By James B.
Meigs
Tuesday, May 25,
2021
On March 15, 2020, Joe Biden and Bernie
Sanders appeared in a CNN debate. The timing was ominous. COVID-19 had begun
its exponential explosion in the United States. New York and other cities were
locking down and hospitals were bracing for the inevitable deluge. CNN’s Jake
Tapper asked Senator Sanders, “If you were president right now, what would you
do to make sure every sick American is able to get treatment?”
Sanders quickly zeroed in on what he
believed was the core problem. “We have a bunch of crooks who are running the
pharmaceutical industry,” he thundered. “Right now, in the midst of this
epidemic, you got people…saying, ‘Oh, wow, what an opportunity to make a
fortune!’” As president, Sanders vowed, he wouldn’t let that happen. “The drug
companies will not rip us off!”
His position was hardly out of the
mainstream. In a 2019 Gallup poll that measured attitudes toward major
industries, the pharmaceutical industry ranked dead last, with 58 percent of
respondents holding a negative view. Even Republicans, who usually at least pay
lip service to free enterprise, often rail against the industry. Ever alert to
populist antipathies, Donald Trump made a habit of slamming Big Pharma in his
rallies and on social media. So, as coronavirus fears ramped up in early 2020,
it was only natural for both parties to renew their attacks on this most widely
loathed branch of the health-care establishment.
But while Biden and Sanders debated in
Washington, scientists and executives at Moderna, Inc. were preparing as if for
war. The 10-year-old biotech firm, located in Cambridge, Massachusetts, was a
small but ambitious player in an industry dominated by giants such as Johnson
& Johnson, Merck, and Pfizer. In its short life, the company had raised $1.6
billion in venture capital before going public in 2018. Investors believed that
Moderna’s core technology—a method of inserting bits of synthetic RNA (DNA’s
fragile sister) into human cells—could revolutionize the treatment of cancer
and other diseases. But the company had yet to bring a single drug to market—or
even to prove that its “messenger RNA,” or mRNA, technique was safe.
In January 2020, when news broke that a
mysterious coronavirus was circulating in China, Moderna’s scientists quickly
realized that a vaccine against the new disease might be a perfect application
for their process. On a Saturday—January 11, 2020—a heroic Chinese researcher
made the new virus’s genetic sequence public. Moderna’s technicians took that
data and then worked through the weekend engineering a vaccine using their mRNA
technique. By Monday, they were finished. “This is not a complicated virus,”
Moderna’s French-born CEO, Stéphane Bancel, later told the New York
Times.
Developing a potential vaccine based on
genetic data is one thing. Proving that it is effective and safe and then
manufacturing and distributing it on a massive scale—those are challenges of
different order. Fortunately, the Trump administration’s Operation Warp Speed
stepped in to provide the resources Moderna didn’t have: $1 billion to support
the production and testing of the vaccine and another $1.5 billion to pay for
100 million doses. Though the Warp Speed program wasn’t officially announced
until April, in March—as Sanders was denouncing Big Pharma “crooks” from the
CNN podium—Moderna was already ramping up a huge manufacturing operation to
produce its exquisitely delicate vaccine. It needed to expand its workforce by
50 percent virtually overnight. Perhaps hardest of all, the company had to
conduct the clinical trials that would confirm its vaccine’s safety and
efficacy. Normally, these steps take two to five years. Sometimes, researchers
work for decades without ever producing a viable vaccine.
Moderna would get the job done in 10
months.
At the same time, some of the biggest
players in the pharmaceutical industry were racing to get their own vaccines
into the testing pipeline. Pfizer, working with the German firm BioNTech, also
had an mRNA vaccine in development. Johnson & Johnson, AstraZeneca,
Novavax, Sanofi, and GlaxoSmithKline were working on different approaches. No
one knew which of these vaccines would get to the finish line first. It seemed
likely that some—perhaps most—of the candidates wouldn’t survive the testing
gauntlet. Such high-visibility failures could cost these companies billions and
damage their reputations for years. In general, developing a vaccine for a new
disease is a surprisingly risky investment for any drug company. Competitors
might beat you to market, making your product an also-ran. Or, as happened in
the cases of SARS and Zika, the disease might subside quickly, making it
impossible to test the vaccine’s efficacy. Even successful vaccines aren’t
usually big moneymakers. Unlike drugs for chronic conditions, most vaccines
need to be administered, at most, only a few times in a patient’s life. That
doesn’t add up to a lot of billing cycles.
Under normal conditions, steely-eyed
investors shoulder most of the financial risks of drug development. And
companies usually wait until they think a drug or vaccine is likely to get FDA
approval before building out the necessary manufacturing facilities. But these
weren’t normal conditions. By offering up-front money to the drug makers who
needed it and placing advance orders for hundreds of millions of doses,
Operation Warp Speed helped share the risks. Drugmakers expanded facilities and
started cranking out tens of millions of doses even as their vaccines were
still in the testing phase.
When Bancel left a much larger firm to
become CEO of Moderna in 2011, he had warned his wife that the company’s mRNA
technique had only a 5 percent chance of yielding successful products. But if
it worked, it would “change the course of medicine.” The company attracted
serious investment, but it also faced devastating setbacks. Several promising
treatments failed in early phases. In 2016, the journal Science slammed
Moderna, comparing it to the scandal-plagued blood-testing start-up Theranos.
Bancel knew that failing to deliver a viable COVID-19 vaccine might be a nail
in his company’s coffin. Results from the vaccine’s all-important Phase III
clinical trial were due in mid-November. As he later recounted to the New
York Times, Bancel anxiously retreated to his home office and waited for
the results. They were stunning: The vaccine was 94.5 percent effective in
preventing infection.1 And the handful of infections that did
occur were all mild. The audacious biotech company had not only proved that its
technique was workable and safe, it had developed a vaccine with the potential
to save millions of lives. Bancel burst out of his office to tell his wife and
two teenage children. “The four of us were crying,” he said.
Early in the pandemic, the FDA said it
would accept a vaccine that was only 50 percent effective. And many experts
thought such a vaccine would take a minimum of two years to develop. Instead, the
Moderna and Pfizer vaccines both gained approval before the year was out. In
other words, the U.S. had vaccines “ready at half the time the most optimistic
timeline projected, with twice the efficacy hoped for,” noted Zeynep Tufekci,
one of the smartest pandemic-policy analysts. Other companies were close behind
with their own vaccines. “This will go down in history as one of science and
medical research’s greatest achievements,” the acclaimed medical researcher
Eric Topol wrote at the time. “Perhaps the most impressive.”
By April 2021, the U.S. was administering
more than 3 million shots a day; more than half the country’s adult population
had received at least one dose. By May, the biggest hurdle wasn’t the supply of
vaccines but the reluctance of some segments of the population to get
vaccinated. Nonetheless, deaths and hospitalizations plummeted. People began
returning to offices, restaurants, and places of worship. They were taking off
their masks and hugging their friends and relatives again (overcautious
admonitions from public-health officials notwithstanding). America was coming
back to life. Big Pharma had delivered.
Would it be asking too much to expect
Americans to pause briefly at this moment and say, “Thanks!”?
* * *
Sadly, yes. Anyone who thinks the public,
the media, or our political leaders might show a smidgeon of appreciation for
these lifesaving vaccines hasn’t followed the history of the pharmaceutical
industry. It seems the more lives the drug companies save, the more people revile
them. Yes, yes, I know—the opioid crisis; high drug prices; that slimy “pharma
bro” Martin Shkreli—we’ll get to all that. But first, let’s focus on our
current situation. The U.S. is emerging from pandemic hell while much of the
rest of the world struggles with recurring waves of infection. Shouldn’t we
take a minute to study how we achieved this miracle and to think about policies
that might help us do even better next time?
“This is not the time for profiteering,”
Bernie Sanders said at that March 2020 debate. But profiteering—or, to put it
more politely, the hope of earning a healthy return on investment—was an
indispensable ingredient in the vaccine triumph. It wasn’t the only ingredient.
The people who choose to work in pharmaceuticals don’t do it solely with the
expectation of getting filthy rich. (Surely, investment banking, a job in the
digital economy—or perhaps a career in politics—would be easier paths to that
goal.) Most of them genuinely care about alleviating human suffering. Nor was
the vaccine breakthrough purely a free-market triumph; the federal government
provided both crucial investment and logistical support. Operation Warp Speed
was a staggering example of how public-private partnerships can combine the
power of government with the resourcefulness of private industry. But none of
it would have happened without those greedy investors who, year after year,
poured billions into companies like Moderna, risking massive losses in the
long-shot hope of spectacular returns.
One is tempted to thank God that no one
listened to Bernie Sanders. But that would be premature. Although Sanders
didn’t win the Democratic nomination, his progressive brand of politics is
growing ever more dominant in the Democratic Party. And, despite Biden’s
campaign image as a benign centrist, as president he has shown little
willingness to restrain the radical flank of his coalition. In fact, many of
his administration’s proposals come straight out of the progressive playbook. In
early May, the White House announced that it will rescind intellectual-property
protections for COVID-19 vaccines. Various progressive groups, along with the
Word Trade Organization, had been pushing for such a move for weeks. The
activists aren’t just demanding that the pharma companies give up their
patents. They also want to force them to perform a “technology transfer,”
teaching manufacturers in India and elsewhere their proprietary methods for
creating the breakthrough vaccines.
The news was a blow to vaccine makers.
Obviously such a move would strip these companies of some of the profits they’d
counted on in return for developing successful vaccines. Worse, if
tech-transfer rules are enforced, it will also undermine their ability to make
money on future breakthroughs. For example, Moderna spent a decade developing
methods to handle those fragile strands of mRNA. If some of those
methods are revealed to competitors around the world, the company will have
less market advantage when it comes to developing future products. The message
to investors is clear: Don’t invest in companies trying to save lives. If they
succeed, the government might throw away their patents.
Ironically, the Biden administration’s
move probably won’t do much to increase global vaccine supply. The technology
involved in producing mRNA vaccines is extremely finicky and complex. It could
take many months, possibly years, for overseas producers to get up to speed.
And before that process even starts, all negotiations on the issue have to go
through the WTO, a notoriously slow-moving organization. Economics writer James
Surowiecki suggests a better plan: The U.S. government (and those of other
wealthy nations) should simply pay the drugmakers to ramp up production,
license their technology where feasible, and send billions of doses wherever
they’re needed. “I guarantee they will find a way to do it,” he wrote on
Twitter. But paying pharma companies to make more vaccines would offend the
sensibilities of Biden’s progressive flank. White House insiders told the New
York Times, “It is bad politics for the president to side with
pharmaceutical executives.” So Team Biden took the easier path: blowing up the
business model for making vaccines and stripping pharma investors of their
returns. While it was Sanders who said he’d make sure no drug companies “make a
fortune” during the pandemic, it is Biden who is making good on the promise. As
so often happens when progressives make policy, their zeal to punish their
enemies takes precedence over their desire to achieve actual results.
Meanwhile, in Congress, Sanders and his
progressive colleagues in the Senate and the House have their own plan to cut
Big Pharma down to size. They have introduced three bills intended to force
down drug prices and strip drug companies of their patents if they don’t play
ball. In the business of saving lives, no good deed goes unpunished.
Normally, conservative lawmakers push back
when Democrats try to hog-tie an industry with excessive regulations. But Big
Pharma can no longer count on support from Republicans. “Pfizer & others
should be ashamed that they have raised drug prices for no reason,” Trump
tweeted in 2018. It was one of his many swipes at the industry. His
administration made several abortive attempts to control drug prices under
Medicare Part B. Senate Republicans Josh Hawley and Rick Scott proposed their
own price-control plan in 2019, though it never came up for a vote. If
congressional Democrats prioritize sweeping pharma regulations under the
current administration, will Republicans even push back? Don’t count on it.
Without question, there are a number of
areas where the U.S. system of developing and regulating drugs does need
reform. But some of the things that bother Americans most about Big Pharma—high
prices and industry consolidation—are themselves partly the result of
layer after layer of health-care regulations. Smart proposals to unwind some of
that complexity would be welcome. Not so welcome would be new rules that would
squeeze out the profits from new drugs and vaccines, thereby cutting off the
pipeline of private investment. “It is true that the American medical system is
complex, and pricing is opaque and that can lead to abuses,” George Mason
University economist Alex Tabarrok told me in an email. “But Americans are
fortunate that it pays to invest in new drug research and development.”
For progressives, of course, that is
precisely the problem: It pays to invest in new drug research. The
idea that someone would make a profit off of curing a disease strikes them as
immoral. In the progressive worldview, intentions always
matter more than outcomes. If some of the people involved in drug
development hope to get rich, it doesn’t matter that their drugs save lives;
any product that emerges from that corrupt system must be viewed as the fruit
of a poisoned tree.
An academic critique of the pharma
industry entitled “Thick as Thieves?”—written by a patient advocate and a
business-ethics professor—makes this point explicitly. The industry’s “profound
focus on self-interest places in question how much of what it does actually
benefits society,” they write. Do you see the trap here? It’s not enough
to do good; you must be good—you must save
lives for entirely selfless reasons. (Former philosophy students may hear an
echo of Kant’s unachievable “categorical imperative” here.)
This moral framework puts pharmaceutical
companies in a bind: The more lives a company’s innovation might save, the more
it is criticized for not giving it away for free. The drug company Burroughs
Wellcome learned this the hard way over three decades ago. In 1987, just three
years after HIV, the virus that causes AIDS, was identified, the company
introduced AZT, the first effective treatment for the horrific disease. Fortune called
that accomplishment “the pharmaceutical equivalent of an under-two-minute
mile.” Like many breakthrough drugs, AZT was extremely expensive to produce,
and it was initially approved for just a small number of patients. So Burroughs
put what most people saw as an obscenely high price on it. The outrage was
instantaneous. Over the next two years, the company was pilloried in the press
and its leaders were called to defend themselves on Capitol Hill. AIDS
activists slapped “AIDS Profiteer” stickers on other Burroughs products in
drugstores and invaded the company’s headquarters with chainsaws. The Burroughs
executives might have been pharmacological geniuses, but they were
public-relations dunderheads.
Ever since, progressives have seized on
every example of a Big Pharma “abuse”—whether fairly or not—as arguments to
take down the industry as a whole. And too often, Big Pharma makes itself a Big
Target. For example, it’s true that some companies, especially Purdue Pharma,
were dangerously lax in the ways they promoted and distributed prescription
opioids. Criticism is called for. But, as Jacob Sullum has documented in a
series of articles at Reason, the popular notion that patients were
routinely prescribed opioids for pain and then became hopeless addicts is
largely a myth. Study after study has shown that illicit drugs such as heroin
and fentanyl—and not prescribed pain meds—cause the vast majority of opioid
deaths. That’s why it isn’t surprising that the opioid crisis has continued
long after authorities radically curtailed access to prescription painkillers.
(Indeed, today, many cancer patients and others have difficulty obtaining
adequate pain medication.)
When firms dramatically hike prices on
drugs that had previously been more affordable, they offer another occasion for
outrage. Turing Pharmaceuticals founder Martin Shkreli became a household name
by buying up the license to produce the anti-parasitic Daraprim, and then he
boosted the price from $13.50 to $750 a dose. Shkreli was condemned by everyone
from Sanders to Trump and then compounded the damage with his smirking
responses to criticism. As one industry consultant put it to me, “Shkreli
essentially wadded himself up into a softball for the press.” In reality,
Turing was exploiting FDA rules that make it hard for new companies to win
approval for their own generic versions of drugs that are no longer under
patent. Since the market for Daraprim is fairly small, Shkreli knew it was
unlikely that another drugmaker would want to go through the arduous approval
process just to sell a generic version of the medication. Shrkeli milked that
near-monopoly power shamelessly, but he didn’t write the rules. It would have
been useful for politicians and the press to explore ways to fix those perverse
incentives. But they preferred to beat up on Shkreli—and on the pharma business
as a whole. Again.
“Pharma is the whipping boy for the whole
medical establishment,” the industry consultant told me. The reason? “Drugs are
the one component of healthcare where the prices are exposed to the consumer.”
And, due to higher co-pays, “you have to reach into your own pocket to pay part
of it.” Another factor—ironically—is the generally low prices consumers pay for
drugs once their period of patent protection ends and they go generic (notwithstanding
outliers like Daraprim). Because new drugs typically spend so many years in
development, most are on the market for only a decade or so before their
patents expire. “Suddenly a drug you’ve been taking for years drops
dramatically in price,” he says. “People think,‘Why wasn’t this $8 all along?
It must be some sort of scam.’”
When introducing a trio of bills aimed at
forcing down drug prices in March 2021, Sanders said, “The greed of drug
companies is out of control and the cost is human lives.” Now, it’s true that
drug prices are confusing, and often alarmingly high, at least on paper. But
the fault does not lie primarily with the drug companies. As Scott Gottlieb
wrote in a piece published before he became FDA commissioner under Trump, “by
the time a drug reaches your medicine cabinet, it passes through a long series
of intermediaries who each take a cut of money.” The system, which grew up in
response both to the regulatory environment and the needs of insurance
companies, is too mind-numbing to describe in full. In a nutshell, it includes
wholesalers and “pharmacy-benefit managers” (PBRs) who negotiate with the drug
manufacturers on behalf of health plans. Drugmakers pay huge rebates to those
PBRs, who pass much of that money on to the health plans, and, indirectly, to
consumers. It’s a crazy-quilt system that gives pharma companies incentives to
place the highest possible list prices on their drugs. They know that almost no
one actually pays those prices. (Though, as always, people without insurance
wind up getting the worst possible deal.) And Big Pharma critics get to rail
against their cruelty and greed.
* * *
The truth is, in most areas of human
health, the pharmaceutical companies are not the problem; they are the
solution. Yes, there are legitimate concerns about how Big Pharma sets prices.
If companies are colluding to limit competition or prop up prices, for example,
those cases should be investigated as antitrust violations. But the majority of
complaints about the pharmaceutical business aren’t just exaggerated; they get
the issue entirely backwards. Activists who want to rein in the drug companies
are attacking the part of our health-care system that works best. “New drugs
are one of the best and cheapest ways to increase lifespan and improve life,”
Tabarrok told me.
The numbers are staggering. Deaths due to
heart disease have been cut roughly in half since the 1950s, in large part
thanks to cholesterol-lowering and other drugs. A 2019 study in the journal International
Health looked at the impact of new drugs in reducing deaths from 66
diseases in 27 countries. The study measured the total number of “life-years”
the population gained as a result of these new drug treatments (up to the age
of 85). It found that if no new drugs had been introduced between 1981 and
2013, the number of life-years lost to these diseases would have been more than
twice as high. It’s true that many new drugs that target specific forms of
cancer or rare diseases are fantastically expensive. Critics complain
that some of the most expensive drugs extend life for only a few weeks or
months. But those weeks and months add up. Look at how cancer survival rates
have diverged between the U.K., where the National Health Service more strictly
limits access to treatments deemed not cost-effective, and the U.S., where
novel treatments are more available. One study found that, two years after
diagnosis, 31 percent of U.S. lung-cancer patients were still alive, while only
19 percent of English patients were. (Of course, drug treatment may be only one
of several factors contributing to that outcome.)
Medications for everyday chronic diseases
are especially cost-effective. “It is a mistake to focus on the upfront
individual cost of medications while ignoring the huge savings generated by
preventing disease complications with early medical interventions,”
writes Larry Hausner, former CEO of the American Diabetes Association. Common
drugs for hypertension and hyperglycemia can dramatically delay or prevent the
onset of diabetes, one of today’s most debilitating and expensive diseases.
“Preventing just 30 percent of pre-diabetics from contracting diabetes would
save the health-care system $74 billion,” Hausner writes.
Critics of Big Pharma tend to look at our
current medicine cabinet of treatments and conclude that those drugs could be
delivered much more cheaply. They aren’t wrong about this. If we voided
existing patents and allowed anyone to manufacture these drugs, they could be
produced at a fraction of today’s prices. After all, it is the research, and
not the chemicals that go into them, that makes new drugs so expensive. But
anti-pharma activists rarely consider how society will then incentivize
the next generation of medical innovation. New and better
pharmacological tools are still sorely needed. For example, a study by the
Alzheimer’s Association estimates that a new drug that delayed the onset of
Alzheimer’s by five years would result in steadily growing savings in
health-care expenditures. Within 25 years, those would amount to $367 billion a
year. Besides the dollars, such a drug’s contribution to human happiness would,
of course, be incalculable.
Our modern system of drug testing and
regulation grew partly in reaction to the thalidomide tragedy of the early
1960s. That case involved a popular sedative developed in Germany, though never
approved in the U.S. When doctors began prescribing it to treat morning
sickness during pregnancy, a horrifying side effect emerged: a birth defect in
which the baby’s limbs failed to develop properly. The case produced global
outrage and revealed that many clinical trials meant to test drug safety and
efficacy were slipshod. In the U.S., the FDA moved to expand the clinical-trial
process and tighten up standards for drug approval. (Germany, Britain, and
other developed countries did the same.) All in all, that was a good thing.
Over time, however, the approval process has grown into an obstacle course that
can last years and cost upwards of $1 billion to navigate—whether or not a drug
is successful. Those lengthy trials also spin off detailed reports listing
every possible side effect reported by participants. These might be
significant, or they might be completely unrelated to the drug being tested.
Either way, they serve as road maps for legal firms that want to build
class-action suits targeting drug companies.
Extended clinical trials and frequent
legal challenges create what economists call “barriers to entry” for
pharmaceutical entrepreneurs. Small companies find it much harder to navigate
this swampy regulatory and legal terrain. Even big pharmaceutical players often
seek greater clout and security through mergers and acquisitions. Which is how
we wind up with global drug companies with names like GlaxoSmithKline. But big
companies also have more to lose. David Taylor, a leading pharmacologist in
Britain, writes, “More and more promising drug candidates are terminated early
in the process, at the first sign of any potential problem.” Neither aspirin
nor penicillin would have made it to the market under today’s industry
drug-development regimes, he adds. This high failure rate can be devastating to
the morale of pharmaceutical researchers. “It is not unusual for a medicinal
chemist,” Taylor writes, “to have spent his/her whole career in the industry
and to have never worked on a successful product.”
The inherent conservatism of drug
regulators isn’t due to lack of professionalism or insufficient humanitarian
concern. (“The people at the FDA really try to be good stewards,” the industry
consultant told me.) But, as Milton Friedman pointed out decades ago, “the
pressure on the FDA is always to be late in approval.” Here’s why: Imagine the
agency is tasked with approving a new drug. It could accidentally certify the
drug as safe and effective when it is actually dangerous or ineffective. In
statistics, this is known as a Type I error. Or it could refuse to certify a
drug that is, in fact, safe and beneficial—a Type II error. In the first case,
the backlash tarnishes the FDA and endangers the careers of those who made the
decision. But if the agency refuses to authorize a promising drug (or delays it
for years), the damage happens off the public’s radar. It’s impossible to prove
that particular patients would have survived if they’d gotten the drug in time.
“When the FDA fails to approve a good drug,” economist Tabarrok writes, “people
die, but the bodies are buried in an invisible graveyard.”
This is especially true in the case of
very serious diseases. After all, questions of safety and efficacy aren’t
always black and white. A drug with potentially deadly side effects would be a
wildly inappropriate treatment for, say, teenage acne. But those same risks
might be willingly accepted by a patient with Stage 4 cancer. In a fascinating
biostatistical analysis, three researchers (two of them associated with MIT and
one with Pfizer) confirmed that the FDA’s “current standards of drug approval
are weighted more toward avoiding a Type I error than avoiding a Type II
error.” In cases of devastating illnesses such as pancreatic cancer, they
found, the approval standards were too restrictive by an order of magnitude.
Those researchers advocate that the FDA employ more nuanced statistical
analyses that would allow it to weigh each drug’s potential benefits more
fairly.
Big Pharma critics complain that the
industry churns out too many “me-too” drugs. Stanford Medicine magazine
editor Rosanne Spector writes that drug companies “chemically rejigger an oldie
but goodie, craft a new name, mount a massive advertising campaign and sell the
retread as the latest innovative breakthrough.” The argument goes that, if
fewer such drugs were approved, overall drug prices would be lower. There are
cases where a new drug, under a fresh patent, offers few advantages over an older,
cheaper generic drug. But that is not an argument against new drugs. It is an
argument against today’s byzantine system of drug pricing. Too often, neither
doctors nor consumers have clear incentives—or the right information—to choose
less expensive alternatives. But limiting new drugs, even ones that are similar
to existing drugs, doesn’t solve that dilemma.
If you ask physicians, they prefer more
options, not fewer. As the late analyst Peter Huber pointed out, “human
biological diversity is much broader than regulators and researchers had
assumed.” Drugs designed for the average patient might not work for particular
patients. In cancer and other fields, doctors have discovered that only rarely
does a single drug serve as a silver bullet. But a combination of drugs
tailored to the individual patient—a kind of silver shotgun blast—can often be
effective. Of course, the FDA approval process isn’t set up to test such
combination therapies. Fortunately, the revolution in genetic testing, combined
with big-data techniques, means we have entered the era of personalized
medicine: treatments micro-tailored to the individual patient. But designing
such personalized drug cocktails requires having a vast range of drugs to
choose from. As Tabarrok writes, we need to “give physicians a larger armory
and let them decide which weapon is best for the task.”
* * *
Historically, our drug-approval process
has focused on delivering medicines that benefit the largest group of patients
with the fewest possible risks. The progressives who want to overhaul our
medical system believe that the range of future drug choices should be
restricted even more, with low prices being the main goal. In contrast, a
growing movement in health care calls for expanding options, and giving
physicians and their patients more freedom to assess risks and benefits for
themselves. “For more than 80 years, the FDA has infringed on the right of
people to make their own lifesaving decisions,” writes surgeon Jeffrey Singer.
I doubt many Americans would want to do away with the FDA’s entire testing
regimen. But what if patients had the option of choosing medications that
hadn’t yet received the FDA’s blessing but had been approved by similar
regulatory agencies in a few other developed countries? That’s the idea behind
the Reciprocity Ensures Streamlined Use of Lifesaving Treatments (RESULT) Act,
twice proposed by Senators Ted Cruz and Mike Lee. In a world where medicine is
more personalized, it makes sense to give doctors and their patients more
options—and more control. Such a bill has no chance of moving forward in
today’s Congress. But the concept should be championed, even if, for now, it is
more thought experiment than policy.
Progressives have a bad habit of taking
the benefits of free-market economies for granted. Cheap food, smartphones,
housing, electric cars—they believe all of these things will remain abundant no
matter how much we hobble the market system that produces them. In fact, they
believe that if we rid the system of “excessive” profits—and remove those venal
profiteers—all those good things will be even more affordable. They’ll be
distributed more “equitably.”
Nowhere is this wishful thinking more
prevalent than on the topic of health care. Big Pharma critics often argue that
if the big companies were cut down to size, drug research would sail along much
the same at universities and at federally funded research centers. They are
partly right: nonprofit and federally funded research contributes a lot to
biomedical progress. And the U.S. National Institutes of Health plays a big
role in early drug development. (Moderna consulted with NIH when designing its
vaccine.) Certainly, there’s room for more private-public partnerships to
develop treatments for very rare diseases and to address other challenges that
the market overlooks. But for the drugs that are most likely to help most of
us, the brutally expensive work of drug testing can happen only with massive
private investment.
Though progressives might find the idea
distasteful, the investors who pour billions into pharmacological research do
more to save and improve lives than any top-down government program could. Even
our miracle vaccines would not have arrived so quickly had investors not spent
years gambling fortunes on longshots like Moderna’s mRNA research. It was those
years of tinkering and failing that allowed the company to refine its techniques.
And then, when every day counted, Moderna was able to deliver a vaccine faster
than any expert could have predicted. Now that it has been validated, the mRNA
technique holds out realistic promise to create new treatments for cancer and
other diseases. Not to mention faster and more flexible new vaccines for the
possible pandemics to come.
“If I am stricken with a deadly disease,”
Tabarrok told me, “I sure hope that someone will profit from curing my
disease!” Any regulatory scheme that sucks the profit out of drug innovation
would slow the development of new drugs and vaccines to a trickle. Sure,
university and government researchers would still come up with promising candidates for
new drugs. But fewer companies would have the resources to turn those leads
into products. They would sit on the shelf. Meanwhile victims of diseases such
as cancer, diabetes, and Alzheimer’s would never know about the drugs that
might have helped their condition, the drugs that never made it through the
pipeline.
That would be the ultimate Type II
error—exactly the kind of error that was avoided in the
miraculous innovations of the past year, from Moderna’s leap of faith to
Operation Warp Speed to the accelerated vaccine approvals. We need to learn
from that example and continue to chip away at the sclerotic ideas and
regulatory policies that make drugs too expensive and their development and
deployment too slow. Big Pharma has saved us from the pandemic. It could do so
much more. But, between Biden in the White House and Bernie in the Senate, Big
Pharma will likely be a lot less eager to go all-in next time we face a global
health crisis. The precedent set by these threats to strip away hard-earned
patents will never go away. Drug companies are now on warning that they’re
better off sticking to inventing new meds for hair loss and erectile
dysfunction. Trying
to save lives only gets them in trouble.
1 Just a week earlier, Pfizer had announced that its mRNA
vaccine was both safe and extraordinarily effective.
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