Leading policy-makers and scholars explain how market forces, deregulation, and consumer choice can work to improve health care for all Americans.


Healthy profits have healing powers
Benjamin Zycher, Ph.D., Los Angeles Times, 10-25-05

Zycher points out that while politicians are frantically scrambling to find treatments for a potentially devastating (but unlikely) avian flu pandemic, they have previously spent decades undermining the ability of pharmaceutical companies to provide vaccines and other treatments against emerging diseases and bioterror threats.

Consider the recent White House meeting among President Bush, top administration officials and the major vaccine producers. The purpose was to speed preparations for a possible — but unlikely — flu pandemic caused by a potential breakout of avian flu among human populations.
A similar 1918 outbreak killed 30 million to 50 million people worldwide. So why are those greedy pharmaceutical producers not moving mountains in anticipation of this huge potential need, with all of the dollars that would follow?
Well, let us begin with the saga of Cipro, an antibiotic effective against airborne anthrax. When the potential terrorist use of anthrax became a serious concern in 2001, the Centers for Disease Control and Prevention asked Bayer Pharmaceutical (the producer of Cipro) to obtain Food and Drug Administration approval to label the drug for treatment of anthrax. Bayer did so at its expense, and then donated 4 million doses to the federal government.
The feds then demanded another 1 million doses at a discounted price. When Bayer balked, the government threatened to suspend the patent on Cipro and thus forced Bayer to sell the additional doses at one-quarter of the market price. Other major purchasers of Cipro then demanded that same price. Moreover, Bayer enjoyed no liability protection against potential lawsuits stemming from any side effects of Cipro. …

In short, when companies are told in no uncertain terms that their profits will be squeezed to the maximum extent possible and their patents overturned at the drop of a hat, companies are more likely to invest billions in developing another cholesterol-lowering drug than expensive new vaccines for diseases that may or may not ever kill anyone.

Critics of the industry may deride this as a market failure (or perhaps just plain old greed) but the reality is that this “market failure” can be laid squarely at the feet of deliberate government policies. As a result, “because there are no free lunches, the decline of the vaccine industry now means taxpayers must finance preparation for a potential [avian flu] pandemic.”

Project FDA.
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