Monday, July 16, 2012

Bending Down the Cost Curve at the Expense of Innovation

The ACA is supposed to "bend down the cost curve" of health care. After all, it is the Affordable Care Act. But consider this from today's WSJ:
Drug makers including Eli Lilly & Co., Pfizer and Johnson & Johnson have spent hundreds of millions of dollars pursuing what could be the first treatments to address the underlying mechanism of Alzheimer's disease.

Soon they'll know whether those bets have paid off and they have the industry's next blockbusters—or just the latest debacles.
. . .
The market for drugs that could treat the underlying process and at least slow the disease's steady march is estimated by analysts to be $10 billion a year or more, up from $3 billion a year currently. Drugs on the market now are considered of limited effectiveness and treat the symptoms of the disease for a limited period of time.

So shouldn't these companies be punished for driving up the cost of health care? Isn't our nation and indeed our world better off if these companies get rewarded with fat profits if they find a cure to Alzheimer's disease. And after sinking those hundreds of millions into the search for such a cure, isn't it just and fair that they should? But this administration will swiftly seek to limit the cost of the new drugs because government is involved in every decision. This could kill innovation. So what's it going to be? Do we want innovation or do we want 1950s medicine, because it was cheaper?

As an added cost, those Alzheimer's patients that survive longer will disproportionately spend more on health care and since government is either funding it through Medicare or subsidizing that expense through the exchanges, isn't that another argument against allowing drug companies to develop new cures? This is just one evil among many with the ACA. Government involvement in cost control creates incentives to limit life saving.

1 comment:

  1. Progressives are grand... population "bombs", eugenics, "womens health", social darwinism, global warming all end up coming back to the same goal... killing people.

    So imagine if you could slow the development of cures in the American system. Humanity falls behind in the race against disease. The poor, weak and infirm die of "natural causes." That is ObamaCare.