For a while there it seemed like there wasn't much a pill couldn't cure.
Everything from high cholesterol to “erectile dysfunction” to something that I really thought was a joke when I first heard about it: “Restless Leg Syndrome” (which sounds a bit more dignified with its “RLS” acronym).
But you may have noticed that the number of breakthrough pharmaceuticals for serious illnesses is decreasing. And the question is … why?
Well, Hillary Clinton is one answer. George Bush is another. Politicians scare the hell out of drug companies, almost as much as trial lawyers. And when drug companies get scared, they don't spend as much on research. They hoard their cash, as rainy-day funds for lawsuits and lobbyists. Pfizer (PFE) has $13 billion; Johnson & Johnson (JNJ) of New Brunswick, N.J., $15 billion; Merck (MRK), based in Whitehouse Station, N.J., $9 billion; and Madison, N.J.-based Wyeth (WYE), $8 billion. Swiss drug-maker Roche Holding AG has $17 billion.
But why are drug companies scared of politicians? Because politicians get off on controlling things ... like prices. And when you begin to fiddle with prices, ripple effects go all the way down the supply chain to the point of origin.
For pharmaceuticals, the point of origin is the laboratory, where new drugs are created.
It takes many years to create a breakthrough drug like, say, Lipitor. The payoff is enormous — Pfizer has sold about $12.2 billion worth of Lipitor. But the cost of Lipitor's development was enormous, too. Politicians focus just on the payoff, saying these drug companies don't deserve all that cash. But without the huge incentives of striking it rich, would any company have spent so much time and money developing a drug like Lipitor?
For politicians, incentives don't matter. For the folks who actually invest their own time and money on things, incentives are all that matters.
It's very easy for a politician to rail against drug companies (from whom, by the way, I've never received a dime). Politicians get applause every time they rail against the profits of pharmaceuticals, pointing out that folks are dying because they can't afford the high prices of drugs that cure or control heart disease or HIV. But none of the afflicted would be helped — not the rich, nor the middle class, nor the poor — if the incentives hadn't been there to support the years of research that created the drugs.
Did Sen. Clinton understand that when she pushed the notion that incentives should be removed from health care entirely? Do other politicians who are merely pushing for price controls see that removing incentives could remove the creation of new drugs that could save millions of lives? Or do these politicians just care about an easy to grab stump speech that will help them get elected?
I hate to be overly cynical, but the evidence is overwhelming that the answer is the latter.
E-mail your comments to firstname.lastname@example.org
David Asman is the host of "Forbes on FOX" which airs on the FOX News Channel, Saturdays at 11 a.m. ET.
David Asman joined FOX News Channel (FNC) in 1997 and currently serves as host of "Forbes on FOX," a weekend half-hour program that offers an informative look at the business week (Saturday from 11:00-11:30 AM/ET). Asman is also an anchor on FOX Business Network, where he co-hosts "After the Bell" (4-5 PM/ET) with anchor Melissa Francis.