- The Washington Times - Thursday, August 29, 2002

Science is now producing miracle drugs that are saving lives, and dramatically improving the lives of those suffering from debilitating diseases. Given the advances of modern biomedical research, these developments will just accelerate, producing a revolution in the effectiveness of modern medicine.

At some point in the near future, your very own life, or the life of a parent or child, may be saved by one of these cutting-edge miracle drugs.

These miracle drugs are being developed and produced by America's private pharmaceutical industry. Last year alone, the industry invested an eye-popping $30.3 billion in drug research and development.

Among the panoply of new drugs under development, an experimental vaccine may be able to boost levels of HDL, the good cholesterol, by blocking its transition to LDL, the bad cholesterol that ultimately causes heart attacks and strokes. A newly developing gene therapy would prompt the body to grow new blood vessels to bypass blocked arteries without surgery. Other drugs would revolutionize therapies for cancer, asthma, diabetes, Alzheimer's, and other devastating diseases

No one else will be able to do this nearly as well certainly not the U.S. government, or the socialized medicine systems of other Western countries.

But this private American industry of miracle-makers and lifesavers is now under assault from all directions. Many people apparently want the miracle medicines without paying for them, or paying nearly enough to keep them coming.

Charlatans are rushing forward to posture themselves on a high moral pedestal as the champions of the poor, the sick, and the needy in attacking the pharmaceuticals. But all these self-appointed saviors have never produced one drug or medicine that has ever benefited anyone.

This has been reflected in the still pending congressional debate over a Medicare prescription drug plan. The Senate bill would allow unrestricted importation of American-made drugs from Canada, purchased under Canada's price controls. Moreover, even in the U.S., Medicare reimbursement under the pending plans would fall far short of market prices.

Such provisions would drastically reduce the revenue flow to the pharmaceuticals. That would in effect sharply slash the nation's true budget for research and development of miracle drugs.

Solid profits on the drugs that work are necessary for a time to make the whole process of modern biomedical drug development viable. The research and development is highly expensive, an average of $800 million for each new drug, and the investment in it is very long term, for it takes well more than 10 years for a successful research effort to start making any money.

Then there are all the research and development dead ends that were necessary for the science to advance and learn what works, which entail great costs with no return. About 80 percent of newly developing drugs actually fail to pan out. The profits for the successful drugs must ultimately cover these costs as well for the system to be economically functional over the long run.

If investors are stopped from getting these reasonable returns, then the investment money for modern, cutting edge, biomedical cures will dry up. That means you and I and our families will not have the drugs available in the future that could have saved our lives, or rescued them from some highly disabling disease.

Unfortunately, even some in industry are now piling on. A coalition of 13 major companies, including such household names as General Motors, Kodak and Motorola, has joined with 11 governors to form Business for Affordable Medicines (BAM).

The purpose of BAM is to assault the patent and intellectual property rights of pharmaceuticals, in a misguided attempt to reduce costs for employer health plans. One of their proposals, included in the Senate prescription drug plan, would allow the marketing of falsely labeled generic drugs.

Generic drugs are knock-offs of the original patented drug. They are produced by manufacturers who did not bear the research and development costs of the original drug and so do not have to recover those costs.

The generic manufacturers generally do not have the exact formula for the original patented drug. But they can learn enough from examining it and its effects in the market to produce a drug identical in scientific effect to the original drug.

The Senate bill, however, would allow generics to be marketed which do not have the same scientific effect as the original. The generic can claim to be the same drug as long as "no significant differences in therapeutic effect are expected."

This misleads consumers. It will also undermine their health. The market pressures for cheaper and cheaper generic alternatives will lead to generics that are less and less effective than the original.

The legislation undermines the patent and intellectual property rights of the pharmaceuticals in many other ways as well. All the politicians and corporate interests like BAM assaulting the pharmaceuticals today are a threat to the public health, and to the personal health of you and your family.


Peter Ferrara is director of the International Center for Law and Economics in D.C.

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