A Bipartisan Crack-Up That Will Delay Future Pharma Cures

A lot gets lost these days in the toxic fog that passes for “debate” in Washington.  Perhaps no subject proves this point like the “debate” over drug prices.

The statesmen of yesteryear — the Clays, Calhouns and Websters — who did our country the service of postponing civil war for years through deliberation and compromise have few heirs in Congress today.

Misinformation and false assumptions in the drug pricing debate have led liberals to embrace socialism and conservatives to forsake what should be conserved.  While America’s pharmaceutical industry will suffer dearly if politicians have their way, millions of patients hoping for cures for their diseases will surely be collateral damage.

A clear-eyed, sober look at important facts seems timely (if pols can look away from Twitter and TV cameras long enough to consider them).

First, step off the ledge.  Proposals that would destroy our patent system and one of the country’s major R&D-based innovative sectors carry grave risks.  Adopting any of them would undermine free enterprise elements of U.S. health care and speed single-payer health care’s takeover here.

Adopting government-run health system countries’ price controls through reference pricing will let foreign freeloaders win.  Federal bureaucrats dictating (by “negotiation” or contrived arbitration) the prices of medicines will dramatically reduce the discovery and development of new medicines.

End-running distribution controls through importation from Canada (or wherever purported pills actually originated) will jeopardize the lives and health of patients who take the possibly counterfeit or adulterated drugs.  Punitive 65-95 percent excise taxes on 250 patented, cutting-edge medicines’ gross sales will shut down much U.S. pharmaceutical innovation.

Siccing the Federal Trade Commission on inventors who improve their medicinal products will condemn American patients to the first version of a medicine as the only version.  In no other field will inventors face antitrust punishment for “product hopping” and “patent thicketing” — which in truth are merely inventors obtaining patents on related inventions (e.g., new materials, new processes) and continuing to improve the initial invention.

There’s a cost to such policies.  It includes reducing or delaying patients’ access to novel medicines.  Americans have access to 90 percent of new drugs, in contrast to socialized medicine nations: for instance, 64 percent in Germany, 46 percent in Canada, 59 percent in the United Kingdom and 50 percent in France.  Patients in developed countries with government-run health systems face 18-month delays before cancer medicines become available, compared to America.

Government-run systems ration care, putting budgetary concerns ahead of clinical or humanitarian concerns.  Thus, patients’ health suffers.  For instance, Americans with the most common lung cancer would have had half the survival rate gains between 2006 and 2017 had they faced the government restrictions on access to medicines several developed countries use.

The market is already addressing costly new therapies such as gene therapy, which is key to personalized medicine.  Value-based payment arrangements, basing payment on patients’ clinical outcomes, installment payments, subscriptions and other new models are rapidly taking shape.

A superior solution: Let our patent system spur innovation and increase competition.  The “patent bargain” does this exquisitely.  Innovators enjoy exclusivity over the newly created property of their inventions.  Competitors learn from the scientific and technological details of the patent and invent around the patented invention.

For example, in 2013, a new Hepatitis C drug, Sovaldi, came on market.  It’s a miracle drug; it cures the disease.

Sovaldi started at $84,000 for full treatment.  Within a few months, Harvoni upped the game by ending the need for combo drugs Sovaldi and others required.  It costed $94,500.

The high-priced drugs rapidly displaced existing Hepatitis C medicines.  Simply put, a cure beats treating symptoms.  The results have been compared to “the glory days of the vaccines that wiped out polio, measles, and chicken pox.”

Thanks to the new drug class led by Sovaldi and Harvoni, “In less than four years, the treatment of Hepatitis C [went] from failure rates as high as 70% to success rates as high as 99%.”  Meanwhile, the addition of four more patented Hepatitis C competitor cures curbed Sovaldi’s and Harvoni’s prices.

Already, Hepatitis C cure drugs have hopscotched, with a new medicine recently approved to treat all genetic variations of the disease.

This is just one of countless examples of inventions and how they improve the human condition, due to property rights-based patents.  And importantly, drug innovators contribute pretty nicely to the U.S. economy.

Platitudes and partisan one-upmanship don’t produce sound policy.  Unless Washington turns away from this “do something, foolish or otherwise” posture, the legislative or regulatory “cure” will certainly be much worse than the “disease.”