Top 10 Letters
Decoding Gephardt, doubting Blair, doing drugs, and more.
12:00 AM, Aug 4, 2003
An additional problem associated with reimportation that Fred Barnes does not mention is that it helps fuel the drug diversion trade. Drug diversion occurs when pharmaceuticals are taken out of the normal distribution chain and put through a series of complex and often illegal transactions prior to being dispensed. Drug diversion allows for adulterated, counterfeit, and improperly handled pharmaceuticals to enter the market, endangering patient health and providing a black market supply for drug abuse.
The Center for Regulatory Effectiveness (CRE)has just released a white paper discussing the drug diversion trade, including how to combat it through improved regulatory policy. We have posted the paper, Dirty Deals: The Drug Diversion Trade, How it Victimizes the Vulnerable and How to Stop It.
--Bruce Levinson, Director, Pharmaceutical Policy Project, The Center for Regulatory Effectiveness
Larry Miller thinks Tony Blair is "quite a guy" (A Very Special Relationship). Too bad Miller didn't look past the superficialities of Blair's recent speech--"freedom," "courage," "destiny"--to its real point: That "terrorism will not be defeated without peace in the Middle East between Israel and Palestine. Here it is that the poison is incubated."
Blair's point, in other words, is that Islamic fanaticism around the world is really all about Israel. A plea by one friend to sell out another may warrant an enthusiastic response--but it isn't applause.
Irwin M. Stelzer omits the most significant reason why the bond market crashed after Greenspan's address to Congress (It's Bond; Falling Bond). The key for bondholders at these levels has been the "assurance" that the Fed would remain open to "unconventional methods" of avoiding deflation--namely the purchase of long-dated Treasuries. Why would traders purchase 10-year notes with yields of 3.2 percent? Because "unconventional methods" involving the purchase of 10-years also came with the possibility of "fixing" long-term rates around 2.9 percent. When Greenspan suggested that he didn't see any need for "unconventional methods" and, instead, suggested that the current Fed funds rate manipulation would suffice, the only reason for buying 10-year notes with 3.2 coupons was gone. And so were the bulls in the Treasury market.
I agree with Fred Barnes that the drug reimportation bill is a bad idea, but for different reasons than he gives. Most conservatives espouse the importance and sanctity of the free market, and it is tough to describe the pharmaceutical market as truly competitive. The figure Barnes cites about 57 out of 64 anti-AIDS drugs being the product of private research alone is at odds with my understanding of most drug design and research. Funding from the NIH does not play a minor role; it is the primary force leading to drug development. The tens of billions of taxpayer dollars spent by the NIH to support close to 40,000 grants each year are the giant shoulders of scientific context on which drug companies stand. A 2002 review in the New England Journal of Medicine showed that about 85 percent of the research performed to design the top 40 or so blockbuster drugs was conducted in public academic centers with public research dollars. A true conservative would not pay for the same drugs twice.
As for free trade and the free market, I cannot think of another industry with more influence over legislation to isolate itself from competition. Each congressional session seems to have a new item tucked into a larger bill that clobbers generics with patent-extending smoke and mirrors.
The drug industry itself admits spending more on marketing than research and development. The development half of R&D usually includes rebates (read: kickbacks) made to physicians for prescribing a specific drug, cruises for specialists and their families, conferences doubling as coercive sales pitches, television advertisements, and payments to the private companies set up with the sole purpose of conducting supposedly objective clinical trials of the newest drug off the line. All of this spending is still in addition to the obscene profits the drug giants have posted in the past two decades. How many other industries had 10-percent-plus profit margins from 2000 through 2002?