Go Lance Go. And Pharmaceutical Research, Too.
Lance Armstrong's victory in the Tour de France this week was in part a testimony to the wonders of pharmaceutical research and market incentives.

David Gratzer, a physician and senior fellow at the Manhattan Institute, reminds us that without profit-driven scientific advances, the cycling Texan would not be claiming a record-setting sixth consecutive victory. Likely, he would be dead.

Armstrong, lest anyone forget, was diagnosed with testicular cancer that had spread to his lungs and brain. Thirty years ago, "such a diagnosis was essentially a death sentence. Today, 96% of Americans survive the illness, just as Armstrong did. The biggest improvement in care? Better drugs," which were an essential part to Armstrong's recovery.

It isn't just Lance who has benefited, of course. Since 1974, the overall survival rate of cancer has increased from 50 percent to 64 percent. New drugs have been a key contributor to that increase.

"But here's the irony," Gratzer says. "While medical progress has saved millions and has the potential to help so many more, politics may end up killing the necessary incentives. Between budgetary concerns and populism, politicians flirt with undermining basic patent rights through various price-control schemes and efforts to assist generic drug makers."

Populists decry the wealthy, and the pursuit of profit. But nowhere is the beneficial nature of profit-seeking behavior more clearly demonstrated than in pharmaceutical research. Drug companies rely on profits to fund their operations, and stay in business. Yet somehow they are considered "evil," simply because drugs are costly and they have what demagogues want to give away free.

Yes, life-saving and enhancing drugs are expensive--now standing at $900 million per drug, up from $130 million 30 years ago. One reason lies with the costs of complying with government regulation. Another reason is that the low-hanging fruit has already been picked; as scientists push back scientific frontiers, success comes less frequently, and takes more resources to find.

Price controls and "reimportation" of price controls from other countries won't just kill the goose that lays the golden egg. It could kill cancer victims across the world. (permalink)