TCS Daily

Lancet Snaps Fingers to Make New Drugs Appear

By Gilbert Ross - December 11, 2009 12:00 AM

The pharmaceutical industry gets blamed for many flaws in America's healthcare system. Witness an editorial in last week's The Lancet, a widely read British medical journal calling for new antibiotics to be created.

The Lancet editors (likely including editor in chief Richard Horton, who published a tragic anti-vaccine article in that journal eleven years ago) wish that drug companies would simply ignore the potential profitability of new drug pipelines -- devoting their resources to more charitable research aims in accord with the journal's own public health goals. The editors assert that the executives in charge of Big Pharma's long-term goals "may not perceive development of antimicrobial drugs to be attractive -- owing perhaps to a clinical need restricted to short courses of therapy, and the likelihood that the drugs' useful lives will be truncated by resistance."

In other words, according to the "J'accuse" folks at The Lancet, Big Pharma prefers to develop blockbusters that millions of people will take for decades rather than diverting R&D budgets to fight renegade bacteria. Never mind that drugs for chronic diseases such as heart disease and high blood pressure benefit millions -- even while contributing to the financial wellbeing of the drug makers, allowing them to invent more lifesaving drugs for future generations.

The editors in London overlook the fact that financial incentives are the engine of the pharmaceutical industry (and that regulatory obstacles to developing and bringing to market effective new antibiotics are myriad, increasing costs). New drugs will not miraculously appear just because The Lancet, even in consort with all knowledgeable authorities, suddenly realizes we are in desperate need of them.

This attitude -- that drug companies should become charitable endeavors-- is not confined to The Lancet. When Marcia Angell was editor at the New England Journal of Medicine in 2006, she wrote a book in effect demanding that drug-makers stop producing expensive new drugs and settle for the generic versions, abandoning insufficiently-unique "me-too" drugs as well -- one size should be good enough to fit all. After all, why should drug companies exploit sick patients for profit?

But going down that path would lead to stagnation in drug pipelines, and the current scarcity of effective new drugs (including antibiotics) would soon be looked back upon as an innovative Golden Age, as we consigned our children and grandchildren to vintage-2009 drug options.

Rather than pointing fingers, maybe the Lancet mega-brains should consider the reasons new antibiotics and other potential lifesaving drugs are in such short supply:

  • Drug companies now fear to invest in hugely expensive and decade-long drug development and clinical trials when pressures from every side encourage short-term, profit-making research areas: lifestyle drugs and cardiovascular risk-reducers help create profits to re-invest.
  • The companies have to pay millions of dollars in what amounts to blackmail to get "a seat at the table" with government negotiators -- only to find themselves looked upon as a budget-gap-filling item on the menu rather than as guests.
  • More and more stringent rules govern so-called "conflict of interest" practices, limiting interaction between academia and industry and restricting medical communications between doctors and drug companies
  • Predatory tort lawyers sue perceived deep-pocketed companies for any untoward reaction
  • Even the President implies that drug makers should be content to produce a cheaper "red pill" and pass on the expensive new "blue pill."
  • Now, even the once-dead proposal to allow "imported" drugs (cheap thanks to foreign price controls, yes -- but of uncertain provenance and components) into our pharmacies has been resurrected to haunt us again in the new Senate "health reform" bill.

Those at The Lancet and their ilk who threaten to convert the drug industry into a public utility seem to believe that all pharmaceutical researchers need is their sage advice to "just do it" -- as if, by magic, millions of effective and safe new pills will roll off the assembly line, free of charge. They believe that our new, lifesaving drugs were developed by the government (at the National Institutes of Health, perhaps), so why should the pharmaceutical industry make all those profits? The fact that other countries with government-owned or -operated drug industries have seen their innovative drug pipelines wither away has not convinced critics that the same thing could easily happen here. In fact, it has already begun.

Gilbert Ross, M.D., is Medical Director of the American Council on Science and Health (


A key mistake
Socialists tend to assume that an economy supports certain industries because they're indispensable and they will therefore necessarily exist no matter what is done to them. That's why they're convinced that they don't need to know much about business or markets or industries or economics to run the economy. Instead, they only need to understand the political calculus of economics, i.e. whose arm must I twist, whose pocket can I pick, who do I have to pay off, and who will I scapegoat if it all blows up in my face? These are the folks - the Chicago Gang - who are mashing the buttons and yanking the levers of America's economy like agitated baboons trapped in a 747 cockpit.

Worse, Big Pharma also suffers from the Big Pot of Cash problem. Big Pots of Cash attract demagogues, politicians, looters, rent-seekers, beggars and do-gooders like manure attracts flies, and this cloud of blood-sucking vermin can't be diverted by reasoning with the voters. That's why Washington D.C. is literally crawling lawyers, lobbyists and supplicants, all demanding their share of that Big Pot of Cash collected from the taxpayers and getting it. Sure, this unholy spectacle enrages the voters, but year after year, decade after decade they don't put an end to it even though every politician they reelect promises to do just that and doesn't. But I digress.

With regard to Big Pharma, a demagogue need only mention that Canadians pay 50% less for pill X than Americans do, and that last year Pinchgut Pharmaceuticals - who manufactures pill X - made $2 billion in profits, and that's the game. The three strikes against Big Pharma are the Big Pot of Cash, the profits, and the price of the goods sold, and never mind what roll governments play in pricing.

In view of the foregoing, Big Pharma may want to consider organizational structuring solutions designed to break up their Big Pot of Cash into little pots of cash around value creation centers.

The Chicago thugs made their profits off illegal drug dealing
It is easy to make gin in a bath tub or to smuggle Scotch from Canada.
Who will make life saving pharmaceuticals in their bathtub or who has the technology to manufacture such life saving products so they can be smuggled into the country?

Atlas Shrugged anybody?
Seems clear we are going to be living through the Ayn Rand novel, Atlas Shrugged for some time.
Reminds me also of a Fredrick Pohl and Kornbluth story, called The Marching Morons. Wherein a 20th century advertising conman is woken up from suspended animation to help the future elitist leaders eliminate and dispose of all the dumarse surplus population by tricking them into doing the job themselves. "Progress" is faked and a shame under these leaders, who must pretend we are 'progressing' in a thousand and one funny ways. Funny if your not subject to living under them.

Rand Solution??
So, I read Atlas Shrugged long, long time ago. I don’t remember exactly how it ended. Basically, this is what I remember: Atlas (synonymous for the engine of growth and productivity, the industrialists, the capitalists, etc.) stopped producing because they got tired of the parasites (the non-productive elements, tax collectors, government officials, bureaucrats, etc.) feeding off of them. But I don’t remember any practical or realistic ideas on how this would actually happen in the real world.

So, here we are. We have productive element in our society (businesses), and as it grows, so does the parasitic element (government) that feeds off its productivity. How does the host organism get rid of the parasite? The only way seems to become so deathly sick that the parasite either starves or gives up and goes looking for another host.

In other words, the only way to kill big government is to starve it by cutting off it’s money supply – something like a severe recession, leading to a severe lack of tax revenue for the parasite. If so, the only way to kill the ever-growing pile of entitlement programs is for the US taxpayer to go broke, which would cause the US government to go broke. But that paints a pretty bleak picture, I’m afraid. Does Rand give us any better hopes?

An Ayn Randian Dystopia - but who are the bad guys?
We may well have an Ayn Randian Dystopia here - but who are the bad guys?

These companies have distorted scientific findings, misrepresented their products, faked results, and worked with government to hide all these things. There certainly are innovative parts of this industry, but those parts are being submerged by the looters and moochers. What part of this product misrepresentation and fraud and collusion with government fits with the Free Market Ayn Randian vision?

Atlas is going to shrug - but the Atlases are the honest scientists, medics and aware patients out there.


The government.
For 1) regulating too much, and 2) for colluding with business.

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