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Not long ago, the names and uses of new pharmaceuticals was an esoteric subject discussed by few outside of the medical community. The public’s exposure to the names of these drugs was limited to scribbles on doctors’ pads and the labels of their prescriptions. Conversely, today the average American not only knows the names of new pharmaceuticals like Viagra and Celebrex, but demands them in consultation with his physician. In fact, a doctor’s willingness to write the prescriptions desired by his patients has become a criterion on which he is judged.
The recent spate of epistolary anthrax attacks has brought this dynamic to the forefront of American public policy. As the only drug approved by the Food and Drug Administration (FDA) to combat the potentially deadly form of anthrax, Cipro vaulted from media obscurity to ubiquity. But as a patented medicine, Cipro is among the most costly antibiotics on the market.
The Cipro hysteria is instructive for those who wish to understand the ways politicians eager to please constituencies, drug companies chiseling for advantages in nascent markets, and FDA regulators quick to assert their authority, have all manipulated the institutions of government to pursue their own interests instead of those of consumers. As a result, our nation’s health care system is plagued with rising costs, declining care, and a parasitic plaintiffs’ bar that regards the serious business of health care as nothing more than a trough at which to feed.
In recent years, the American pharmaceutical industry has come under fire for its increased use of television commercials to stimulate demand for its patented medications. In 1998, the FDA relaxed regulations on advertisements that required drug manufacturers to include a "brief summary" of a drug’s risks and potential side effects if that drug was to be mentioned by name. As a result, the television and radio airwaves have become flooded with ads for patented medications like Viagra, Zocor, Claritin, Celebrex, and many others. In 2000 alone, the major pharmaceutical firms spent more than $2.3 billion to tout their "wonder drugs" through the broadcast media.
But the effect of these ad campaigns has been marginal compared to the Cipro media blitz of the past few weeks. In a "Today" show interview following the discovery of Anthrax in a letter addressed to him, NBC’s Tom Brokaw actually brought his prescription of Cipro on to the set, referred to it multiple times, and insinuated that his health was assured thanks to the contents of the bottle. Countless other news reports have tried to assuage anthrax fears by exalting Cipro.
Although many researchers considered penicillin, erythromycin, and variants of tetracycline to be more cost-effective treatments for pulmonary anthrax, Bayer AG presented an FDA advisory committee with evidence suggesting that strains of "anthrax have been biologically engineered to resist those drugs" making Cipro, which is still under patent for another year, "the best choice for initial treatment." Under Congressional pressure to address the matter quickly, the FDA agreed and in November of 2000 approved Cipro as the only drug suited to combat all forms of anthrax.
This rash decision was emblematic of an agency ill suited for its role as guardian of public health. While few argue seriously for an end to the FDA, it is important to recognize that its regulatory decision-making process is as likely to fall victim to competing commercial interests as that of any other government agency. Pharmaceutical research and development is big business; to believe that FDA administrators are somehow above the fray or incapable of being persuaded by corporate interests is naÃ¯ve. A better system would grant licensed doctors more flexibility when prescribing medicines, with full knowledge of their own civil liability should they be found guilty of gross negligence.
Some commentators have suggested that Bayer is now profiteering from the recent attacks and Senator Chuck Schumer (D-NY) has called on the federal government to bust Bayer’s patent and purchase enough generic Cipro for the entire nation. Essentially, Schumer wishes to "solve" the problem by federalizing it and leaving the future of drug development to un-elected bureaucrats. This sort of reflexive liberalism would be amusing, were it not seriously promoted by a United States Senator.
In an effort to mollify some of these concerns, last Thursday the FDA added doxycycline to the list of approved drugs to combat all forms of anthrax and, later in the day, the American Medical Association (AMA) cautioned its members against over-prescribing Cipro. But the media frenzy surrounding Cipro and the desire of some policymakers to trample patents when they become inconvenient has raised some interesting questions.
First, it is important to recognize that a patent does not guarantee sales or profits; it simply defends its holder from unlicensed downstream reproduction for a specified number of years. But when the FDA approves a single drug for a disease or illness, it creates a monopoly, whereby no competing pharmaceutical or bionic may act as an alternative treatment. As could be expected, drug companies compete vigorously for FDA approval and attempt to use the regulatory process to dominate prospective markets.
Courts have ruled that drug companies have a 1st amendment right to make information about their products directly available to consumers, so a return to the days when knowledge of pharmaceuticals was the province of medical professionals alone is clearly unconstitutional. In fact, much evidence suggests that more advertising actually lowers overall prices because it leads to better informed, more discriminating consumers.
But even in a world of less onerous regulatory oversight, where doctors are free to prescribe and drug companies are free to advertise, there are still important policy questions to be answered: Who should determine when a patented drug should be used instead of the generic alternative? And who should be responsible for paying the difference in price between the two?
Unfortunately, right now there is no easy way to answer these questions because they stand at a gnarled intersection of the interests of doctors, insurers, lawyers, drug companies, and patients. Responsible doctors who prescribe acetaminophen when their patient wants Celebrex lose business; insurers who refuse to cover the cost of brand name drugs are threatened with lawsuits, and patients who either lack insurance or are subject to biological attack are not expected to bare the cost of life-saving medical treatment.
But this system cannot long endure. Consider the impending crisis in American health care: Health insurance premiums are rising by over four times the rate of inflation; Medicare is estimated to collapse under its own weight in under 25 years; aggregate prescription drug spending is increasing at well over 12 percent a year; and the threat from bioterrorism is expected to add tens of billions to annual federal health care spending.
America will soon be faced with a choice between free market reform, where individuals are forced to base medical consumption on the actual cost of treatment, or Soviet-style, top-down rationing. The way policymakers react to the anthrax scare can be very revealing about how they will respond to the fundamental choice we will soon face as a nation. If citizens are made aware of the anti-consumer disposition of some of their elected officials, it may be a small silver lining to this horribly tragic dark cloud.