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For drug industry ignorance is bliss

Prescription drugs.

Prescription drugs. Photo Credit: iStock

Ignorance may sometimes be bliss. But usually, ignorance makes problems worse.

For example, destructive ignorance underlies the myth that pharmaceutical companies routinely profiteer off the sick. Current aspirants to political office have recently invoked it, demanding price controls to relieve patients of high drug costs. But here's what they -- and even many health-care professionals -- are ignorant about.

First, health-care value has vastly improved thanks to the drugs and devices practitioners use to help patients, something I've witnessed firsthand practicing medicine for nearly 50 years.

Second, the predominant source of those advances has been innovative private pharmaceutical and medical device companies.

Third, contrary to assertions of prominent but ignorant authorities, government- and philanthropy-sponsored research contributes only marginally to practical discoveries and almost nothing to the difficult hurdles that transform such discoveries into clinically useful products.

A fourth and possibly most-damaging misunderstanding is the ignorance -- even denial -- of the difficulty and expense of that transformation.

The staggering cost to achieve FDA approval of a new drug -- the latest estimate being more than $2.5 billion -- is hard to comprehend, and the resultant incredulity abets cost-denial. But from experience of having tried to develop life-saving products, I know that the expenditures are real.

And what it costs to discover, develop and produce a particular drug, and the health value that drug delivers have little relationship to what it costs to sustain the drug innovation enterprise. The reason for this contradiction is that nature's inscrutability causes seemingly promising projects to deliver poorer results than hoped. Many don't work well, don't work at all or cause harm.

This grim reality -- one that I have experienced all too often throughout my research career -- belies the Utopian notion that companies should market less and develop "breakthroughs" instead of derivative ("me-too") drugs. But most progress is incremental, and it costs just as much to develop a marginally effective drug as a cure. Only sufficient profitability to attract investment permits taking enough risky chances to achieve rare successes. Furthermore, marketing is an antidote against ignorance.

To be sure, any large enterprise like the pharmaceutical industry will inevitably harbor individuals who exhibit unsavory behavior, as exemplified by recent blatant price gouging of a drug needed by vulnerable patients. But the circumstances of that incident, examined in greater depth than its media coverage, reveal yet another form of ignorance: confusing the industry that makes new drugs with the firms that really produce "me-too" (generic) imitations.

Although generics can certainly provide value at reduced cost, the particular price gouging case involved a generic drug. A better-aimed critical examination would target the government regulations overseeing production of such drugs and the cartels distributing them that discourage competition that inhibits such pricing misbehavior.

As a decent society we must spare patients ruinous drug costs. But we should do so in an informed manner that involves all stakeholders, not just pharmaceutical companies. High drug costs affect hospitals, pharmacies and especially health insurers. But they -- not the drug manufacturers -- are directly responsible for large co-payments patients suffer, and their profitability requirements are arguably less compelling than those of drug makers.

Furthermore, drug prices are only one of many contributors to these businesses' costs. An emergent deadly disease, such as HIV in the 1980s, stresses hospitals and insurers financially. But despite adding no health value and demanding no profits, it provides no easy scapegoat!

Ignorance regarding pharmaceuticals is hardly bliss: even price control threats reliably chase essential investors away from risky drug development. The latest political assault confirmed this truth. Ignorance is incompatible with drug innovation.

Thomas P. Stossel, American Cancer Society professor at Harvard Medical School and a visiting scholar at the American Enterprise Institute, is author of "Pharmaphobia. How the Conflict of Interest Myth Undermines American Medical Innovation." He wrote this for