Response on Drug Patents
Response on Drug Patents-Becker.
Again, many more comments than I can possibly respond to. I will just make a few points.
Yes, drug companies spend a lot on marketing, but much of that is valuable to patients in terms of finding out about new drugs that might be helpful. What disturbs me more are the scary and exaggerated warnings that sometimes accompany these ads, presumably to protect against lawsuits in the present highly litigious legal environment.
Some of you were surprised that a free trader like myself would not be enthusiastic about re-importing from countries like Canada that keep prices low through price controls and bloc buying of drugs. But drug companies, as well as other companies, should have the right to have legal contracts enforced. And the contracts with Canadian health organizations that buy drugs presume that Canadians, not Americans, will use the drugs sold to them. Still, as I pointed out, and some of you reinforced by your comments, if such re-importation did occur on a large scale, the result would be fewer drugs sold to Canada and higher prices there. That would then induce the Canadian health service to crack down on re-importation to the USA, as they are already doing.
Many, but certainly not all, of the comments distrusted patients to know when drugs might help, and like the FDA�s requirements of efficacy. I oppose this requirement in my commentary because that greatly slows down the approval process, and can mean the difference between life and death for seriously sick individuals. I believe that the growth in access to the internet and other sources of information has made patients much better informed than they were when the efficacy standard was introduced in 1962. No doubt, consumers will make mistakes in the health area as well as in others, but I much prefer that very sick people control their own treatment rather than it being controlled by government officials.
Some of you like Michael Kramer�s proposal for prizes, and I agree it is worth greater examination. But I do believe that it would be politically difficult to implement efficiently, and probably is not a good idea.
Drug companies clearly cater to the larger and richer markets, so they work on diseases in advanced economies rather than those found in Africa and other poor nations, and work on more common diseases, not the rare ones. The Orphan Drug Act tries to encourage research on diseases that are less common. And a forthcoming study by Tomas Phillipson, Rodrigo Soares, and myself shows that poorer nations do benefit, with a lag, from medical advances in rich countries. Yet it could be important for some private philanthropic organizations-like the Gates Foundation- and perhaps international bodies to encourage research on diseases found among poor nations, and help pay for drugs that help these populations.
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