Far from being a model of free enterprise, the pharmaceutical industry is utterly dependent on government-funded research and government-granted monopolies in the form of patents and exclusive marketing rights. The few innovative drugs usually stem from publicly funded research done at government or university labs. Even among related me-too drugs, the original is usually based on government-sponsored work.
For example, the first of the Lipitor-type drugs, Mevacor, came on the market in 1987 and was based largely on university research. Most of today's top-selling drugs have progenitors that date back to the 1980s or even earlier.
The bottom line is that, despite industry rhetoric, drug companies are growing less and less innovative. They're just re-jiggering the same old drugs, getting new patents and exclusivity, and relying on their marketing muscle to convince doctors and patients that they're producing medical miracles.
Every advanced country regulates prescription drug prices in some way. Even in the US, Medicare regulates doctors' fees and hospital payments. So we need not worry about stifling innovative R&D. Drug companies do much less of it than they claim, and what they do they can easily afford.
Marcia Angell, is senior lecturer in social medicine at Harvard Medical School and author of The Truth About the Drug Companies: How They Deceive Us and What to Do About It.
Copyright: Project Syndicate
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