Page 17 - Forbes - USA (March 2018)

FACt & COMMENt
“With all thy getting, get understanding”

Great medicine
G r e a t m e d i c i n e
for trade

BY STEVE FORBES, EDITOR-IN-CHIEF

HERE’S A HUGELY winning issue for New FDA head Dr. Scott Gottlieb has been
President Donald Trump that will deal removing obstacles, which is why the rate
with a gross trading abuse and simulta- of drug approvals has more than doubled.)
neously advance his goal of reducing the When a pharmaceutical company sells
prices of prescription drugs: Insist that a new drug overseas, buyers demand a
foreign buyers of American pharmaceu- price that’s a fraction of what American
ticals—almost without exception govern- customers pay. The demand is more in
ment agencies—pay their fair share of the line with a gangsteresque “We’ll make you
research and development costs of these an offer you can’t refuse” process than
medicines. Currently, Americans are subsi- normal business bargaining. The im-
dizing overseas users of our drugs. plicit—and sometimes explicit—threat is
Here’s how that works. The average price that if a company doesn’t cave the country
of successfully bringing a new medicine to market in the U.S. will allow a knockoff of the medication to be produced by
is about $2.4 billion. The entire approval process takes some 12 another company.
years before a drug receives its final green light. The expenses The U.S. should now make fair pricing of American
include all the would-be medicines that fail to make it out of drugs overseas a top trade priority: If you don’t want to pay
the research labs or falter during the Food & Drug Adminis- for our R&D, you won’t get our pills. Period. And if you try
tration’s expensive, time-consuming clinical trials. the imitation game, we’ll take painful retaliatory measures.
Pharmaceutical companies get 20-year patents for their Success with this would mean significantly lower costs
drugs, which means they really have about 8 years of monopoly for American consumers. The publicity surrounding the
power (20 years for the patent minus the 12 years for clearing issue would also educate Americans about how costly—
all the hurdles before a particular prescription can actually be and antiquated—much of our current approval system is,
sold). No wonder the initial price for a new drug is sky-high, thus generating political support for the kinds of reforms
even though the actual manufacturing cost per pill is minus- Scott Gottlieb is pushing at the FDA. A side benefit would
cule. (Ideally, when a drug goes “off-patent,” imitators rapidly be reducing FDA resistance to the president’s desire to let
bring copies, called generics, to market, slashing the price. terminally ill patients have the right to take medications that
Unfortunately, FDA regulations have gummed up this process. haven’t yet cleared bureaucratic hurdles for approval.

Hoover: an extraordinary Life
in extraordinary times
Kenneth Whyte (Knopf, $35)
WiSE HiStoRiAnS knoW better than to pigeonhole commerce secretary, undertook and brilliantly directed a mas-
notable figures—things are often just too complex—and with sive effort to alleviate the immense suffering wrought by the
no person has this been more true than Herbert Hoover, our great Mississippi flood of 1927. Without his decisive interven-
31st president. On one hand, he is one of history’s greatest hu- tion, the loss of life would have been incalculably worse.
manitarians, whose extraordinary and truly innovative efforts On the other hand, in 1933 Hoover left the presidency, after
literally saved tens of millions of people from starvation in Eu- one term, as probably the most vilified and hated individual ever
rope during and after World War I. John Maynard Keynes was to occupy the White House. He was caricatured as cold and in-
not alone at the time in regarding Hoover as one of the most different to the unprecedented human hardships brought on by
outstanding men of his age. In an era when Washington never the Great Depression. This greatest of economic disasters began
involved itself in disaster relief, Hoover, on his own initiative as on Hoover’s watch, and he was seen as incapable of successfully

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