Many bloggers and journalists following the healthcare debate the past year have neglected to credit one of President Obama’s most significant coups. He actually got Big Pharmaceuticals® to support Obamacare. The pharmaceutical interest group went along with the biggest imperialistic surjection of the dominant state into the healthcare market since Lyndon Johnson was in office in return for a favor. They wanted to make sure drug reimportation would not take place in a Barack Obama Presidency.
They now can change the name of their interest group from PhRMA to Sucker. The pharmaceutical industry agreed to eat $80Bn in costs and run advertisements in favor of Barack Obama’s healthcare positions in return for the guarantee not to reimport drugs and undercut the current prescription drug pricing structure.
The House has passed a healthcare bill. The Senate got one through as well. They will reconcile the ghastly things in a Star Chamber- miles from legitimate public scrutiny. Now, about that promise The One made to PhRMA…
Imagine the drug makers’ surprise, then, when almost immediately after the Senate passed its reform administration spokesmen said that importing cheap “foreign” drugs was back on the president’s agenda. This despite the fact that Ms. Hamburg wrote to the Senate asserting that her agency continued to strongly oppose importing drugs, a position that is in line with positions held by every prior FDA head. The drug executives, far from getting a seat at the negotiating table were made into an entrée on the menu.
(HT: Wall Street Journal).
This should surprise no one with common sense. Barack Obama has always favored drug reimportation. He voted for it in the US Senate. As for the value of his word, just ask Canadian negotiators who sat down with Austin Goolesby. I’d sooner trust my daughter on a date with Peter Orszag than take Barack Obama at his word on the weather.
Thus I feel a paucity of sympathy as PhRMA now twists in the wind below…
As a senator, Mr. Obama was an outspoken supporter of drug importation and remained so on the presidential campaign trail. Only when cajoling the drug industry into signing on to his reform did he suddenly turn away from that position. Now, however, he is reverting to his original position by separating importation from the actual reform bill.
On the issue of reimportation itself, I find myself begrudgingly agreeing with PhRMA. The reimpoted drugs undercut the ability of researchers to recoup costs implicit with the fifteen year product development cycle that makes American drugs the safest on the planet. The downside to this condign regulatory scrutiny is that only 30% of the prescription drugs brought to market are profitable. Thus, for every Cialis, there are at least two engorgements that don’t exactly last four hours.
Then again, all this regulatory testing and evaluation is done for a valid reason. Testing helps society manage risk and trust what the doctor prescribes for what ails us. The risk reduction value offers positive externalities throughout the American economy. I’d hate to think what my health insurance would cost if the drugs at the local pharmacy had an actuarially significant chance of killing me independent of the disease they were prescribed for.
Yet, according to the FDA, this is what happens when drugs are reimported. Drs Wertheimer and Norris of the Temple School of Medicine predict that 10% of the drugs sold outside the FDA testing regimes are either fraudulent or accidentally substandard. Their paper “Mitigating a Macroeconomic Pandemic,” posits the distinct possibility that these substandard drugs could lead to significant medical travail independent of disease vectors. 10%, in a world where confidence interval half-widths are at ½% as a normal standard, would most definitely rate as actuarially significant.
Yet this is exactly what we can expect in a nation which elects the far left. Equality is more important than quality. Giving everybody equal access to poisonous drugs is more important than giving 90% of the population access to demonstrably safe and effective ones. The cost curve has just got to bend.
This is what we can expect as the outcome when we make Faustian bargains with the likes of Barack Obama. People so driven to achieve equality that they fire five science teachers from Berkeley High School because they serve too many white people will care far more about making drugs equally available than they will about whether the drugs actually cure the intended disease. America will one day no longer survive this mentality.