Critical Condition: Innovation
|


At National Review Online's Critical Condition blog, I have a long post explaining why imposing price controls on Medicare Part D in the name of deficit reduction will lead to less innovation and fewer American jobs:

Cost cutting would come in the form of laying off workers (or reducing pay and benefits), sending more jobs and manufacturing facilities to low-cost countries abroad, or reducing investment in discovering new medicines. None of these responses should count as a winner for the U.S. economy. One recent study found that the president's proposal could reduce direct and indirect employment in the pharmaceutical industry by up to 238,000 jobs by 2021.

Reducing research-and-development spending might seem like a clear "winner" for the supercommittee, since fewer expensive new drugs would come on the market. The government's drug tab would decline rapidly (aided by the expiration of existing drug patents), but as the U.S. population aged and more people became afflicted by cancer, Alzheimer's, and other expensive chronic illnesses, we'd just spend more money on hospital care and physician care -- actually increasing overall health-care spending. (Economist Frank Lichtenberg estimates that for every $1 that Medicare spends on newer medicines, it saves about $6 in other health-care costs, mainly from reduced hospital costs.)

As they say, check out the whole thing.

Related Entries:


keep in touch     Follow Us on Twitter  Facebook  Facebook


Our Research

Rhetoric and Reality—The Obamacare Evaluation Project: Cost
by Paul Howard, Yevgeniy Feyman, March 2013


Warning: mysql_connect(): Unknown MySQL server host 'tmiweb52.vwh.net' (2) in /home/medicalp/public_html/incs/reports_home.php on line 17
Unknown MySQL server host 'tmiweb52.vwh.net' (2)
Archives

Blogroll

American Council on Science and Health
in the Pipeline
Drugwonks
Pharmalot
Reason – Peter Suderman
WSJ Health Blog
The Hill’s Healthwatch
Forbes ScienceBiz
The Apothecary
EyeOnFDA
KevinMD
Marginal Revolution
Megan McArdle
LifeSci VC
Critical Condition
EconLog
In Vivo Blog
PharmaGossip
Pharma Strategy Blog
Drug Discovery Opinion