TCS Daily

The Politics of Drug Demonization

By Doug Bandow - March 11, 2004 12:00 AM

The Food and Drug Administration has approved the new drug Avastin, which shrinks tumors. The FDA pushed through the medicine, produced by Genetech, because Avastin significantly aided patients with advanced bowel cancer. Yet in the view of many Americans, not to mention politicians of both parties, the pharmaceutical companies -- which are spending billions on research to produce medicines like Avastin -- are the enemy.

George W. Bush is in the pay of the usual corporate interests, including the drugmakers, charges presumptive
Democratic presidential nominee Sen. John Kerry (D-MA). The latter naturally favors reimportation of medicine from Canada, effectively imposing that nation's price control system on America. After all, drugs should be cheaper, no matter what they cost to develop and produce.

Other Democrats routinely engage in similar demagoguery. For instance, charged Rep. Sherrod Brown (D-Ohio), the Bush administration "squandered" the admittedly bloated Medicare drug benefit, opposed by principled conservatives, on "astronomical drug industry profits."

Even the Vatican has joined in know-nothing drug industry bashing. The firms demonstrated a "lack of social conscience" by making massive profits on AIDS drugs, charged Father Angelo D'Agostino, a Jesuit priest. At a news conference held to promote Pope John II's Lenten message earlier this year, D'Agostino called the industry's desire for a profit a result of "genocidal action of the drug cartels who refuse to make the drugs affordable."

It's a bizarre charge given the fact that AIDS drugs exist only because of a host of profit-making companies that conduct drug research. In the early 1980s the disease was a death sentence, taking some 28 million people to their graves. Today millions of AIDS sufferers -- roughly one million suffer from HIV infection in the U.S. alone -- survive and even thrive because profit-making companies have developed scores of medicines.

Of course, the scourge is far from over: 42 million people suffer from the disease worldwide, and some 70 percent of them live in sub-Saharan Africa. But there is reason for hope since 83 different medicines are in development to combat AIDS; 15 of them are vaccines.

Alas, impoverished peoples in impoverished lands find it difficult to get such medicines. But pervasive poverty and state inefficiency, not Western drugmakers, are to blame.

Many AIDS drugs have never been patented in hard-hit African countries; in fact, virtually none of the 325 medications on the World Health Organization's Essential Drug list are under patent in Africa. Moreover, writing in the Journal of the American Medical Association, Amir Attaran of Harvard University's Kennedy School of Government and Lee Gillespie-White of the International Intellectual Property Institute concluded that "geographic patent coverage does not appear to correlate with antiretroviral treatment access in Africa, suggesting that patents and patent law are not a major barrier to treatment access."

Anyway, firms make virtually every compound available at a steep discount, often less than charged for generic knock-offs. Companies like Boehringer Ingelheim, Merck, and Pfizer donate some of their AIDS medicines and run treatment programs that reach tens of thousands of people.

Inadequate health care systems pose a far greater barrier to AIDS care. Observes Dr. J.W. Lee, Director-General of the WHO: "Today, we have medicines to treat AIDS patients for a dollar a day or less but these medicines are not getting to the people who need them." Thus, "investing in treatment for AIDS also means strengthening health systems."

Although targeted for their alleged greed and price-gouging in America, U.S. firms are leaders when it comes to corporate philanthropy. Most companies make free or low-cost medicine available to those in genuine need.

The number of Americans benefiting from such initiatives has risen from 1.5 million in 1998 to 5.5 million in 2002. As noted earlier, companies do much to help those afflicted with HIV infection overseas; the drugmakers undertake a variety of initiatives directed at malaria, tuberculosis, and other diseases as well.

Moreover, the companies give substantially to charity. A Chronicle of Philanthropy survey found that an astonishing third of business charitable contributions came from the big R&D drugmakers. Pharmaceutical companies landed the top four giving spots as well as another three in the top 50 contributors.

Unfortunately, attacks on the drug industry often come from comfortable people who don't mind paying for medical and hospital care. Hospital care consumes nearly a third of health care dollars. Doctors and clinical services get a fifth. A miscellany of everything from dental to over-the-counter drugs take another fifth.

Only 11 percent went to medicine in 2002. Yet many Americans expect to get high value drugs for free, or nearly so.

The message? Save my life, cure my cancer, clear my arteries, staunch my nausea, but do so for less than I spend on eating out every month. People who think drugs are expensive should consider the cost of not having drugs.

And there's no short-cut. Companies test between 5,000 and 10,000 compounds for every one that ends up approved for sale. Among the latter, seven of ten don't even pay for their own costs. The other three have to pay for everything, including the many dry holes.

Is it unseemly for companies to profit from making medicine? Without a profit incentive, American firms would not have spent $33 billion last year on R&D. They would not have discovered, developed, tested, and won FDA approval for 86 new medicines last year.

Particularly important are the 35 new biologics and molecular entities. Six address cancer, three target AIDS, and seven combat genetic disorders. Tetanus, diptheria, psoriasis, pneumonia, Alzheimer's, botulism, and hemophilia also were on the target list.

And progress continues. Avastin, approved by the FDA in February, promotes angiogenesis, which prevents the creation of new blood vessels necessary for tumors to grow.

The drug offered substantial benefits even for patients with advanced bowel cancer. "Seeing a survival advantage of this magnitude is unusual," explained the FDA's Dr. Patricia Keegan.

Avastin also is likely to be useful in treating breast, kidney, pancreatic, and lung cancer. Moreover, another 30 drugs
employing the same treatment technique are in development by such firms as Bayer, Novartis, and Pfizer. Surely these substances are worth paying for.

Bashing the drugmakers may win votes. But the price of such demagoguery will be high if fewer drugs are developed and fewer people are treated as a result. We need more, not fewer, drugs like Avastin.

Doug Bandow is a Senior Fellow at the Cato Institute and the author of The Politics of Plunder: Misgovernment in Washington.


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