Welcome to the Funny Pharma

Let’s say you were a fiscal conservative and discovered that another gigantic program not only couldn’t get enough private support to fulfill its popular mission but was engaging in waste, fraud and abuse and getting a new taxpayer subsidy, to boot? You’d probably call your representative in Washington to complain about public broadcasting, Head Start or some other liberal/socialist debacle.

But what if the failed and bailed-out program takes some of its ill-gotten subsidies and uses them to elect your member of Congress to perpetuate the boondoggle?

Welcome to Big Pharma, which is in line to get $1 billion in federal handouts to develop vaccines against potential bioterrorism agents. Why? Because it is not profitable for the companies to do good on their own; just like it isn’t profitable for public broadcasting to put on quality programming.

And why don’t the big drug companies have enough to do it on their own? Because, according to the Government Accountability Office, they are spending billions of dollars to develop and market only a few drugs they hope will be blockbuster knockoffs of existing medications instead of investing in real innovation that will help more people with wide varieties of illness. In fact, GAO reports, drug companies are spending more money each year and producing less for consumers, except high prices. Therefore, they must get taxpayer bailouts, just like liberal social welfare programs.

The McClatchy Newspapers article explaining the new Treasury handouts to fight bioterrorism likens the proposed system of drug development to the way the Pentagon gives money to defense contractors to build weapons. That should tell you something about how likely this new program is to actually do anybody any good, especially since the new law keeps the publicly funded science secret and unaccountable.

1 thought on “Welcome to the Funny Pharma”

  1. You’re barking up the wrong tree. If you want to control costs in Big Pharm, go after the practice of direct marketing of drugs to people unqualified to evaluate them. This practice creates a society of drug seekers and a profession of doctors who are essentially prescription-writing machines.

    The sheer costs of all the unnecessary doctor visits and patients seeking high-cost treatment options add significantly to the $57 trillion that the American public already owes against the promises made via Social Security and Medicare. Also, since the marketing costs of Big Pharm are at 40% of revenues, much of this is simply going to pay for the advertising (by comparison, R&D is at typical tech company levels of approximately 10%).

    As you well know, the BARDA program is primarily a weapons countermeasures program, so public transparency isn’t possible. That isn’t to say that an oversight committee shouldn’t examine the process, even though the entire BARDA authorization is in the statistical noise of US Government expenditures.

    This program is essential. It essentially provides a bio-tech analogue to DARPA, allowing the US Government to stay ahead of the state of the art rather than respond to it. And while it may not seem completely necessary now, it will become increasingly so as the fields of microbiology and nanotech merge. The sheer possibilities of applying engineering intent to designer lifeforms should frighten everyone, and once the knowledge is available, the techniques and tools are relatively cheap (to, say, developing a nuke).

    Finally, it is the height of naivety to expect that companies take a loss to “do good” when a company’s charter and sole purpose is to make money. Vaccines are extremely low margin and expecting a company to utilize valuable resources to make break-even products is unrealistic at best. The appropriate entity to provide unprofitable services to the public is a government body, and by awarding cost-plus contracts to manufacture them is in essence the government renting the facilities and personnel of the contractor for the “plus” portion.

    BARDA:
    http://thomas.loc.gov/cgi-bin/cpquery/?&sid=cp109OS4K1&refer=&r_n=hr686.109&db_id=109&item=&sel=TOC_37886&

    $57 trillion:
    http://www.mises.org/story/2196

    DARPA:
    http://www.darpa.gov

    Designer Lifeforms:
    http://syntheticbiology.org/

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