- The Washington Times - Thursday, October 20, 2005

Many people believe in the world as it ought to be. We all ought to be millionaires. We all ought to have top-paying jobs. We all ought to own a Rolls Royce.

To make that world happen they turn to politicians. If you don’t want to pay what something costs, get the government to take the money from someone else.

Washington long has been known as the city of the world as it ought to be. Now the D.C. Council is following in Congress’ footsteps. Prescription drugs provide great benefits. They ought to be free, or almost so.

Never mind that companies raise money in the capital markets, build expensive laboratories, hire knowledgeable scientists and invest billions to find elusive medical cures. Medicines cost too much and D.C. legislators — who, unlike the drugmakers, produce nothing worthwhile — will take charge.

Months ago, D.C. Council member David Catania came up with a weird scheme to seize drug patents, apparently forgetting that the U.S. Constitution requires payment of compensation. So much for that attempt at grand larceny.

He then regrouped, drafting new legislation, passed last week, to ban the sale of pharmaceuticals at an “excessive price,” defined as 30 percent above the cost in Australia, Britain, Canada or Germany. It’s surprising that he didn’t toss in Congo, Laos and Mexico.

Mr. Catania conveniently chose as his standard countries that impose price controls. He apparently expects investors to continue providing funds and companies to continue risking those funds when irresponsible election-minded politicians decide what “fair” prices are.

The bill would impose civil penalties on any company that didn’t give away its wares. But Mr. Catania recognizes that the drugmakers aren’t likely to surrender. He complains: “The pharmaceutical industry, just like the tobacco industry, rather than obey the law, will file lawsuits.”

Alas, Mr. Catania, once one of the council’s more sober-minded members, exhibits an ugly demagogic impulse. Cigarette companies make a product that kills people. Pharmaceutical companies make a product that saves people. Surely he can tell the difference.

Let’s be clear. People with heart conditions are alive today because of the drugmakers. People with AIDS are living normal lives because of Big Pharma.

People with cancer are being cured because of pharmaceutical firms. People with a range of ailments, big and small, are surviving and thriving because a profit-making industry is investing tens of billions of dollars annually in medical research. But companies do so in expectation that they will be able to recoup that investment.

Mr. Catania thinks that is unreasonable. Apparently it’s OK to pay for quality hospitals and practiced surgeons. But why spend money on drugs?

Surely those little pills aren’t worth much. So what if Taxol or Gleevec can stop deadly cancer in its tracks? Who cares if scores of anti-retrovirals have emerged to hold back HIV/AIDS? The politicians on the D.C. Council believe that drugs should be cheap.

Unfortunately, the price for every pharmaceutical on the market has to cover the cost of research as well as production. And not just the research on the successful pills but also on the far more numerous failures.

Medical R&D is filled with misses, empties and almosts. On average, companies have to review between 5,000 and 10,000 substances for every drug on the market. Passing unsound but vote-winning bills is a far easier process.

The fact that Australia, Canada and Europe leech off of American R&D by imposing price controls on U.S. drugs sold in their markets doesn’t excuse the D.C. Council trying to do the same. Unfortunately, importing foreign-controlled prices will discourage any rational company from investing more.

Mr. Catania’s constituents might get more cheap drugs today, but they will have fewer effective drugs tomorrow. If the United States imposes price controls, there will be no market upon which anyone anywhere can leech.

If the District moves ahead, the drugmakers should adopt a simple policy: no drugs sold in the District. If people want high-quality medical products and services, they must pay for them. If they won’t pay for them, they need to look elsewhere for health care. Maybe Mr. Catania and his colleagues can start making medicine for the sick.

What is most disappointing about Mr. Catania’s misguided campaign for a free lunch is not that he’s trying to win votes with a demagogic attack on an industry that provides medical miracles for his constituents. It is that his constituents apparently believe they can get something for nothing.

Yes, the world as it ought to be is a wonderful place. But it doesn’t exist. As Mr. Catania and his constituents will quickly discover if the Mayor Tony Williams signs this foolish bill into law.

Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Reagan.

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