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DTC in Perspective: Why We Benefit from Higher Drug Prices

June 3, 2016 by Bob Ehrlich0

Let me cite a headline in a recent 5/27 Associated Press story. “Superbug resistant to last-resort antibiotic found in the United States.” For the naïve critics who want to hammer drug companies who do you think will develop new antibiotics? Will it be the same caliber folks who run the TSA? The Post Office? The Veterans Administration? There are good people in government for sure but they are not wizards when it comes to finding new drugs.

Bob Ehrlich
“Government is very bad at solving problems.”
-Bob Ehrlich

I am afraid that Hillary and Bernie are going to need their hated drug industry to stop us from dying from a bacterial infection from a routine scrape, cut, or infection. I think most Americans have this media driven view that heroes working for government discover cures. Television and movies are filled with CDC or university scientists who discover cures to stop pandemics. Well my friends a Brad Pitt character is not going to save you from Zika or a new plague. The heroes will be named Pfizer, Glaxo, Merck and Sanofi. Of course those working there are never the movie heroes.

Government is very bad at solving problems. They could not develop a web site to enroll Obamacare patients. Do you really think they will save your butt from resistant bacteria? So I gladly support high profits for incentives to develop new antibiotics and vaccines. Incentives work Bernie. You may think drug profits are outlandish but your Medicare for all will guarantee we strip incentives away for break through drugs. It sounds nice to have cheap drugs for all until we get a superbug that none of those price controlled drugs can kill.

Bernie will say we can create some new government funded research organization to do drug development without the dastardly profit motive. With the bureaucratic operation we have seen in government, it is likely that organization will be slow, inefficient, and attract the least talented scientists.

Next time a candidate says drug companies make too much money think again. They actually will keep you alive. You know who makes outlandish profits? How about Hillary charging a university $225,000 for a canned speech. How about George Clooney getting $20 million for a movie role? But drugs are different they say. They are needed to save lives and should be cheap. Yes, they do save lives and that is why we should be happy to provide fantastic incentives to keep us alive.

The nice thing about free market pricing is that in the next pandemic drug companies will supply the good old USA first. The price controlled economies will get what they pay for and will have to wait in line for new cures. Americans may complain about drug prices but will be thankful their money provides incentives to drug companies to keep investing in cures.


Bob Ehrlich

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