Arnold Relman writes about the pharmaceutical industry in The New Republic. His column is a response to a book by Richard Epstein that blames excessive regulation for stifling innovation when it comes to developing new drugs. Relman picks apart Epstein’s arguments and shows what has happened to the pharmaceutical industry as it has tried to be seen as maintaining a commitment to America’s health while also being beholden to their shareholders.
Epstein comes from the school of thought that believes that health care should be an individual responsibility and that government should not be involved. In this mindset, the forces of the marketplace will theoretically produce the optimal result. What we’ve discovered as we’ve moved more and more in that direction is that it doesn’t happen. The desire to maximize profits in the pharmaceutical industry has often run contrary to what the average American sees as the optimal result. Drugs are incredibly expensive and the companies have tremendous power to limit our ability to find alternatives. In addition, the regulatory mechanisms don’t go away, the pharmaceutical industry just uses them to protect their market position. A good example of this is how the pharmaceutical industry has strong-armed the FDA into keeping people from being able to import cheaper drugs from Canada.
While the pharmaceutical industry has maintained that the high cost of drugs are a result of the need to recoup the costs of R&D, Relman points out that even the former CEO of Merck disputes that claim. The high costs of drugs are based upon what the market will bear for that drug. And as we’ve discovered with health care in general, market forces tend to work better for the things we want than for the things we need. As a result, America’s pharmaceutical industry is one of its most profitable sectors, even as they continue to complain about the high cost of doing business. Drug prices don’t go down over time, they usually go up.
Pharmaceutical companies have given us a lot of new drugs in the past decade or so. Many of them, as Relman notes, are copycat drugs that do things very similar to existing drugs. The market contains a number of anti-anxiety medications, cures for erectile dysfunction, and cures for diseases like restless leg syndrome that we never knew we had. In the end, the system skews towards drugs that are cheaper to produce (many of which appear to be more recreational in nature), which are then heavily advertised to doctors and patients, while fixing more life-critical conditions are a lower priority. Even for the life-critical drugs, Epstein argues for less regulation in the certification process and maintains that safety concerns will just shake out as doctors and patients discover the benefits and drawbacks of particular drugs on their own.
One particular area of the pharmaceutical industry, though, creates some conflict among two traditional factions of the Republican Party. Highly addictive drugs used for pain management are a major source of concern for social conservatives, but have been a major cash cow for certain firms with close ties to high-profile Republicans. Purdue Pharma, the makers of OxyContin, is one company that has had to surf this divide. Some of Purdue’s top execs recently received probation and were fined over $600 million for misleading the public as to how addictive their drug was.
The verdict against the executives was different from the more traditional way that anti-drug officials in the DEA have attacked this problem – by going after doctors who specialize in pain management. Because of the addictiveness of OxyContin (which came to be called Hillbilly Heroin), many doctors were accused of supporting illegitimate drug use and found themselves being aggressively and often unfairly prosecuted. It took action from people who’ve lost loved ones in order for those who manufactured this drug to be held accountable for lying about its medical properties.
This outcome shouldn’t be a surprise. In a profit-driven system, Purdue Pharma’s actions were perfectly rational. Admitting that your product is as addictive as heroin when crushed into a powder is bad for the bottom line. So instead, they hired now-Presidential candidate Rudy Giuliani to lobby in support of the drug. They paid the father of a victim of an OxyContin overdose, Steven Steiner, to travel around the country to campaign against medical marijuana, a drug that has some similar uses to OxyContin, but is much safer (and yet still illegal at the federal level). And to underscore how much pull they had, people at high levels of the Justice Department tried to get the Virginia prosecutors to go easy on Purdue.
OxyContin can be a very useful drug for people living with severe pain. The solution is not to ban doctors from ever prescribing it any more than it’s not the solution to allow the free market to dictate how it’s marketed and sold to the American public. The answer is to ensure that government oversight provides both patients and doctors with the most accurate information possible and give them the freedom to make the most informed decisions possible, not to criminalize addiction so that people aren’t afraid to help others or get help. The FDA and the DEA should exist to protect us, not the pharmaceutical companies.