BrianGarst.com

Once again confirming that this administration believes that more government is the first, best and only solution to any problem, Obama is proposing billions of dollars in new spending on an activity that ought to be left to the private sphere:

The Obama administration has become so concerned about the slowing pace of new drugs coming out of the pharmaceutical industry that officials have decided to start a billion-dollar government drug development center to help create medicines.

The new effort comes as many large drug makers, unable to find enough new drugs, are paring back research. Promising discoveries in illnesses like depression and Parkinson’s that once would have led to clinical trials are instead going unexplored because companies have neither the will nor the resources to undertake the effort.

The initial financing of the government’s new drug center is relatively small compared with the $45.8 billion that the industry estimates it invested in research in 2009. The cost of bringing a single drug to market can exceed $1 billion, according to some estimates, and drug companies have typically spent twice as much on marketing as on research, a business model that is increasingly suspect.

This is typically unquestioning coverage by the New York Times, as the article never once addresses alternatives to the government’s assumption that private drug makers just aren’t investing enough. Take this sentence, for instance: “The new effort comes as many large drug makers, unable to find enough new drugs, are paring back research.” Now read it with this additional clause I’ve added: “The new effort comes as many large drug makers, unable to find enough new drugs to pay for the costs of investing in research, are paring back research.”

This addition is both accurate and clarifying, and it makes apparent a question both the administration and the New York Times fails utterly to address. Just why is it so expensive to develop drugs that many companies are concluding that it’s not worth as much effort as we might like? The reason neither wants to ask the question is because they know the answer: it’s because of too much government.

The first regulatory authority for what eventually became the FDA was created in 1906, though it initially was placed in the Department of Agriculture.  At the time its authority was mostly over food, with drugs only regulated by their labeling. It wasn’t until 1938 that all new drugs would require government approval, which the law specified must be delivered within 180 days.

The initial relationship between the FDA and the pharmaceutical industry was cozy. As industries so often do, drug makers saw government oversight as a way to get taxpayers to pay the costs of convincing consumers that their product is safe. This relationship changed in the 1960s, when a panic arose over birth defects caused by Thalidomide. As it is wont to do, government didn’t let the crisis go to waste and responded with a drastically increased role for the FDA. This included removing the 180 day approval limit.

The new role of the FDA meant not only would it screen new drugs for safety, but also would require proof that it was effective before allowing it to go to market. This new function, along with the removal of the response time requirement, led to dramatic growth in the amount of time and money required to bring new drugs to market.

The effects were predictable. Drug prices soared, while the number of drugs introduced decreased dramatically (a problem which continues today). Discovering a new drug and meeting the burdensome requirements of proving to the FDA that it meets a completely arbitrary levels of safety and efficacy is now so difficult that companies are simply giving up.

But no where was the cause considered by the learned writers at the paper of record, and it’s doubtful the policy makers ever considered their own hand in the “problem” this new government intervention effort will attempt to “solve.”

So here we are. The problems caused from the excess costs imposed by government are being met by yet more reckless government invasions into the private sector. Does anyone really think government spending on drug research will be even remotely close to efficient, or that it won’t be a massive waste of taxpayer dollars? Sure, they might make some discoveries, but there is simply no reason to  believe the government will allocate resources better than a market that was left unencumbered by excessive government burdens.

At a time when the nation simply has no more money to spend, it is inexcusable that the administration is incapable of addressing the real problem by reforming or eliminating the FDA. Mitchell’s Law, which holds that “bad government policy begets more bad government policy,” is once again confirmed.

Barack Obama FDA