March 5th, 2008
Time to regulate drug prices?
A new survey from the Kaiser Family Foundation, USA Today, and Harvard shows that most Americans now want drug prices regulated
This is their chief concern with the industry. Safety and advertising are less important.
The study’s summary (PDF) shows people are having a tougher time paying their drug bills, sometimes going without or cutting pills in half, and that this is a greater concern than the safety of drugs or their advertising.
Liberal analysts like Ezra Klein took one look at the charts and said, “regulate pharma.” Yes, they’re already regulated. But regulate prices is his message.
The most telling fact is that the industry’s messaging, that price regulation will cut innovation, is not impressing the public — half don’t care. And The Washington Monthly’s Kevin Drum notes even that objection can be met by regulation proponents.
Ironically this is coming to a boil just as two of the industry’s biggest hits, statins and anti-depressants, start coming off-patent. The market share gains of generic Prozac and generic Zocor have been frightening Wall Street away from the industry.
On the research side, a sort of Moore’s Second Law effect is being felt. Genetically-engineered drugs cost a lot more to develop, test, and get through regulators than older compounds.
Risks are high but so are rewards.
Genentech’s Avastin looks like a hit, with doctors using it for many more things than it’s licensed for. The industry might argue on behalf of compounds like that, but even then it’s got a bare-majority support.
A better way for Phrma to go might be to celebrate the success and price-efficiency of generics, noting that all patents expire, and thus prices will come down naturally.
How would you defend the industry? Or would you?
Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994. See his full profile and disclosure of his industry affiliations.
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| 03/05/08
