OPINION:
Misguided health care policy has serious side effects. As regulators refuse to approve new medical devices and medicines, venture capital for health care has dried up, and hospitals are running out of some important drugs. It has caused what one analyst has called a serious medicine crash.
James P. Pinkerton, editor of the Serious Medicine Strategy website and a veteran of the Reagan and H.W. Bush White Houses, has been tracking the disturbing trend. He noted a 55 percent drop in Food and Drug Administration (FDA) approvals of new medical devices from 2001 to 2010 and a 63 percent drop in new medicine approval over a longer period starting in 1996. As reported in the trade publication EE Times, “as many as three-quarters of venture capitalists are exiting the health care field as … regulatory hurdles increase.”
The impact is being felt by those seeking medically necessary surgeries and treatments for cancers and other major ailments with 150 drugs in short supply, according to the Chicago Tribune. The Obamacare mentality will only make a dire situation worse. “The whole ethos is to spend less on health care costs, while cures and medical outcomes are much less important to the political culture,” Mr. Pinkerton told the Washington Times. “The grim joke of every actuary is that if people die earlier, you sure save a lot of money.”
Venture capital will not return as long as Obamacare’s impetus toward rationing and discouragement of cures and innovation continues. The president’s health care law, for example, imposes a 2.3 percent excise tax on medical devices that amounts to $20 billion over 10 years. There’s also a $2.3 billion annual tax on innovator drug companies. Critics also say the administration’s disapproval of the drug Avastin to help battle breast cancer provides further evidence that decisions are being made based more on costs than science.
The biggest discouragement of all comes in the form of big-money trial lawyers who see medical companies as the mother lode of jackpot justice. The Supreme Court foiled one such suit in the 2008 Riegel v. Medtronic ruling, which held that a device manufacturer could not be sued if the device already hade been approved after rigorous FDA testing. House Democratic leaders predictably came to the defense of the trial bar and introduced legislation to overturn the decision. While the bill never became law, it sent a message that the risks of innovation might be greater than the benefits.
Treating the medical industry like a pinata has failed to reduce costs. According to Pfizer, the average cost in 2009 of bringing a single new drug to the market was $2.4 billion. Pulling the plug on Obamacare would be a good start to letting the free market focus on developing the best possible medicines and technologies.
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