Sally Pipes of the Pacific Research Institute has an excellent op-ed at the Fox News website right now. It's about how wrongheaded the Very Stable Genius's approach to drug pricing is, and the implications for keeping America the most innovative nation in the world with regard to new life-saving pharmaceutical products.
President Trump announced Friday that he will proceed with his plans to peg the prices of certain drugs prescribed largely at doctors’ offices under Medicare Part B to the lower prices that other developed nations pay for those drugs. That may sound good at first glance, but in reality, the move will slow the development of new drugs, consigning countless patients to needless suffering and premature death.
The president said he's trying to secure the best deal for American patients. But his move will deprive drug companies of billions of dollars in revenue, making it impossible for them to spend the money they no longer earn to develop new drugs
As Stephen J. Ubl, president of the Pharmaceutical Research and Manufacturers of America, correctly pointed out in a statement after President Trump’s announcement: “It defies logic that the administration is blindly proceeding with a ‘most favored nation’ policy that gives foreign governments the upper hand in deciding the value of medicines in the United States. History proves that when governments take unilateral action to set prices, it disrupts patient access to treatments, discourages investment in new medicines and threatens jobs and economic growth.”
And while the VSG is ostensibly doing this to burnish his populist bona fides, his touchy ego is definitely a factor. He thinks Big Pharma deliberately dissed him:
President Trump appears to have an ulterior motive regarding his move against drug companies. He claims — without providing any evidence— that the drug manufacturers working on coronavirus vaccines deliberately withheld the good news of vaccine progress to harm his chances of reelection.
“Pfizer and others even decided to not assess the results of their vaccine, in other words not come out with a vaccine, until just after the election,” the president told reporters Friday at the White House. “That’s because of what I did with ‘favored nations’ and these other elements — instead of their original plan to assess the data in October. So they waited and waited and waited, and they thought they’d come out with it a few days after the election.”
Pfizer Chairman and CEO Albert Bourla has denied that the election had any impact on his company’s announcement of a promising coronavirus vaccine. In an Oct. 16 open letter he wrote that his company was “operating at the speed of science.”
Accusing drug companies of delaying a vaccine to protect us from a disease that has killed more than 254,000 Americans and infected more than 11.9 million is an extraordinarily serious charge, and denigrates the work of everyone involved in development of experimental coronavirus vaccines that we all hope will become available in December.
Pipes then gives a ringing defense of the free market that ought to be shouted from the rooftops:
This ecosystem is the reason the United States creates more drugs than the rest of the world. It's defined by two key features.
The first is strong protections for intellectual property. Without patents and other intellectual safeguards, it would be beyond irrational to invest the nearly $3 billion required, on average, to develop just one successful drug.
It’s important to understand that for every drug that successfully comes to market, many more prove to be unsafe or ineffective — meaning the drug companies can never sell these drugs and never recover their substantial research and development costs. But without conducting expensive research, it’s impossible to know which drugs will be safe and effective.
Robust intellectual property protections ensure that when a drug does make it to market competing firms can't steal a company's research and manufacture knock-off products with impunity.
The second feature is that the pharmaceutical sector is governed by market principles, for the most part. Unlike in many other developed countries, the U.S. government generally doesn't impose price controls on medicines. Drug firms have relative freedom to charge a price that the market will bear. So they have a better chance of recouping their substantial upfront research and development costs.
The relatively free market in the U.S. gives investors the confidence they need to take big risks funding a promising new cancer therapy, a potential Alzheimer's breakthrough, or, in the current case, a vaccine for COVID-19.
These basic components — property rights and free markets — are the two pillars of our capitalist system that has proven repeatedly to provide greater benefit to ordinary citizens than socialism or communism in countries around the world.
Preach it!
. . . a profit motive isn't incidental to America's superiority in drug innovation. It's an essential component — one that can't be abandoned without undermining progress towards much-needed treatments and cures.
Without the capitalist system that underpins America's drug industry, the world would have to wait much longer for the medical breakthroughs that will ultimately win the war against COVID-19 and help the millions of us stricken with other diseases every year.
This is what we need more of, not some attempt to keep Trumpism alive after its namesake standard-bearer's inevitable demise by saying that conservatism ought to abandon "free-market fundamentalism" and tailor itself to appeal to some notion of a "working class" that doesn't really clamor for protection.
The world is going to keep changing, as will the definition of "working class." What conservatism brings to the table is a set of eternal verities - like free-market principles - that serve societies well at any time.
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