walt on June 26, 2007 at 3:12 PM | PERMALINK

C'mon Al - Galen is funded by the Scaife and Bradley and all the rest of the right wing agenda types.

Posted by: Ethel-to-Tilly on June 26, 2007 at 3:13 PM | PERMALINK

Oh yes. The Galen Institute

http://www.mediatransparency.org/recipientgrants.php?recipientID=1363

you know, i actually bothered to look into this article and research it's source (right wing health poicy think tank funded by the usual suspects). Then I realized it was Al who posted the response. If I read that I wouldn't have bothered.

Posted by: IMU on June 26, 2007 at 3:13 PM | PERMALINK

"The European health systems have, of course, been free-riding on private U.S. drug research for decades."

Maybe Andrew, maybe ...

But private U.S. drug research has been free-riding on the U.S. taxpayer for decades.

From what I've seen, most initial and tier two drug research in the country is carried out at the university level, and 90% of that seemed to be funded by federal grants.

Pharmaceutical companies in America have had a sweet deal for a long, long time now.

Posted by: TB on June 26, 2007 at 3:15 PM | PERMALINK


We pay FULL PRICE for drugs, and this is the funding source for much research. Thus, although the companies may not be American, the money for research is often American

Yes, but drug companies also spend vast amounts on marketing and publicity in the US. Far more than they do on R&D...

Posted by: ajay on June 26, 2007 at 3:16 PM | PERMALINK

Too many British conservatives have been shell-shocked by the relatively poor quality of much medical care in Britain (for instance, when the state doctors there found a cavity in my mom's mouth while inspecting students at her school, they just yanked it out without anyone's permission). They often tend to forget that there are different types of socialized medicine. France has a better system than the US and the UK. Taiwan found its citizens actually spent less on healthcare after the switch. In general, the biggest failures in this department tend to be English-speaking countries like the UK, Canada and Australia. Pretty much all conservative horror stories of socialized medicine come from the UK and Canada. I guess the French speak French and are French, so they don't count.

Posted by: Reality Man on June 26, 2007 at 3:17 PM | PERMALINK

Yes, drug companies will stop researching and developing new drugs...just like gamblers on a losing streak stop putting their money down.

Drug companies will continue to spend on R&D. It's what they do. And if they don't, somebody else will.

(Besides, most of the research is paid for by universities and NIH.)

Posted by: Jamey on June 26, 2007 at 3:17 PM | PERMALINK

"Yes, but drug companies also spend vast amounts on marketing and publicity in the US. Far more than they do on R&D..."

What, you don't enjoy seeing the Ditka pretending a football is his cock? You ungrateful bastard.

Posted by: Reality Man on June 26, 2007 at 3:19 PM | PERMALINK

Nearly every human ailment can easily be ameliorated by diet and exercise. Yes, there are a few degenerative diseases outside their scope, but 98% of what kills us is due to our La-Z-Boy lifestyle.

Indeed. That's why people with good diet and sufficient exercies don't die.

Posted by: Stefan on June 26, 2007 at 3:19 PM | PERMALINK

From what I've seen, most initial and tier two drug research in the country is carried out at the university level, and 90% of that seemed to be funded by federal grants.

This is a pretty common misconception. Discovery of what genes/pathways/other causes a given disease is largely academic and publicly funded.

Discovering how to cure diseases is almost entirely done by drug-discovery companies at their own expense. It's true that they benefit from the research on what causes diseases, but target discover (the term for finding the causes) is vastly cheaper than figuring out how to treat a disease, let alone determine that a treatment is sufficiently safe to be put on the market.

Posted by: TW Andrews on June 26, 2007 at 3:21 PM | PERMALINK

It is important to remember the main driver behind new drug development is not better health care, but increased dividends to stockholders. Too often a new drug becomes the standard of treatment while offering at best incremental increases in efficacy and substantially increased costs. This would not matter if we had infinite resources to apply to health care. A large part of the problem with our health care system is it’s emphasis on supplying high tech heroic healthcare to those with health insurance (and this often in the waning years of their lives) while denying even basic care to those who without.

Posted by: fafner1 on June 26, 2007 at 3:23 PM | PERMALINK

Maybe I'd have a bit of sympathy if the pharma companies didn't spend so much goddamned money on useless marketing materials for their drugs, regardless of their efficacy. My best friend is a pharm sales rep, and I call him a glorified UPS man. His entire garage is filled with pens, calendars, tissue boxes and other crap that he must drive around and drop off at Dr's offices. On top of that he has several thousand dollars a month with which to take docs out to dinner. This is abhorrent when one considers that these materials and practices sole purpose is to persuade doctors to prescribe the drugs based on nothing having to do with their usefullness or advantage over other drugs. It's a goddamned racket.

And what good is their private R&D when the money isn't in the cures, it's in the treatments and therapies? I'd like to see some studies that illustrate where the bulk of their research is targeted, and I wouldn't be surprised in the slightest if it were targeted based solely on areas that will yield the most profit as opposed to alleviating the most suffering.

Posted by: beedee on June 26, 2007 at 3:23 PM | PERMALINK

>The European health systems have, of course, been free-riding on private U.S. drug research for decades.

Funny, I thought American firms have been free-riding on NIH research and university research for decades. For example, stem-cell research is going nowhere as long as not a single government dollar can go towards it.

Posted by: bartkid on June 26, 2007 at 3:24 PM | PERMALINK

Walt, if you believe what you say, do you object to rich, or, at least non poor, people investing their own wealth for the purpose of developing drugs for their own use? In other words, rationing drugs like we ration automobiles?

Posted by: Will Allen on June 26, 2007 at 3:24 PM | PERMALINK

And plenty of pharmaceutical research is done outside the U.S.: The #3 pharmaceutical company in the world, GlaxoSmithKline, is British. The #4 company, Sanofi-Aventis, is French. The #5 company, Novartis, is Swiss. #6, Hoffman-La Roche, is also Swiss. #8, Astra-Zeneca, is Anglo-Swedish. Their combined R&D spending is slightly higher than the American companies that make up the balance of the top ten.

All those companies have American facilities doing R&D. Anything that slows American R&D will affect their American operations as well.

Basic pharmaceutical research comes largely from universities and government grants, not from U.S. corporations, which mostly specialize in applied research and commercial development. And non-U.S. pharmaceutical companies are alive and well and cranking out applied R&D too.

It's still very expensive, and they have to try thousands of candidate compounds, costing about $400M per successful drug, (they could save a lot of money if they knew before phases i, ii, iii and iv which drugs would fail.) If you slow the infusion of money, you will slow the development of new drugs, for American companies and the American facilities of foreign companies.

The American drug industry will do just fine if we move to a universal system here.

true enough. They'll just be a little smaller and develop new drugs more slowly. On the whole, they will probably be more risk-averse. Like everyone else, they are constructing facilities where the markets and money are, China and India.

Posted by: MatthewRmarler on June 26, 2007 at 3:27 PM | PERMALINK

The marketing budgets for big pharma are larger than their research and development budgets. And much of this goes to TV commercials to the layman telling him or her to "ask your doctor about . . ." It's more about creating a market than treating desease.

Posted by: fafner1 on June 26, 2007 at 3:29 PM | PERMALINK

mimikatz: US big Pharma companies don't develop drugs anymore; they partner with and/or buy up the biotechs that actually develop the drugs. Big Pahrma are just marketers.

Big Pharma develops lots of drugs, in addition to buying up the biotechs that have promising leads.

Posted by: MatthewRmarler on June 26, 2007 at 3:30 PM | PERMALINK

Hmmm, TW you assume in your first post that high drug company profits result in more creative research, which leads to better drugs. It hasn't in my estimation, instead we've seen a surge in "Me Too" drugs like Cialis or Lunesta which just try to take market share from existing drugs. Furthermore a rise in drug company profits has correlated with a rise of lifestyle drugs like sleep aids and ED therapeutics which don't address the significant public heath challenges of our time. Right now the drugs we need most are the ones with the least profit potential. If healthcare spending is less consumption oriented than it is in our country, and more based on actual needs, it makes the drugs that we actually need in this country the ones that will improve the bottom line.

As for your second post, I submit that we are already shifting our understanding of biology with new fields such as epigenetics and micro RNA, but that NIH funding has dismally failed to keep pace, leading to a nationwide scientific funding crisis. If funding had continued under Clinton levels, there would be plenty of "easily-druggable pathways" ready for exploitation.

Posted by: dk on June 26, 2007 at 3:31 PM | PERMALINK

anyone but me aware of the vigorous push by NIH for corporate (pharma) funding of NIH studies? just thought i'd throw that in since these seem to be discussed in juxtaposition... some research is actually one in the same.

Posted by: dusty59 on June 26, 2007 at 3:32 PM | PERMALINK

Al: And human talent continues to follow the research money: Some 400,000 European science and technology graduates now live in the U.S., with thousands more leaving every year.

I mention this frequently.

The European pharma companies are growing faster in the U.S. than in Europe.

Posted by: MatthewRmarler on June 26, 2007 at 3:33 PM | PERMALINK

Will Allen wrote, One could also say that the profit potential is so much larger in drug development, compared to other uses of capital, that reducing profit potential in drugs will have little effect on private capital flows.

But, speaking in terms of economics, what the drug companies are after is not "profits," which are returns to capital in a competitive market, but rather monopoly rents.

Posted by: liberal on June 26, 2007 at 3:33 PM | PERMALINK

Hmmm, TW you assume in your first post that high drug company profits result in more creative research, which leads to better drugs.

Yes to the first, no to the second. More money pretty much directly translates to more research. More drug discovery doesn't necessarily lead to better drugs (as the examples you cited show), and that's largely due to the fact that human biology is enormously complicated.

I agree that we should increase NIH funding, even if we had doubled the Clinton levels, it's unlikely that there would be vastly more drugable targets. These things take years to decades to find and validate. It's just a long, complicated and expensive process to find effective treatments for complicated diseases.

Posted by: TW Andrews on June 26, 2007 at 3:38 PM | PERMALINK

IMU wrote, Oh yes. The Galen Institute http...

But you don't need to make ad hominem references their funding sources (not that it's necessarily inappropriate).

Look at this nonsense that they state on their "About" page:

"The Galen Institute believes that:
* Consumers and their physicians should have authority and responsibility over their own health care decisions.
* A consumer-driven market will lower costs, promote innovation, expand choice, and increase access to better medical care.
* The vibrant free market will encourage research and innovation and provide better access to new medical technologies.
* Updating outmoded tax policy will facilitate greater access to more affordable health insurance."

Anyone who thinks that a rational, efficient medical delivery system can be based on consumer choice and physician decisions has no understanding of health care economics whatsoever.

Posted by: liberal on June 26, 2007 at 3:39 PM | PERMALINK

The thing I hate most about how much drugs cost in this country is that we are subsidizing the rest of the world.

If it takes $100 to develope a drug and the company goes to France and wants to sell its drug. France says they will buy it for $1 a pill. Since the marginal cost is $.00001 then the company sells 10 pills to France and makes $10. Now, the only other country in the world, the US (yes this is an overly simplistic example) has a market for 30 pills. In order for the drug company to cover its cost and make a decent profit the drug company sells the pills here for $4 a pill. So it gets $120 in the US and $10 in France for a profit of $30.

I don't know if $4 a pill is a fair price but I can do the math. $4 in the US is a lot more than $1 in France.

So, the US is DIRECTLY giving money to France.

Why aren't the Freedom Fries lovers screaming that our drug policy is giving American money to the French government?

Why can't we pass a law that forces the drug company to sell the drug in the US market for no more than the average price it sells the drug to other rich industrialized nations?

Posted by: neil wilson on June 26, 2007 at 3:48 PM | PERMALINK

Too many British conservatives have been shell-shocked by the relatively poor quality of much medical care in Britain (for instance, when the state doctors there found a cavity in my mom's mouth while inspecting students at her school, they just yanked it out without anyone's permission).

I'm British and this story has to be fallacious. In-school dental examinations? Any other British readers think this is completely bogus?

Yes, Conservative newspapers love (and often distort) stories about the NHS, yet it remains one of the most popular institutions with actual Britons. Given the level of funding it gets compared to systems among its continental neighbours it does a remarkably good job.

I'm from a working class family. My brother was born with only 5/8ths of one kidney working and given a week to live at three months. NHS Surgeons gave him a revolutionary treatment at the time, a ureterostomy, to prolong his life by six months they said, but in fact, committing themselves to open-ended care. Every summer until he was 8 he was hospitalized for 4-6 weeks stretches for surgery or monitoring. At 14, all his bits were reconnected, so he could live normally. Now, he's a skilled machinist working for a company that exports its custom work worldwide.

No NHS, no brother. That's what I call a disastrous outcome. I realise the plural of anecdote is not data, but I suspect there are millions of Britons with knowledge of similar cases.

Both myself and my brothers had free orthodontic treatment to correct problems we all shared.

These are not the only occasions myself or members of my family have used the NHS. In a wide circle of family, friends and acquaintances I am unaware of anybody with non-trivial complaints about treatment.

I get a little bored with the fourth-hand hearsay recounting of disaster stories about the NHS.

Posted by: Alan de Bristol on June 26, 2007 at 3:49 PM | PERMALINK

This business about America providing all the world's pharmaceuticals is a common trope on the right, but it's absurd.

I don't know who claims "all". I think the claim is that America produces about 60% of successful new drugs.

Posted by: MatthewRmarler on June 26, 2007 at 3:50 PM | PERMALINK

There is a finite number of druggable targets, by which I mean small molecule drugs like the vast majority of things people take. Most drugs target some kind of protein. That's why that whole "genomics revolution" was a bust: genes are generally not targetable.

This is also why when you hear some new amazing discovery linking gene X with disorder Y, it means almost nothing in terms of developing therapies.

Consider also that today aspirin would most likely not be approved due to the GI side effects (ulcers, etc.) What does that say?

Academic groups do not discover drugs. They publish papers with introductions like "compound X had an IC50 of Y on such and such cell line". Killing a cell line in culture is no big deal. Can you do it selectively? Can you do it in an animal and eventually human? Can you do it without drug-drug interactions or other tox events? Yeah, all that stuff costs a hell of a lot to figure out, and no academic group in the world has the time or money to do that.

Posted by: Bush Rules on June 26, 2007 at 3:52 PM | PERMALINK

Name a new drug developed in Europe

Citalopram (aka Celexa), Denmark
Escitalopram oxalate (aka Lexapro), Denmark

(Both incredibly effective anti-depressants developed by Lundbeck)

Posted by: Doodle Bean on June 26, 2007 at 3:55 PM | PERMALINK

Will Allen brings up a point which is very seldom discussed.

Drug patents.

1. Drug company lobbyists, unsatisfied with the profitability of producing a product that sick people need for basic survival, bribe lawmakers into increasing the length and scope of drug patents.

2. Lengthened drug patents, or altered rules on scope allow drug companies to rake in huge profits; which are not invested in more R&D, or even shareholder dividends, rather, spent on marketing campaigns (which should not be necessary, if the drug is truly a lifesaving drug, rather than a lifestyle-enhancing PRODUCT) and obnoxious CEO compensation, as well as funds for continued lawmaker bribery.

3. This cycle continues, and drug CONSUMERS get the shaft. (Literally, as in the case of ED "medications")

Posted by: osama_been_forgotten on June 26, 2007 at 3:57 PM | PERMALINK

One of the blog sites, FDL perhaps, showed the per capitem cost of healthcare and the effects in a number of countries in the last week or two, six countries I think.

The US led only in the cost per head (despite the fact that only about 50% of us have healthcare!!!), and trailed in all the other parameters.

BTW --- Viagra was developped at Pfizer's Crawley, Sussex, facility. When one goes into any cell, micro or developmental biology lab, or into a pharmaceutical research facility in the US one is pressed to find a US-born scientist. Our daft spendthrift President and our ever dumbing-down education system mean that that research will not be done here in the US much longer, because pretty well everywhere else will spend more money on better facilities so there scientists will stay at home.

Posted by: maunga on June 26, 2007 at 3:58 PM | PERMALINK

Quite a controversy. Should'nt we ask our Doctor?

Posted by: bncthor on June 26, 2007 at 3:58 PM | PERMALINK

Favorite quote:

I see no problem with the wealthy having access to better care than the less wealthy

Response:

The problem with the wealthy having access to better care than the less wealthy is that disease does not respect class boundaries as much as Andrew Sullivan. For a contemporary example of this see MRSA, or the work of Dr. Paul Farmer.

Fire is another destructive force which fails to inflict the poor alone and we seem to do OK with socialized fire departments don't we?

Posted by: Ugly Moe on June 26, 2007 at 3:59 PM | PERMALINK

Actually, I could quite a few. My fiance suffers from MS, and many of the most promising new drugs are being developed and tested in Europe. Another line of research not being pursued here, embryonic cell research being conducted in New Zealand holds great promise. Whether these initiatives bear fruit is unknown, but the research is being conducted elsewhere. Sullivan's contention is plainly false and ridiculous, and a trite conclusion to a overwhelming problem.

Posted by: Jacek on June 26, 2007 at 4:02 PM | PERMALINK

We should shift to a government sponsored prize bill system for drug research and try to separate pharmaceutical research from pharmaceutical production. Seems far more rational than the mess we have now.

"Develop a drug that does X and put the formula in the public domain, and we pay you $whatever-million." Keep cranking out bills for each X you might want done.

Posted by: BunBun vonWhiskers on June 26, 2007 at 4:02 PM | PERMALINK

just my 2 cents. Isn't Andrew ultimately compaining that drug company profits will decline? supposition: That 1/6th of the pop of USA is underinsured and doesn't buy Lipitor. Conclusion: Under a single payer, universal healthcare, 1/6th more patients will get lipitor therefore the price can drop by close to 1/6th ( 16.7%) and still maintain profits. My Uncle in Canada gets lipitor free so its not a stupid observation.

Posted by: Lurky on June 26, 2007 at 4:03 PM | PERMALINK

Even if it is true that we develop more new drugs, most of these drugs are going to benefit a very small portion of the population, and usually in a very small way. A system that can't prevent infant mortality or deal with broken bones is not a working system, even if it can help grandma live to 94 instead of 92.

Posted by: DBake on June 26, 2007 at 4:06 PM | PERMALINK

"The #3 pharmaceutical company in the world, GlaxoSmithKline, is British. The #4 company, Sanofi-Aventis, is French. The #5 company, Novartis, is Swiss. #6, Hoffman-La Roche, is also Swiss. #8, Astra-Zeneca, is Anglo-Swedish."

Lets see, US-based major R&D & developemnt centers:

GSK:
King of Prussia, PA
RTP, NC

Sanofi Aventis:
Bridgewater, NJ
Tucson, AZ (discovery)

Novartis:
East Hannover, NJ
Cambridge, MA (discovery)

Roche:
Palo Alto, CA
Nutely, NJ
Boulder, CO
Florence, SC

AZ:
Wilimington, DE

Just to name a few. Just about all of the European-based sites rely on the US for their major discovery programs.

Posted by: BlaBlaBla on June 26, 2007 at 4:06 PM | PERMALINK

The pharm research argument against single payer is even more bogus then that: Big Pharma all over the world depends on the basic science reasearch funded by taxpayer money. In the U.S. it's mostly via NIH, but other government funded entities... and yes, in other other coutries too. We are paying for it with our tax dollars already. And patent law actually was rewritten to limit ability of Government/Taxpayer from earning money off private patents that really depended on public research.

Posted by: dr.steveb on June 26, 2007 at 4:06 PM | PERMALINK

Just because a company is incorporated in, Germany, France, or the United States tells you nothing about where the capital investment comes from or where it goes. The truth of the matter is that the foreign pharmaceutical firms have moved a lot of their research to the United States in the last few decades. The firms you listed have several large research facilities, many of them relatively new, in the United States; and much of the profit that provides the research budgets is accumulated in the United States. That is the meaning of the statement that the US subsidizes everyone else- and it is fairly noncontroversial.

Yes, government funds a lot of basic research in the universities, but you are badly mistaken if you think pharmaceutical companies don't fund a good part of this themselves, in the same locations, and also perform similar research in their own laboratories; they most definitely don't do just applied research.

In summary, the assertion that pharmaceutical research would be just fine when the US goes universal care may be correct, but pointing to research in Europe does nothing to actually support the assertion, and we won't actually have proof without performing the experiment.

Posted by: Yancey Ward on June 26, 2007 at 4:07 PM | PERMALINK

Fire is another destructive force which fails to inflict the poor alone and we seem to do OK with socialized fire departments don't we?

Uh oh. That's like a dog whistle for Ron Paul supporters.

Posted by: Disputo on June 26, 2007 at 4:07 PM | PERMALINK

IT'S A LEFT-WING POINT!!!

It's a left-wing point, despite the fact that Andrew Sullivan says it and that he explains it so wrongly. What matters is not where in the world *research* goes on but where in the world research is ultimately *paid* for--by consumers.

It is true that since US drug prices are so high compared to Europe's, the US pays for more than its fair share of research. The solution can be either right-wing (demand that European governments stop negotiating lower drug prices with pharma companies) or left-wing (demand that the US government start negotiating).

I'd advocate the latter, and if pharma R&D drops as a result, the US government can fund more public research.

Stem cells, anyone?

Posted by: dsf on June 26, 2007 at 4:07 PM | PERMALINK

In addtion, Roche is the majority shareholder of Genentech, the premier biotechnology company in the world, located in S. San Francisco, CA.

Posted by: BlaBlaBla on June 26, 2007 at 4:09 PM | PERMALINK

Well, liberal, if you want to call the profits made by a monopolist rents, fine, but it doesn't change the point. If one believes that such potential rents are unimportant to attracting private capital, or that private capital is unimportant to developing useful new drugs, fine, do away with the rents, or alter the protection extended to the monopoly. There was nothing empirical in the manner in which Congress came to where it is today regarding monopolies granted for drug manufacture, and there is no reason to believe it is currently at the optimal spot between innovation and price competition. It makes a lot more sense to slowly reduce the amount of protection granted to such monopolies, and observe how capital markets and rates of innovation change, as opposed to having the nitwits we elect to Congress being intimately involved in drug pricing decisions.

Posted by: Will Allen on June 26, 2007 at 4:17 PM | PERMALINK

Any implementation of state-controlled medical insurance and care, without the option to buy your own private care, is a major surrender of individual autonomy and an ominous advancement of state power.

Posted by: Leninsky on June 26, 2007 at 4:17 PM | PERMALINK

As Molly Ivins noted years ago, drug companies spend much more on ads and promotional gimmicks than on R&D. In the year 2000, for example, 30 percent of Fortune 500 drug company expenditures went to marketing and administration, whereas only 12 percent went to research and development.

Worse yet, much if not most of the research money isn't actually spent on developing truly new drugs, but tinkering with existing ones just enough to create new, and newly patentable, ones.

Posted by: Phoenix Woman on June 26, 2007 at 4:19 PM | PERMALINK

From OBF:

Lengthened drug patents, or altered rules on scope allow drug companies to rake in huge profits; which are not invested in more R&D, or even shareholder dividends, rather, spent on marketing campaigns (which should not be necessary, if the drug is truly a lifesaving drug, rather than a lifestyle-enhancing PRODUCT) and obnoxious CEO compensation, as well as funds for continued lawmaker bribery.

OBF, do you even know what the definition of "profit" is from an accounting perspective?

Also, do you even know how much is actually spent on "marketing", or do you make the same mistake everyone else seems to make by lumping marketing in with a lot of other business expenses?

And are you implying that lifestyle-enhancing drugs have no place in the market, or that companies should be prohibited from advertising them? Please elaborate.

Posted by: Yancey Ward on June 26, 2007 at 4:22 PM | PERMALINK

"Any implementation of state-controlled medical insurance and care, without the option to buy your own private care, is a major surrender of individual autonomy and an ominous advancement of state power."

Because you'd much rather see us surrender our power to the hyperrich, I guess. Furthermore, talk of individual autonomy in a place that doesn't even recognize habeas corpus any more is beside the point.

Posted by: Phoenix Woman on June 26, 2007 at 4:23 PM | PERMALINK

I'm with "walt." No compassion for people who make mistakes. Screw 'em unless they can pay retail. I'm sure our economy will be just fine if all those folks are left to suffer and die (hopefully fast). And people with HIV, it's especially important that we show them as much hostility as possible. If they can't pay retail for their mistake (unprotected sex being a lapse in judgment no doubt tens and tens and tens of millions of Americans have never even once in their lifetime) then it's up to us that they "pay" some other way.

I just love reasonable conversation about healthcare! It brings out the best in us all.

Posted by: Gabe on June 26, 2007 at 4:24 PM | PERMALINK

Phoenix Woman,

And please inform us what part is marketing, and what part is administration?

Posted by: Yancey Ward on June 26, 2007 at 4:26 PM | PERMALINK
I think the claim is that America produces about 60% of successful new drugs.

Out of curiosity, does anyone here have any idea what percentage of unsuccessful new drugs are produced(meaning developed) in the USA?

Boy, imagine how complicated that whole discussion would get, if people had, for instance, a way to actually talk to people on a different continent in real-time, or communicate instantly or very quickly using written text.
I mean, they'd be able to collaborate! With foreigners!

The mind boggles ...

Posted by: kenga on June 26, 2007 at 4:27 PM | PERMALINK

I find the obsession with private insurance interesting. The purpose of any insurance is to pool risk, itself a "socialist" idea that we all have come to accept. Universal health care creates a larger risk pool. As for losing choice when going to a single payer system, have you tried choosing a health care provider at 50 yrs old? I'd say the insurance company is choosing the customer not the other way round. The whole discussion from the right-wing point of view is about fear. This from a country that put a man on the moon. Sheesh.

Posted by: Lurky on June 26, 2007 at 4:34 PM | PERMALINK

Now Yancey, the DEA, for instance, very clearly believes that a number of life-enhancing drugs have no place in the market, and actually kills a number of people trying to bring such to market every year. And imprisons many many more.
So we get a situation that looks like this:
boner pills = good
ditchweed = grab that hippie and bust his head
(dramatized for effect)
Hmmm. This seems to be somewhat tangential to the topic at hand. Alas. Or is it possible that pharmaceutical companies have had some involvement with controlled substance legislation?

Posted by: kenga on June 26, 2007 at 4:37 PM | PERMALINK

It also ought to be noted that the FDA's systems and requirements for proving the worth of new drugs play a part in both location and successful innovation. Definitely not something a libertarian would notice, but a real factor.

The leading Pharma companies are located in countries that have similar, strict scrutiny systems.

Posted by: Bruce Wilder on June 26, 2007 at 4:39 PM | PERMALINK

Profit is for sissies.

Posted by: EBITDA on June 26, 2007 at 4:40 PM | PERMALINK

Lurky,

It is a question of autonomy. Personally, I would rather pay for all my medical care out of pocket up to a limit, let's say, 25% of my income. For the rest, I would purchase a policy from an insurance company, maybe even a government sponsored entity if I thought the policy worthwhile.

With univesal care, however, you are at the mercy of the government program, and without choice. Now some are quite willing to put themselves under such a program, but it should not be surprising that many don't like the idea. How would you feel if you had to get your food from the government every week, and could not purchase it on your own, and had to accept what selection they offered? Wouldn't you feel just a little under someone else's control?

Posted by: Yancey Ward on June 26, 2007 at 4:44 PM | PERMALINK

"Phoenix Woman,

And please inform us what part is marketing, and what part is administration?"

And what part of that marketing expense is acutally DTC and not general company marketing activity?

This SGA argument is just one classic canard amongst the Drum sycophants. The other of course being the "university led tax payer effort" being the source of new drug innovation.

Posted by: BlaBlaBla on June 26, 2007 at 4:44 PM | PERMALINK

Kenga,

Pharmaceutical companies don't pay much attention illegal drugs (though they have and do study some of them and their effects), and would be quite willing to produce them if they were legalized, which I would actually like to see happen, but, as you wrote, it is a tangential topic.

Posted by: Yancey Ward on June 26, 2007 at 4:50 PM | PERMALINK

Not to split hairs, but Glaxo's CEO actually keeps his office in Philadelphia.

Posted by: GST on June 26, 2007 at 4:51 PM | PERMALINK
Consider also that today aspirin would most likely not be approved due to the GI side effects (ulcers, etc.) What does that say?

Nothing, because drugs with equally severe or more severe side effects are approved all the time, so it isn't even true to start with.

Posted by: cmdicely on June 26, 2007 at 4:51 PM | PERMALINK

Look over there, a health insurance underwriter reading Phoenix Woman's "Any implementation of state-controlled medical insurance and care, without the option to buy your own private care, is a major surrender of individual autonomy..

individual automomy.... the underwriter laughs and laughs and laughs.

Posted by: undersiege on June 26, 2007 at 5:06 PM | PERMALINK

correction it's Leninsky, not Phoenix Woman who's concerned about automony. But it's still funny to the ins. underwriter.

Posted by: undersiege on June 26, 2007 at 5:11 PM | PERMALINK

the U.S.' research and development numbers are artifically inflated by our for-profit model on the whole as well. no other culture spends billions re-developing drugs which have already been developed but in a different shape or color or what have you, just to make a new product to compete with whatever the latest pharmaceutical craze may be. a universal system gets a drug and moves on. there's no need to come up with a great "fourth quarter" drug to please the stockholders.

Posted by: itsbenj on June 26, 2007 at 5:15 PM | PERMALINK

I don't defend Andrew Sullivan often, but the American health care system does pay for drug research. If Americans start paying $25 for a bottle of pills, there will be fewer new drugs coming out.
Posted by: reino on June 26, 2007 at 2:36 PM | PERMALINK

um, no. yes, the American health care "system" does pay for drug research, but not for the world at large as Sullivan is suggesting! ludicrous idea. and what country, exactly, are you living in anyways? with my employer-funded Aetna insurance, $25 for a bottle of pills is the absolute least I would be charged for a prescription of any kind.

Posted by: itsbenj on June 26, 2007 at 5:19 PM | PERMALINK

You know that army of sales reps each company deploys? The hot blondes who nag doctors every week to prescribe their medication? On average each of those people cost the company $200,000 each year - the car, the sample drugs, the dinners and lunches, the bonuses, etc.

Each company has TONS of those people. I think Pfizer has around 8,000.

I think arguing over the semantics of drug research funding is missing a very important point: these companies spend a *lot* of money on things that isn't research. Big Pharma wants you to think that cutting their drug prices by even $1 would be catastrophic for the future of drug development, but clearly, that is not so.

There's nothing wrong with drug reps or spending money on advertising but the amount they spend is obscene. It's like Glenn Reynolds and other pretend libertarians crying over the $20 million pork projects that supposedly break the government's bank.

Posted by: joshua on June 26, 2007 at 5:19 PM | PERMALINK

kenga: Boy, imagine how complicated that whole discussion would get, if people had, for instance, a way to actually talk to people on a different continent in real-time, or communicate instantly or very quickly using written text.
I mean, they'd be able to collaborate! With foreigners!

International cooperation and communication within pharmaceutical companies happens every day. Even job interviews (mine with Novartis in NJ and MA, for example) entail international communication.

Posted by: MatthewRmarler on June 26, 2007 at 5:28 PM | PERMALINK

I think what Andrew is getting at when he talks about "free riding" is the fact that 85% of the pharma industry's profits come from the United States. They basically create drugs for the U.S. market, and then sell them to the rest of the world because they have to. The incentive to innovate comes from the fact that huge rents can be extracted in the United States -- and then other countries eventually get access to the drugs, either pirated, at cut rate, or after the patent runs out.

Posted by: Nils on June 26, 2007 at 5:29 PM | PERMALINK

bartkid: For example, stem-cell research is going nowhere as long as not a single government dollar can go towards it.

Lots of federal, state, and private money goes to stem cell research. State and private money go into embryonic stem cell research. A small amount of federal money finances embryonic stem cell research as well, but only on already-established cell lines.

Posted by: MatthewRmarler on June 26, 2007 at 5:32 PM | PERMALINK

After reading all of that, I'll restate and state the obvious...

"America tends to be pretty overmedicated."

If you examine the general causes of the "over" part of "overmedicated" and took away the R & D, marketing and bribing it took to get Americans to their overmedicated states, just how big would these pharmaceutical companies actually be Mr. Sullivan?

Once again, this pompous ass is blinded by the right.

When is this guy going to wake the fuck up? Ever?
Every time I hear this guy he is either taking one small step forward or ten giant ones back.

Posted by: 60th Street on June 26, 2007 at 5:36 PM | PERMALINK

Any implementation of state-controlled medical insurance and care, without the option to buy your own private care, is a major surrender of individual autonomy and an ominous advancement of state power.

Posted by: Leninsky on June 26, 2007 at 4:17 PM

Just to remind people yet again: whenever right wingers tell you that providing universal health care is the same as banning private health care, they're lying and they know it.

Take the Hellmouth of Communist Socialized Medicine (by which I mean Stalinist Soviet England) for example. They have the National Health Service, and they also have a small and prosperous private sector. It's prosperous because there's a market for combining health care with lifestyle and leisure. It's small because hardly anyone in the population cares about that once they've got their actual health care needs addressed.

I'm told there are countries that worry enough about the corrosive effect of a two-tier public/private health care system to restrict the private side. I hear Canada is one such. But America doesn't have to be: Britain isn't, after all.

Posted by: derek on June 26, 2007 at 5:39 PM | PERMALINK

Simple answers, simple questions.

"but where does Andrew Sullivan get this kind of stuff from?"

http://en.wikipedia.org/wiki/Andrew_Sullivan#Controversies


"Sullivan's journalistic ethics were called into question when he announced that he would be accepting a sponsorship to write his blog The Daily Dish from the Pharmaceutical Research and Manufacturers of America, the lobby for the industry that he credited with saving his life"

Posted by: J on June 26, 2007 at 6:14 PM | PERMALINK

We often talk about the U.S. healthcare system as if the only problems is coverage of the uninsured. But there is ample evidence to indicate that even the well-insured to not get care that is consistent with the most up-to-date treatment recommendations. Much of the money spent on healthcare is spent inappropriately and could be allocated more effectively if someone whose interests were other than financial (i.e., an agency that is responsible not only for profit but also for human welfare) played an important role in determining what treatments should be.

Those of us who have insurance can choose our doctors, and we may have good relationships with them. But we shouldn't assume that we are getting the most appropriate treatments for whatever ails us.

Posted by: THS on June 26, 2007 at 6:19 PM | PERMALINK

We already have government payment for most healthcare for a significant segment of our population through Medicare. Although I'm sure that the system has its problems, most people get adequate care or at least care that is as good as the care that others get through private or employer-paid health insurance. And care is delivered much more efficiently under Medicare. The administrative costs of Medicare are, I believe, something like 3% of expenditures. Under other programs, those costs are, I believe, in the neighborhood of 15-20% of expenditures.

Is there a reason that this advantage couldn't be extended to the rest of the population.

Posted by: THS on June 26, 2007 at 6:26 PM | PERMALINK

Any implementation of state-controlled medical insurance and care, without the option to buy your own private care, is a major surrender of individual autonomy and an ominous advancement of state power.

I actually haven't heard such a system being suggested. Even in Britain, we can choose to pay for private insurance and private healthcare.

But, frankly, I don't need to pay for private medicine when I can get perfectly good care free at the point of delivery.

Posted by: Avedon on June 26, 2007 at 6:38 PM | PERMALINK

An awful lot of pharmaceutical research goes on in the universities here in the U.S., many of them publicly funded.

Posted by: El Cid on June 26, 2007 at 6:43 PM | PERMALINK

Here is my liberal Oncologist's wife's response to this:

Sounds nice--but inaccurate. IN fact---America really does support (financially)the entire worlds drug development. Let me explain.

Lets say a drug cost 10million dollars to develop then 3million dollars yearly to produce. For the drug to be worth making for a pharmaceutical company (under the rules of capitalizm--which all industries operate)--they'll want to make close to 13million over the first one to 2years of producing a drug then 3million annually--JUST TO BREAK EVEN.

As Europe has price controls--Pharma can't financially justify bringing new drugs to market--if they are only bringing the drug to europe(they won't even recoup cost, never mind make a profit) So to bring a drug to Europe they have to balance the loss there with a gain
made somewhere else--hence the USA. In other words--to make selling a drug possible in Europe--they have to increase the price where there is no resrictions on doing so (the USA) Or in mathmatical terms--to get their 3million dollars a year--if Europe price caps at
100,000--the USA gets to foot the bill for the
2,800,000.

If Europe would just allow fairer pricing (say
increase their contribution to 1million) then the
price of drugs should decrease in the United States(although I have to admit--the other possiblity is that Pharma would just pocket the difference)

Now--Europe of course has no advantage to paying
higher (after all right now they are getting something for practically nothing--so why pay)

2) While it is true that many pharamaceutical
companies are European--what he is blindly
ignoring--is that they too make all their profit in the United States--and on top of it pay no coporate taxes in the US--so how exactly is this a good thing.

3) Yes clinical trial are moving to Europe--but not because they are somehow "more innovative". American companies are also moving their trials to Europe, because the cost and regulatory burden of doing trials in the USA is absolutely insane. At NYU--we lose money on every single trial we run--you can't operate a business like that and expect to keep your lights on--so therefore with we limit the number of clinical trial we participate in and hope for philantropy to
make up this difference. THis has gotten worse under the BUSH whitehouse because they essentially defunded the NIH--so what in the world is this guy talking about re: the great white hope-- the NIH.

Overall--it seems to me he hasn't done his homework very well.

Of course Andrew Sullivan also didn't do his homework either. For one, I can name several important drugs that were developed in Europe--they just all only happen to make profit on the US market. Novartis, Sanofi, Bayer are just three of the very successful European pharm companies--so he's wrong on that count
too.

He almost make a correct point in his last
sentence--but then loses it. The real question is if the USA curtails spending on Drugs(socialize
medicine)--is the government willing to pick up the slack in money---with the slash and burn occuring at the NIH--that does not appear likely.

I don't know what the answer is--but writers like
these don't help--they just confuse things by their misinformation.

Posted by: Hawthorne Wingnut on June 26, 2007 at 7:10 PM | PERMALINK

Sullivan compounds his ignorance with false statements about europe/australia/canada (basically the rest of the world) regulating drug costs. This is incorrect, or rather the drug company gets a fair price and the end user cost is what is regulated.

The australian government negotiates the price of pharmacueticals with the drug companies as a single purchaser, paying fair market rates but with the power of a single desk buyer behind the negotiations. They then heavily subsidise the cost of the drug for the end user citizen.

My family recently required a certain drug that cost $1,200 a month (ticket price labelled on the packet). Cost to us at the pharmacy: $25. The rest of the cost is picked up by the universal taxpayer system.

The drug companies aren't all that out of pocket due to our terrible communist medical system at all, Sullivan as usual is full of hot air.

Posted by: Tadlette on June 26, 2007 at 7:27 PM | PERMALINK

Hawthorne Wingnut; "Here is my liberal Oncologist's wife's response to this"

I think your wife lied to you. She's not a liberal, she's not an economist, she's a proctologist and you are just her favorite asshole. Maybe she's not even a woman. Get up off your knees and check.

Posted by: Melville Liberal on June 26, 2007 at 8:36 PM | PERMALINK

Good point THS. Maybe we should ask old people if they would rather give up their evil government Socialist Medicare in favor of private insurance so they can regain individual autonomy and blunt the ominous advancement of state power. After all, unlike people in France, Canada, etc. (all of whom laugh at the idea of swapping their system for ours), they have lived under both.

Posted by: Joshua on June 26, 2007 at 8:38 PM | PERMALINK

One of the greatest savings in medical costs (worth billions and billions of $) in recent years came about from the work of two humble Australian 'socialist-hospital' doctors, Robin Warren and Barry Marshall, who discovered the cure for stomach ulcers.

Not only was money saved by the fact that the disease could be cured, but it could be cured by ordinary, off-the-shelf, cheap, non-patent antibiotics.

Their discovery occured in the mid 1980s, and the won the Nobel Prize for medicine in 2005. Thiers' is an incredible story of courage and persistence.

Far from hailing the discovery, American drug giants made these brave doctor's lives hell for nearly twenty years, lying and falsifying "research", discrediting and attacking these fine, principled men at every turn, trying to preserve their precious income stream. When it came to a choice between the health of Americans, and their profits, the mighty American "health" industry showed its true colors.

Warren and Marshall and all the other dedicated people, all around the world, who work to improve the health of their patients, whatever the personal cost are heroes who prevail despite the effforts of American Corporate Greed, not because of it.
.

Posted by: TelltaleHeart on June 26, 2007 at 10:04 PM | PERMALINK

Not that we're European, but Gardasil (HPV vaccine) is Australian.

Posted by: BrettC on June 26, 2007 at 11:25 PM | PERMALINK

TW Andrews on June 26, 2007 at 3:21 PM

Drug companies develop CURES?? Since when? Cancer drugs and vaccinations cure. They are not doing vaccination (bird flu)research as much because of the poor profit margin. The one drug that is still effective against methicillin resistant staph aureus (MRSA) is Vancomycin - developed in the '50s.

Drug companies are not that interested in cures. Infections have to be cured but they come back often enough Big Pharma can make plenty of money anyway.

I've been an RN for 30 years. Critical Care, Home Care and Case management - which involves working with the insurance provider. This preoccupation with the drug companies as why we should or should not pursue some form of Universal Health Care is beyond bizarre. It is ignorance of astronomical proportions.

There are many different payor systems in US health care

Medicare
Medicaid
VA
Private insurance
Military
PHS
Workers Comp
Charity
Self pay

People with end stage renal disease on dialysis have a separate payor system, there is one for the postal workers (really lousy), people who were exposed to nuclear materials at work (mostly bomb manufacturing and energy companies), there is a railroad union health ins separate from Medicare and the private sector, and undoubtedly at least one that I have forgotten.

This becomes a nightmare for billing. The last figure I remember as hospital billing costs for this is 20%. This is on top of what someone mentioned above: Medicare has a 3% administrative fee, private insurance runs into the 20s. When Congress tried to privatize Medicare by giving the amount of money for any individual to insurance companies, they came back to Congress later insisting that it wasn't enough. And they got bailed out - hundreds of millions of dollars that the people who had stayed with Medicare did not get. In Colorado, several of the companies simply dropped their Medicare patients. It was a nightmare. Many of those people then had to find a new physician to take on their care. Problem being that for the physicians to maintain their practices here, they can only take a certain number of Medicare patients because the reimbursements are too low. (The private insurers were at least partially correct). So people with chronic illnesses that are controlled by drugs for as long as they live, were finding themselves without a physician to handle exacerbations or even routine reordering of prescriptions - which caused some to have exacerbations when they had run out of medicine.

It has been pointed out often recently that the VA is socialized medicine. It actually had a pretty good track record when people who don't believe in government are not running it. Most of the problems are the same as occur in private insurance: trying to keep costs down by limiting access.

To my knowledge, the vast majority of proponents for universal health insurance simply want a single payor system. That is what Medicare is. You choose your doctor, your hospital, etc. They submit the bill. There will always be some providers (or patients) who attempt to defraud whoever pays the bills - the Gov, private insurance, charities, etc. Whoever pays them has to have systems in place to detect fraud. They can be a nuisance and worse. Mas nicht whether it is government or business trying to keep the illegitimate from being parasites, they inevitably deny care or coverage to some who are genuine.

Private, pay out of your own deep pockets, health care will not become illegal. I certainly want to distinguish between legitimate plastic surgery (burn victims, cleft palate, etc) and vanity care.

A universal health plan should NOT be attached to emploment. This is a ridiculous expense for business and creates many problems for the insured. Can they take a job they want if it means they have to get all new doctors? At one point it was estimated - by insurance companies - that 19 million American workers were stuck in a job because of an illness or treatment by one or more specialists and providers that would be a nightmare to change. Been there myself. Also had the wonderful experience that the company had changed providers, so now you have to go find a new doctor, dentist, drug store, etc. because the contract had been changed.

We can surely figure out something on this issue. Illness and disabling chronic health issues cost business plenty in lost time and productivity. We spend more on our military budget - which is more than almost all other countries COMBINED- than we spend on everything else. That would be EVERYTHING else the Federal government pays for. Pharmaceutical research, illness research, stem cell research, student loans for doctors, nurses, etc. would be a small part of the everything.

We have 725 + overseas military bases. 12 aircraft carriers - which no other country has the equivalent of even one. It goes on. For the premium price we pay, far more per capita than any other country, our ranking in quality of care statistics simply prove that our expensive system is not delivering.

Probably because too much of it is based on drugs.

Posted by: Ginny in CO on June 26, 2007 at 11:26 PM | PERMALINK

TW Andrews on June 26, 2007 at 3:21 PM

Drug companies develop CURES?? Since when? Cancer drugs and vaccinations cure. They are not doing vaccination (bird flu)research as much because of the poor profit margin. The one drug that is still effective against methicillin resistant staph aureus (MRSA) is Vancomycin - developed in the '50s.

Drug companies are not that interested in cures. Infections have to be cured but they come back often enough Big Pharma can make plenty of money anyway.

I've been an RN for 30 years. Critical Care, Home Care and Case management - which involves working with the insurance provider. This preoccupation with the drug companies as why we should or should not pursue some form of Universal Health Care is beyond bizarre. It is ignorance of astronomical proportions.

There are many different payor systems in US health care

Medicare
Medicaid
VA
Private insurance
Military
PHS
Workers Comp
Charity
Self pay

People with end stage renal disease on dialysis have a separate payor system, there is one for the postal workers (really lousy), people who were exposed to nuclear materials at work (mostly bomb manufacturing and energy companies), there is a railroad union health ins separate from Medicare and the private sector, and undoubtedly at least one that I have forgotten.

This becomes a nightmare for billing. The last figure I remember as hospital billing costs for this is 20%. This is on top of what someone mentioned above: Medicare has a 3% administrative fee, private insurance runs into the 20s. When Congress tried to privatize Medicare by giving the amount of money for any individual to insurance companies, they came back to Congress later insisting that it wasn't enough. And they got bailed out - hundreds of millions of dollars that the people who had stayed with Medicare did not get. In Colorado, several of the companies simply dropped their Medicare patients. It was a nightmare. Many of those people then had to find a new physician to take on their care. Problem being that for the physicians to maintain their practices here, they can only take a certain number of Medicare patients because the reimbursements are too low. (The private insurers were at least partially correct). So people with chronic illnesses that are controlled by drugs for as long as they live, were finding themselves without a physician to handle exacerbations or even routine reordering of prescriptions - which caused some to have exacerbations when they had run out of medicine.

It has been pointed out often recently that the VA is socialized medicine. It actually had a pretty good track record when people who don't believe in government are not running it. Most of the problems are the same as occur in private insurance: trying to keep costs down by limiting access.

To my knowledge, the vast majority of proponents for universal health insurance simply want a single payor system. That is what Medicare is. You choose your doctor, your hospital, etc. They submit the bill. There will always be some providers (or patients) who attempt to defraud whoever pays the bills - the Gov, private insurance, charities, etc. Whoever pays them has to have systems in place to detect fraud. They can be a nuisance and worse. Mas nicht whether it is government or business trying to keep the illegitimate from being parasites, they inevitably deny care or coverage to some who are genuine.

Private, pay out of your own deep pockets, health care will not become illegal. I certainly want to distinguish between legitimate plastic surgery (burn victims, cleft palate, etc) and vanity care.

A universal health plan should NOT be attached to emploment. This is a ridiculous expense for business and creates many problems for the insured. Can they take a job they want if it means they have to get all new doctors? At one point it was estimated - by insurance companies - that 19 million American workers were stuck in a job because of an illness or treatment by one or more specialists and providers that would be a nightmare to change. Been there myself. Also had the wonderful experience that the company had changed providers, so now you have to go find a new doctor, dentist, drug store, etc. because the contract had been changed.

We can surely figure out something on this issue. Illness and disabling chronic health issues cost business plenty in lost time and productivity. We spend more on our military budget - which is more than almost all other countries COMBINED- than we spend on everything else. That would be EVERYTHING else the Federal government pays for. Pharmaceutical research, illness research, stem cell research, student loans for doctors, nurses, etc. would be a small part of the everything.

We have 725 + overseas military bases. 12 aircraft carriers - which no other country has the equivalent of even one. It goes on. For the premium price we pay, far more per capita than any other country, our ranking in quality of care statistics simply prove that our expensive system is not delivering.

Probably because too much of it is based on drugs.

Posted by: Ginny in CO on June 26, 2007 at 11:29 PM | PERMALINK

I took a "history of property rights" class in law school taught by one of the few Economic Historians to ever win a nobel prize.

In that class they taught the historical rate of return, termed as 'rents' was 4% on an investment.

4% return is all it takes to attract capital and human resources to attempt something.

Then there is this thing called 'monopoly rents' which is super returns for having a monopoly on something. Those 'rents' are given to inventors for a short period to encourage more investment in invention.

That's more than enough to funnel trillions of dollars globally into research and development.

But somehow that's not enough for American Pharmaceuticals. They get an ultra-super-monopoly-rent. Not only do they get a patent but they also get 'controled substance' designation that allows them to charge 'ultra-super-monopoly-rent' type prices for ordinary drugs.

Case in point see the allergy drugs. Over the counter you could always buy benedryl for a few bucks. But Benedryl is a power drug with powerful side affects, it's also marketed as a sleeping pill. I have terrible allergies an I only take this drug under extreme conditions because it leaves me in a fog all day.

Meanwhile the pharmaceuticals developed a new breed of allegry drugs that include: claritan, allegra, and zyrtec and now more recently clarinex. These drugs were all less effective at fighting allergies then benedryl but they are prefered because their side effects are almost nil.

In fact a drug researcher told me that claritins effectiveness was running neck and neck with placebos.

These drugs are far less dangerous than benedryl yet nevertheless they are designated 'controlled substances' which means it cost you $2 a pill (roughly the cost of a box of benedryl).

But wait - the patent on claritin went off, and low and behold, it lost it's 'controled substances' designation. You can now buy the generic at Wallmart at roughly $2 for a box of 30.

Claritin was the first of these breed of drugs, and so it was the weakest. Allegra and Zyrtec were all better. So the makers of Claritin rolled out a new drug with slightly better formulary called clarinex. Clarinex was, of course, a 'controlled substance' drug.

Its as if the makers of Claritin could control the food and drug administrations designation of its drug. Once it lost it's patent, it didn't want generic manufacturers making 'controled substance' rents on its formulary. By forcing it into an over the counter market the product is so cheap it's almost free. Meanwhile they continue to get uber-super-monopoly rents with clarinex.

So Andrew Sullivan, and his corporate pharma friends, say is that they will not make drugs for the normal rate of retunn. They will not make drugs for the normal rate of monopoly rents. They will only make drugs for uber-super-monopoly-rents afforded controled substances where doctors prescribe but insurance companies pay.

The rest of the world calls those companies bluff.

They say, you know what, the rest of the world's economy is glad to make normal 4% rents on its investment, we think you'll still make drugs at mere monopoly rents.

And you know what they do.

Sullivan doesn't know what the fuck he's talking about on most issues. He's kind of a gay Jonah Goldberg.

Posted by: Bub on June 26, 2007 at 11:42 PM | PERMALINK

Sullivan doesn't know what the fuck he's talking about on most issues. He's kind of a gay Jonah Goldberg.

I've always thought of Jonah Goldberg as the gay Andrew Sullivan.

Posted by: Disputo on June 27, 2007 at 6:09 AM | PERMALINK

With Andrew Sullivan, idology always trumps fact, and his personal prejudices are his talisman.

Posted by: fjschmi on June 27, 2007 at 8:07 AM | PERMALINK

but Glaxo's CEO actually keeps his office in Philadelphia.

And he's French. As someone pointed out, Viagra was developed by a US company (Pfizer)'s UK R&D operation. Conclusion: Pharma is pretty thoroughly globalised, so it's not going to make much difference. If you're worried about innovation, well, you could use the cash saved by bulk purchasing to boost the Federal research funding budget, right?

Anecdotal evidence: NMR imaging, to take a hardware rather than drug example, was invented by doctors and engineers who worked in the NHS. One of them took away a Nobel Prize.

The biggest manufacturer of scanners is GE. So what happened? Quite simply, the (private sector) British electronics industry in the 70s didn't want to take the risk of turning the science that the public-sector researchers had done into a product.

To put it quite simply, the innovation will happen where there are smart people, money, and management that is a) willing to take a risk and b) willing to get out of the way. It has little to do with the structure of the US healthcare economy. Nokia doesn't appear to have suffered from being based in (tiny, social democratic going on socialist) Finland.

Posted by: Alex on June 27, 2007 at 8:41 AM | PERMALINK

>Lots of federal, state, and private money goes to stem cell research. State and private money go into embryonic stem cell research. A small amount of federal money finances embryonic stem cell research as well, but only on already-established cell lines.

Matthew,
Thank you for the clarification.

In post-posting regret, I thought I was a little too quick and broad in my generalization.
As I understand it, stem Cell research is hobbled badly tho' by the restriction on federal money to only established cell lines.
That is what I should have typed.

Posted by: bartkid on June 27, 2007 at 9:42 AM | PERMALINK

The three-year study, to be released today, looked at the medical histories of several thousand workers with a diagnosis of rheumatoid arthritis. The condition is a painful and incurable disease of the joints, but patients can keep it at bay by taking a special class of drugs.

The cost, as much as $18,000 a year, can be a big expense for employer health plans. Still, putting too much of the cost burden on the employee can evidently backfire.

Among the 17 employers in the study, conducted by the nonprofit Integrated Benefits Institute, more than half the workers with rheumatoid arthritis were not taking their drugs — in many cases because they considered the out-of-pocket co-payments too high.

Posted by: Brojo on June 27, 2007 at 11:34 AM | PERMALINK

After reading through all these fine comments one can't help but notice that absolutely no one knows what drug companies actually spend on developing a drug, be it successful or not. Nor does anyone knows the ratio of successful to unsuccessful ones. Yet we keep on handing out long term patents and creating monopolies for them.

We are flying a very expensive airplane totally blind.

I think that if a drug company wants the protection of its product through our patent system it should have to open its books to our scrutiny. Before we issue patents and create monopolies, in direct contravention to our free market ideals, we should have the pleasure of knowing the truth about what goes on inside the companies that are applying for the favored treatments. Fair enough? I think so.

If they don't want to open their books, then they don't get the patents.

Enough with flying blind.

Ed D.

Posted by: Ed D. on June 27, 2007 at 4:24 PM | PERMALINK

Hi, I'm a wingnut and I want to give more tax money to Big Pharma so they can advertise which drugs they would like us to bye. kthxbye.

Posted by: JT on June 27, 2007 at 5:44 PM | PERMALINK

I would not be too hard on Sullivan. Some years ago he wrote that his HIV drugs are provided to him free by the drug companies.

Presumably the companies do this for the PR value they get out of Sullivan's advocacy.

Were he to change his tune on this issue, he would lose access to his AIDs drugs, and he'd either have to go back to England, or die here.

Posted by: Nancy Irving on June 28, 2007 at 7:18 AM | PERMALINK




 

 

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