June 7, 2002
The media on drugs
I only watched the promos but apparently Peter Jennings did a hatchet job on the issue of prescription drugs in this country—a story rich with villains and victims I’m sure. Not sure if this says more about Jenning's poor understanding of economics or good understanding of what generates ratings. But it is certainly too broadly felt that drug companies making profits off of people's illnesses is a bad thing when precisely the opposite is true: drug companies make money from helping people get well and this is a good thing (to quote Martha Stewart.) Holman Jenkins, always a great source of a colorful put-down, lets Jennings have it in his latest column.
Whether Americans are getting their money's worth from their sizeable spending on prescription drugs is a good and fateful question. But Mr. Jennings's attempt to indict the pharmaceutical industry by way of pretending to answer it suffers from not a little intellectual incontinence of its own.
On one hand, he blames the patent system for inflated drug costs because it gives companies an "exclusive monopoly for the length of the patent, meaning they can make huge profits. . . No competition is the key point here." At the same time, he assails the industry for churning out multiple drugs to treat the same disease. He even slaps the FDA for allowing "me-too" drugs on the market.
Huh? If companies are racing out products to compete with each other, how is that a monopoly? The problem he overlooks is that the drug industry is embedded in the health-care payment system and becoming more so every day. Some 80% of the nation's drug bill now is paid for by insurance, up from 35% a decade ago. A fair bet is that many people who line up for the prescription pain reliever Celebrex would settle for Advil if they were paying out of their own pockets. Who'd buy a Pepsi for $3 if a Coke could be had for 75 cents? But this problem infects all health-care purchasing decisions, not just prescriptions.
Mr. Jennings claims ABC spent a year on its report, which might seem long enough to have stumbled across what every sentient person understands is the central dilemma of American medicine: How does a system with a vast tax subsidy to channel every ache and pain through the insurance system make sure consumers are careful about bringing cost and benefit into balance?
...He dwells on Celebrex and its competitor, Vioxx, the "super aspirins" whose sales were an astonishing $5.7 billion last year. But he fails to detect that two different makers can't be a "monopoly," especially when competing with dozens of perfectly acceptable over-the-counter substitutes that are far cheaper. Obviously the problem isn't an absence of choice but a failure of patients and doctors to exercise choice based on price.
Name any large class of patented drugs and the word "class" gives away the lie. The anti-ulcer blockbuster Tagamet was followed by Zantac, Axid, Prilosec and Pepcid. The anti-depressant Prozac was followed by Paxil, Zoloft, Luvox and Celexa? How about blood-pressure medicines like beta blockers, ACE inhibitors and calcium blockers? Or cholesterol drugs? Or anti-retrovirals for AIDS?
... Developing a new drug costs gobs of money even if some dispute how much exactly. These costs have to be recouped before a drugs goes off patent, so drug makers charge gargantuan prices for the latest medicines. Worse, they throw most of their research dollars at a few diseases suffered by large, well-insured populations because the generic threat makes it uneconomic to develop franchises treating the illnesses afflicting smaller populations.
ABC's neurosis here is less a matter of ideology than of uncreative method. Everyone from Hillary Clinton to Newt Gingrich is capable of perceiving the sticky dilemmas posed by third-party payership.
But whoever laid out this storyline so Mr. Jennings could perform it in front of the camera never bothered to think the issues through. Instead, having nominated the drug industry as the enemy, they ransacked the clips and assembled a pastiche of borrowed rhetoric based on a single principle: Anything bad about the drug industry must be true and anything true must be bad.
Such is the undiluted essence of malpractice in the opinion journalism business since time immemorial.
...Far be it from ABC to suggest to Americans they might have any role in the health-care problem beyond being "victims" of powerful interests that deny them unlimited drugs at cheap prices. At some point, though, we'll have to reconcile our desire to make everything available to everybody regardless of cost with some kind of mechanism to discipline spending. ABC might have contributed light to this debate but ended up sowing darkness instead.