Drug Company Profits Are Good for Your Health
Michael Moore’s new movie “Sicko” is a shock-umentary approach to exaggerating the ills of American health care. Still, it guarantees some debate over universal health care will take place this summer.
On the campaign trail, Democrats like former Sen. John Edwards are falling over one another trying to embrace universal care. Most of those plans attack
Industry critics call it "Big Pharma" to associate it with "Big Tobacco." Best-selling books – like "The Truth about the Drug Companies" by the former editor of a prestigious medical journal – argue that the industry is uncaring, duplicitous, profit-hungry, and manipulative. Resentment of the industry is palpable – particularly among the elderly and infirm, who depend on drugs to relieve suffering and prolong life.
American drug companies, particularly in the last 20 years, have extended and improved the quality of life – with such blockbuster drugs as cholesterol-lowering statins, hypertension medications, and a new line of breast cancer drugs that dramatically reduce the risk of recurrence following surgery, radiation, and/or chemotherapy. Why do Americans nonetheless have a bad attitude toward the pharmaceutical industry?
The reasons are complex, but part of the explanation is that media reporting about the pharmaceutical industry reinforces widespread misconceptions about how drugs are developed and how economic incentives affect innovation.
The Business & Media Institute, after a nine-month survey of network evening newscasts, reported that the coverage consistently underestimated the cost of developing new pharmaceuticals and criticized the industry for unjustifiably high prices.
Many in the media (and the general public) embrace
▪ The cost of research and development of a new drug is enormous – more than $800 million by the time the drug receives FDA approval. A substantial number of compounds under investigation never make it to approval, and their costs must be absorbed through money made other products.
▪ New drugs will not be developed and brought to market if there is no economic incentive for investors. To illustrate: if every time a life-saving drug finally came to market, activists and politicians demanded it be distributed free to anyone who needed it, there would be no further miracle drugs because there would be no fiscal incentive for research, development, and running the risk of failure.
▪ If pharmaceutical companies keep pumping out life-saving blockbuster drugs – and reaping huge profits in doing so – it is in fact a win-win situation, for the companies and for all of us who benefit from their products.
▪ Any government form of price control on pharmaceuticals represents a case of killing the goose who laid the golden egg. This applies to legalizing the importation of cheaper drugs from
▪ It is crystal clear that countries with price controls do not have companies that produce new, innovative drugs. The
The message from this Business & Media Institute study is that by consistently appearing opposed to the pharmaceutical industry, the media ultimately hurt consumers. The media, by breeding suspicion that leads to lawsuits and regulations, sometimes damage a system that has fostered the production of innovative medicines – medicines that we all will need some day.
As they report on “Sicko” or follow some of the topics embraced by
Dr. Elizabeth M. Whelan is president of the American Council on Science and Health (ACSH.org, HealthFactsAndFears.com) and an adviser to the Media Research Center’s Business & Media Institute.