Morton Marcus: Big Pharma’s dubious ‘chain of other costs’

Morton Marcus

My neighbor Phil Pillpusher was raking leaves when I stopped. “Congratulations,” I said. “Just heard about the new miracle drug on the news.”

“Yeah, blockbuster,” he smiled. “Going to be big once OxyBoZo is in the heads of doctors and their patients”

“That’s where your job comes in,” I smiled. “Get those ads on TV telling folks to ‘Ask your doctor about OxyBoZo’ and the cash rolls in.”

“It’s a great example of how research keeps Big Pharma getting bigger,” Phil beamed. “Our social scientists found that 96.3% of all men have been identified by their loved ones as Bozos at some point in their lives. Then 92.8% of those 96.3% want to be free of that bozo identity, safe from Bozoitis.”

“So this will be a popular drug for a social discomfort, not a real physical or emotional malady?” I said.

“Exactly,” Phil confirmed. “It’s just the kind of product that could be kept from the market if Congress allows Medicare to negotiate prices for pharmaceutical products.”

“You pharma guys hit that point hard.” I observed. “But I hear VA gets lower prices for veterans and federal employees get lower drug prices on their health insurance. Big Pharma doesn’t seem to be suffering.”

“Oh, no,” Phil said. “Industry leaders and analysts have made it clear there will be serious consequences if government forces negotiations.”

“But it’s all rhetoric without evidence,” I said. “Consider this from a Heritage Foundation writer: ‘There would be a chain of other costs: billions of dollars in averted research and development expenditures by drug makers, forgone investment in an untold number of new drugs, and the considerable loss of valuable research and science jobs.’*

“Those thoughts were published in 2007, and the same fantasy arguments are being made again today,14 years later. Sadly, the headlines and the stories written about this subject don’t question industry flakes and flacks who confidently predict disaster, if drug prices were lower.”

“You are playing with fire,” Phil fired back at me. “Society demands advances to battle the ravages of disease. Don’t forget the struggles against orphan illness.

“Right, battle, ravages and struggles. Warlike language taking advantage of human misery. Drama and theatrics to pad the profits of Big Pharma” I responded.

“Unfair!” Phil proclaimed.

“How much does your industry spend on spinning facts, on lobbying legislators, and advertising to a gullible public?” I asked.
“Well…” he offered. But I was rolling. “And why do three very conservative Republican U.S. senators want an investigation of the way pharma companies spend the incentives the federal government gives the industry to do research on those orphan illnesses?” I asked.

“Weren’t you headed home? Well, go,” Phil pleaded.

*Greg D’Angelo, research assistant in the Center for Health Policy Studies at The Heritage Foundation. April 11, 2007.

Mr. Marcus is an economist. Reach him at [email protected]. Follow his views and those of John Guy on Who Gets What? wherever podcasts are available or at