Why Isn't Congress In The Business Of Making Life Better, Not Worse, For Everyday Americans?

A few days ago we mentioned how musicians who get catastrophically ill-- when they don't die from lack of medical care-- are often driven to financial ruin. We talked about benefit concerts-- more often than not in tiny clubs-- spaghetti dinners and raffles as ways to raise money to save lives. At the same time, Llewellyn Hinkes-Jones was publishing an OpEd in the NYTimes about the other end of the spectrum: gala balls and donor drives to fund drug research-- i.e., the privatization of scientific research.

Tuesday I went to my local pharmacy to refill some prescriptions. The last time I had refilled one was December 8 and the cost was $3.89. Tuesday the exact same generic and the exact same quantity was $77.80. It was one of half a dozen prescriptions I had to refill and their prices had all shot through the roof. When I called Humana to ask what the mistake was, they told me that's how Medicare Part D works. Medicare Part D, the Bush plan that shows exactly what Republican health care is all about. I don't like paying them but I can afford those prices. What do people do who can't? Hinkes-Jones wrote that "instead of decisions about the fate of scientific funding being made by publicly oriented institutions, those decisions are being put in the hands of anonymous philanthropists and ostensibly benevolent nonprofits."

There is nothing to stop pharmaceutical companies from creating their own philanthropies, funding research with tax-exempt dollars and then selling themselves the rights to the intellectual property. Without price controls on the final product that come with public funding, the potential costs of the resulting medicines are limitless.

So far, there is no effort to extend government price controls to venture-philanthropy-derived research. The Cystic Fibrosis Foundation did little to lobby for lower prices on the drugs that were developed from the research it funded. As a result, Kalydeco, a cystic fibrosis medication it funded, is one of the most expensive drugs available, at $300,000 a year.

The idea of a public-private research transfer is not without precedent. In 1980, Congress passed the Bayh-Dole Act, which allowed publicly funded universities to sell off exclusive licenses on their research to private industry. The act was intended to drive funding for academic research and innovation.

But the resulting race for private funding has created perverse incentives to research blockbuster drugs, even if they are not the most imperative from a public policy standpoint. The impetus to produce more and more profitable research has also driven down the quality of academic work, promoting ghostwritten papers, sloppy peer review and the burying of unfavorable clinical-trial results. Venture philanthropy builds off the model created by Bayh-Dole, but with tax exemptions and a sheen of generosity on top of the lucrative payoff.

One argument in favor of venture philanthropy is that it creates a way to sustain small foundations that study rare diseases that, from a for-profit point of view, aren’t worth investigating.

But while Big Pharma might be faulted for funneling billions of dollars into erectile-dysfunction drugs and off-label drug marketing, researching extremely rare diseases may also represent a misuse of public and private funds. Efforts to cure, rather than treat or prevent, obscure diseases can be expensive, diverting investment from more common afflictions. The high costs of focusing on rare diseases are then eventually pushed onto the health care system by way of egregiously high drug prices. Such a choice involves an incredibly complex moral calculus, one that is best processed by democratic public institutions.

To make medical advancements truly philanthropic, the profit motive needs to be removed from the equation. If the intent is to cure rare diseases, then we should be increasing the budget for the National Institutes of Health and other research initiatives. Instead of gala balls and donor drives, higher taxes on the same rich benefactors could be used to fund the research that isn’t already being supported. Biotech patents developed through venture philanthropy should not have exclusive rights attached to them.

This would allow generic versions of drugs onto the market, which would go a long way toward keeping health care costs down and not driving the uninsured into debt.

When the House voted on Bush's Medicare Part D scheme on November 22, 2003, it only passed by 5 votes-- 220-215. 25 Republicans joined nearly the entire Democratic conference to oppose it. The 25 Republicans who opposed it, are against all forms of government involvement in healthcare. And the 16 Democrats who backed the Bush proposal were almost entirely reactionary Blue Dogs, only two of whom, Colin Peterson (MN) and David Scott (GA), are still in Congress-- and still voting for Republican policies that wreck the lives of ordinary working families. The rest were all subsequently defeated or forced to retire to avoid being defeated. As Xavier Becerra explained Tuesday on the House floor, "Congress should be in the business of making life better, not worse, for everyday Americans."