TCS Daily


Saving Marcia Angell From Herself

By James Pinkerton - September 15, 2004 12:00 AM

Has capitalism got you down? Are you feeling oppressed? I've got the book for you: Marcia Angell's The Truth About the Drug Companies: How They Deceive Us and What to do About It. In less than 300 pages, Angell shows you how a wise and frugal government -- you know, like the one we have now -- can give us "better drugs at lower prices."

Yes, Dr. Angell's diagnosis -- she's an MD now lecturing at Harvard Medical School -- is heavy with factoids provided by various Naderite advocacy groups, all dedicated to the proposition that the Post Office is lean and mean compared to "Big Pharma." To Angell, the industry is "corrupted by easy profits and greed" and has "deceived and exploited the American people."

But whereas the Naderites argue that corporate chieftains are simply evil, Angell offers a deeper, more damning, analysis. She argues that it's the corporate system that's bad, not the people who work within it. As she observes, "Most pharmaceutical employees, even at the highest levels, accept their own public relations. They honestly believe they are part of an innovative industry whose prices are an accurate reflection of the value of its products and the costs of making them." Now, this isn't regulatory Naderism; this is structural Marxism, by way of the 20th century "Frankfurt School" -- those 20th century Marxists who fused Marx with Freud to explain how people could happily participate in the evil of capitalism. Herbert Marcuse et al. came up with elaborate theories of "alienation," "false consciousness" and "repressive tolerance," all of which sought to explain why a system so rotten could be so resilient.

Like the Frankfurters before her, Angell seems to believe that capitalism, its horrors notwithstanding, is too popular to be taken on directly. So instead, she declares herself to be Pharma's best friend. "Despite all its excesses, this is an important industry that should be saved -- mainly from itself." You believe that, right?

It was often said of the Keynesians -- and by the Keynesians of themselves -- that they were there to save capitalism from itself. Keynes saw capitalists as mostly fools, driven by "animal spirits." According his highbrow perspective, economic experts would have to step in from time to set the economy aright. That is, know-it-alls would manage the inevitable cycles of boom and bust, smoothing them out for the benefit of the herd.

But Angell's prescription for Pharma is not about temporary fiscal cycle-smoothing. The Harvard academic has in mind something much more ambitious. Her vision for the drug companies is a permanent government takeover. She laments, "The United States is the only developed nation that does not regulate drug prices." And while she praises statist health-care systems such as Canada's, she doesn't quite use the words, "price controls."

Still, her intentions are clear enough: "Drug prices should be not only transparent but reasonable and as uniform as possible for all purchasers." That's a good beginning to a price-controlled (PC) future. Elsewhere she argues, "The pharmaceutical industry should be regarded much as a public utility." Translation: price controls, by stealth.

Yet interestingly, even as she bemoans Pharma's lack of transparency, Angell has all the key numbers she needs to make her case. She asserts, for example, that industry deceitfully overstates its costs; its claim that the average new drug costs $802 million to bring to market is exaggerated, she says, by a factor of eight. And she declares that the Pharma companies spend just 14 percent of their revenues on R&D, compared to 31 percent on overhead. I can't assess the accuracy of those numbers, but the lesson of the last century is that when government gets involved, spending on overhead goes up -- way up -- not down. The "withering away of the state" is one of Marx's slogans that even Marxists don't say anymore.

Another word not much in evidence in the book is "value." That is, the cost of medicine is much discussed and denounced by the author, but consideration of the value of such medicine is little considered. What's it worth to you, or your loved ones, not to suffer sickness and pain?

Angell does have one answer to offer -- learn to live with sickness and pain. If you suffer from heartburn, for example, she advises you to scorn advertisements for relief; don't let any big company tell you that it's gastroesophageal reflux disease, which might be treated with medicine. Instead, just learn to live with "sour stomach." What could be cheaper than that?

Some might say that rising health care costs are mainly a function of demography -- a larger population, an aging population -- and the march of science. It's the steady progress of scientific understanding that has enabled drug companies to come up with more treatments to more ailments.

OK, that's one view. But the other view is that rising health care costs are a wonderful opportunity to get the government back in the political saddle. As Thomas Sowell observed a decade ago during the "Hillarycare" debate, "This isn't about health care. It's about power."

And if the subject is power over the economy, then one must look not to Keynes, but to a contemporary of Keynes'. Ludwig von Mises believed that the Left's planners and professors didn't merely want to "prime the pump" when necessary, a la the Keynesians. Instead, von Mises maintained, they wanted to control the pump -- and also the commanding heights of economy and society. In his 1944 book, Bureaucracy, the famous Austrian economist argued that big government was more than just quantitatively large; instead, it had mutated qualitatively. It was still bureaucratic, but in addition, it had become a religion, which he dubbed "Statolatry." This statist religion was the sum total of the "general will," "the proletariat," and, of course, the "public interest." Von Mises called it the "God State," and to him, for all its lofty Hegelian aspirations, it would always be the opposite of a workers' paradise. As he wrote wryly, those running this secular Godhead could wrap themselves in the Ideal, and given this exaltation of the state, nobody could object to taking orders from the government's "humble handy man, the bureaucrat."

Today, some activists see Big Health as a steeply ascending career-ladder for would be health-helmsmen and helmswomen. Perhaps not many on the Left wake up dreaming of the God State that von Mises feared, but at the same time, leftists and liberals get a warm feeling whenever they think about Big Government getting Bigger. And so yearning for a God State has been replaced by a softer pantheism for the 21st century -- the generally oceanic feeling that things go better with the public sector. If we just follow the Angell Plan, life will be a bit more heavenly.

Which explains the enormous media-wave the book is riding. Writing in The New York Times, Janet Maslin hailed The Truth About the Drug Companies as "tough, persuasive and troubling." In The Boston Globe, Carl Elliott asked, "Will Angell's excellent book help fix the system? We can always hope so."

On the September 2 "Today Show," Katie Couric gushingly promo-ed an upcoming interview with Angell, declaring, "Americans spend a staggering $200 billion every year on prescription drugs." "Staggering"? Is that the right word? If it is, then everything about the US economy rates as "staggering," starting with its overall size -- $11 trillion in gross domestic product. So from the perspective of the economy as a whole, $200 billion doesn't seem like that much. Indeed, spending that much money is a lot less staggering than the thought of all the illness and pain and death that would occur otherwise.

But Couric was on a different mission. "We'll be talking with a doctor who will tell you why prices are so high," she continued. Did someone say "high"? High is a concept that might be associated with, say, Couric's salary -- $13 million a year. But she's earned that money fair and square, through the market, which desires to see her on TV at 7 am on weekdays. Similarly, the market, desirous of better health, has run up a tab for Pharma, too. Why is the Pharma bill "staggering," while the Couric bill is barely noteworthy?

Next up on "Today" was Matt Lauer, also well paid. Lauer described Angell as "a doctor who will explain how drug companies are deceiving us." Oh my, and to think, some TV news shows leave it to the viewer to decide what is, or is not, deceptive. But maybe notions of "we report, you decide" and "fair and balanced" are too bourgeois for the best and the brightest. At NBC, the mode is: Matt will tell you what's true -- and that's that.

So now Angell is on the national agenda. Indeed, the whole health care issue is back, and John Kerry's got it. The Democratic presidential candidate is making a new $900 billion health care plan the centerpiece of his domestic policy -- and if those pesky Swifties would get out of the way, more people would know about it.

Yet mean-spirited critics, deaf to the siren call of the politics of hope, argue that no health care plan ever cost anywhere near its touted price tag; it's always budget-bustingly more. And that's where Angell can help. She argues that the same government that has given us the Interstate Commerce Commission, the Federal Communications Commission, the Federal Energy Regulation Commission, the Federal Elections Commission, and a hundred other acronymic agencies will do a wonderful job of overseeing the pharmaceutical industry. Her regulatory scheme, she tells us, will create "better drugs at lower prices." Which is to say, by this reckoning, the Kerry plan is eminently affordable.

No wonder, then, that so many on the Left have leapt to pile plaudits on the book. In the words of Verna Noel Jones of The Rocky Mountain News, "Any presidential candidate who truly cares about the state of health care in America would do well to pore through the frightening information on profit-driven drug companies . . . in Angell's in-depth and insightful book." And Jeanne Nicholson, reviewing in The Providence Journal, writes, "This is an important book . . . Expect to hear more as the presidential election campaign continues."

So if you are sick and tired of capitalism, your ship may be coming in. If Katie and Matt and the whole pack think that Angell is A-OK, is there sufficient skepticism elsewhere in the country to counteract Angellism? One might Rather wonder.

And if Kerry is not elected this November, the chances are, four years from now, that Hillary Rodham Clinton will be there to pick up the argument: Big Pharma bad, Big Government good.

The Angell Agenda is coming. It's coming from The Big Rock Candy Mountain, near the soda water fountain/At the lemonade springs. And the handouts grow on bushes. But those who think that the re-election of George W. Bush will, by itself, block the long march of Angellism are living in an even greater fantasyland.


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