First the good news — congressional conferees approved the FY 06 Agriculture Appropriations conference report that includes $1.5 billion for FDA, $40 million above the current fiscal year. Now the bad news — that’s $10 million less than the President requested. Now the good news — missing from the conference report is House language regarding importation of prescription drugs. Now the bad news — retained in the conference report was (compromise Senate)language on conflict of interest waivers for FDA advisory committees. That amendment says none of the agency’s funds may be used to grant a waiver of a financial conflict of interest requirement for any voting member of an advisory committee or panel or to make a certification for any voting member. Now the good news (sort of) — the ban does not apply if (1) not later than 15 days before an advisory committee or panel meeting the HHS Secretary discloses on FDA’s Web site the nature of the conflict of interest at issue and the nature and basis of the waiver or certification, or (2) in the case of a conflict of interest that becomes known to the HHS Secretary less than 15 days before a meeting, the Secretary discloses it as soon as possible, but in no event later than the day of the meeting. In addition, none of the agency’s funds may be used to make a new appointment to an FDA advisory committee or panel unless the FDA Commissioner submits a quarterly report to the HHS Inspector General and the House and Senate Appropriations Committees on efforts made to identify qualified persons for such appointments with minimal or no potential conflicts of interest. That’s a whole lot more paperwork for an already overworked and understaffed agency that didn’t even get the full appropriation requested by the President. You want FDA reform? Show me the money.

Here’s a worthwhile article by Alec Van Gelder of the London-based International Policy Network (as seen in today’s Boston Globe).

ALEC VAN GELDER
Patent nonsense on avian flu
By Alec van Gelder

WITH ALL the hysteria surrounding the possible mutation of the Avian flu virus into a form that puts humans at risk, policymakers have subjected us to everything — except common sense. There are no easy solutions to the outbreak that is predicted, and more deaths are likely. Misleading the public and ignoring the outcome of myopic actions is simply not acceptable with millions of lives at stake.

At least 65 people have already perished from a strain of Avian flu called H5N1, contracted from close contact with poultry. A further 100 are believed to be infected. The virus has spread west from Southeast Asia to Turkey and Russia, carried by migrating birds. Those most at risk are people who work closely with poultry in unsanitary, cramped conditions: By definition, these people are poor.

So far, there is no proof that a strand of H5N1 can spread between humans, nor that it will. Yet the hysteria surrounding Avian flu far surpasses that which accompanies the yearly arrival of a new flu strand, which regularly kills hundreds of people. And it far surpasses the attention given to other diseases, such as diarrhea, which claim at least 3 million lives a year in poor countries.

The reason for this hysteria is the prediction that, if this virus mutates into a form transmissible between humans, tens of millions will be at risk — as in the 1918 pandemic that killed 50 million to 100 million people. But what is the rational response to such predictions?

We know that viruses mutate and strike in unpredictable ways. It is plausible that this virus might mutate as has been predicted and that an epidemic — or even a pandemic — might result. Since we cannot predict exactly how, where, or when the virus might mutate, we need a response that is both preventative and adaptive.

Preventative measures might include vaccinating those likely to become infected with both H5N1 and conventional influenza viruses. This would reduce the chances that H5N1 could acquire genes that would enable it to be transmitted between humans.

Adaptive measures might include identifying potential vaccines and treatments for H5N1 and ensuring that these are available for use when necessary.

So far only one medicine has proved effective in treating human cases of H5N1. That medicine, Tamiflu, was developed by the Switzerland-based pharmaceutical company Roche, which owns the patent. Because of the pressure to “do something,” politicians are considering breaking Roche’s patent on the populist premise that this will increase the availability of Tamiflu.

While it makes sense to build government stockpiles of Tamiflu in preparation for a possible outbreak of H5N1, it is far from clear that breaking the patent would be helpful — indeed the opposite is more likely to be the case for several reasons.

First, the raw ingredients for Tamiflu come from a Chinese herb which is in short supply. Unless production of the herb is increased, it will be impossible to increase production of Tamiflu. In this case, breaking the patent would have no impact on availability of the drug.

Second, Tamiflu is difficult to manufacture. Since Roche has developed the manufacturing expertise, it seems sensible to encourage Roche to increase production and/or to help other companies produce the drug under a voluntary license. Breaking the patent through a compulsory license would actively discourage Roche from either producing the drug or lending its expertise, which would be directly counterproductive.

Third, given that scientists have only a vague idea of what a human strain of H5N1 might look like, there is no certainty that Tamiflu will be effective. Even if Tamiflu does work on some people, widespread use would inevitably result in the development of resistant strains. So, either way, alternatives are clearly needed.

Yet if governments break the patent on Tamiflu, no pharmaceutical company is going to want to develop a new antiviral for fear that their expensively developed innovative medicine will simply be stolen without adequate compensation for the tens or hundreds of millions of dollars invested.

In light of the potential threat posed by a human strain of H5N1 or other similarly deadly viruses, there are constructive things that governments could do. First, they could offer to purchase large quantities of vaccines or antivirals that meet clearly defined criteria. Second, they might also offer tax breaks to companies that choose to invest in the development of relevant drugs.

But the most important role for government is to uphold private property rights and ensure that the rule of law applies — which means protecting rather than breaking patents. The alternative — the rule of the mob — would truly be devastating.

Alec van Gelder is a research fellow specializing in technology issues at the International Policy Network in London.

In case you’re not a regular reader the China People’s Daily, here’s an important story with potentially significant implications for DSHEA. Tongjitang Pharmaceutical Co. Ltd. of southwest China’s Guizhou Province signed a contract with Synarc, a US professional drug test service provider, in Beijing on Tuesday. Synarc will carry out clinical curative effect test on a traditional Chinese medicine to treat osteoporosis. It is for the first time a Chinese herbal medicine to be tested in line with western clinical curative effect standards, Qi Guomin, official of Ministry of Health, told Xinhua on Wednesday. Some of the Chinese traditional medicines have passed the FDA’s safety test and been sold as “health food” in western countries, Qi said. The test will be carried out in China under FDA’s criteria and the result will be released in 2006. Note to Congress: When contemplating FDA reform don’t forget the urgent need to reform DSHEA — it’s more than just a stadium in Queens.

New data from IMS Health projects that prescription drug sales will “soar” in the United States next year, fueled in part by a $400 billion expansion of the nation’s Medicare program. IMS forecasts that the U.S. drug market, which already accounts for 43 percent of global pharmaceutical sales, is projected to grow between 8 percent and 9 percent in 2006. Not surprisingly, the media stories have neglected to mention why — or why this is a good thing for the future of the American consumer and the American health care system. The answer is simple — and simply crucial to the macro debate: people with prescription drug coverage use more medicines than those without. Ergo, more people covered equals more medicines sold. Common sense, right? And they’re being sold for the right purpose, because prescription drugs are not an impulse purchase. Despite what politicians, pundits, and so-called advocates would like you to believe, poll after poll of physicians shows again and again that doctors are not prescribing medicines at the request of advertising-bedazzled patients. That is just not true. Period. Docs are prescribing medicines because their patients have conditions that call for pharmaceutical intervention. But the media reports of the IMS data don’t mention any of this and would lead you to believe the opposite. All the reporters seem to be interested in is volume and costs — making it a political rather than a public health story. But, alas, they fail to put either volume or cost into the proper perspective. Nowhere do they explain the underlying rationale that it is far cheaper to treat a chronic condition such as hypertension or diabetes than to pay for the acute manifestations of these diseases (heart attacks, strokes, amputations, etc.) And how do you keep a chronic condition from becoming acute? That’s right, through appropriate use of … medication. That’s the raison d’etre of Medicare Modernization. More drugs, appropriately prescribed and used as directed lower health care costs. And that’s the rest of the story.

Bob Goldberg’s latest …

Yesterday, the House of Representatives took the bold
and courageous step of limiting the amount of money
you and I will get from the federal government to pay
for converter boxes that will allow us to switch our
televisions to digital.

http://www.tvweek.com/news.cms?newsId=8792

In other words, while the GOP decided to spend only
$1 billion which includes several hundred million for
“education (maybe a government toll free number to
walk people through installation and how to use Tivo)
the Dems wanted to spend $4 billion for every
household in the universe. Congressman John Dingell
railed against GOP heartlessness and asserted the $40
cost of the box was a TV tax against the working
poor …

My guess is that most Americans will pocket the money
and spend it on the low cost digital TVs that will
flood Wal-Mart, Costco, etc over the next three years,
which will be on top of the converter rebates cable
companies will offer.

The idea that tax dollars would go to subsidize TV
purchases is almost mind numbing particularly in light
of the fact that the same Congress is hell bent on
saving money on prescription drugs by limiting access
to the newest drugs, destroying generic competition
and slapping price controls on what’s left.

(See my latest rant at
http://www.washingtontimes.com/op-ed/20051025-101035-8437r.htm)

In otherwords, Congress will spend $4 billion so
people can watch Desperate Housewives or the New York
Yankees in high definition (not a bad thing by
itself)but will reduce the amount it spends on better
and newer medicines. Which reminds me of what Mark
Twain once wrote: “G-d made idiots for practice. Then
he made Congress.”

Good news as reported in today’s WSJ article on the meeting of the FDA’s Psychopharmacologic Drugs Advisory Committee — The Food and Drug Administration convened the panel (to discuss an agency proposal that drug makers submit “longer-term efficacy data” on drugs that are used to treat depression, bipolar disorder, schizophrenia and a range of other psychiatric illnesses before they are put on the market.) The panel voted 12-0 against a proposal to require premarket long-term efficacy data for drugs that would treat major depressive disorder. The panel didn’t vote on other psychiatric disorders, but said the FDA should consider each illness separately before implementing a “one-size-fits-all” policy for psychiatric drugs.

This deliberative dozen is helping to disprove the old maxim that “Sanity calms, but madness is more interesting.” If only the same were true in Congress and the media.

The AP reports today that, according to a new report by Express Scripts Inc., a pharmacy benefit manager, consumers, their employers and health plans in the commercial market could have saved more than $20 billion last year through increased use of generic drugs. Dr. Steve Miller, Express Scripts Vice President of Research, said that many people still don’t feel comfortable asking their doctor about generic alternatives to brand name drugs. Miller added that drug advertisements reinforce a brand’s name and image to the consumer. So why is the U.S. Congress trying to kill off “branded” generics? (Note blog entry from 10/25/05.) If, as most experts agree, people trust branded products and question the medicinal value of generics, shouldn’t we want more branded generics on the market? Hello? Pending legislation is going in the polar opposite direction. Rather than robbing Peter to pay Paul, perhaps our elected representatives (in this instance personified by Senator Charles Grassley and Congressman Joe Barton) should call for a more potent consumer education campaign on the safety and efficacy of generic drugs.

Celebrating the centenary of Einstein’s wonder year, we are once again faced with the immutable Theory of Medicare Relativism — when politics wins, patients lose. We are also, unfortunately, faced with the implications of the Special Theory of Medicare Relativism — price controls = choice controls. The most recent example of these dreaded theorems in action is brought to the American people through the proposals of Senator Charles Grassley and Congressman Joe Barton. If the honorable gentlemen get their way, the category of medicines known as “authorized generics” (also referred to as “branded generics”) will vanish — and drug prices for millions of Americans could go up by as much as 17%. (This calculation is based on a comparison of what consumers actually spent on generics during 180-day exclusivity to what they would have spent to purchase the same quantity of generics at higher prices in the absence of a branded generic launch.) The deliverable to the American patient? Higher prices and fewer choices. Needless to say, the Grassley/Barton “modest proposal” is being greedily embraced by the generics industry. And greedy is hardly hyperbole since profits on generic medicines exceed 45% even when there is a competitive branded generic on the market. This is what we get for Medicare modernization? It’s Voltaire’s famous aphorism come to life, “The art of medicine consists in amusing the patient while nature cures the disease.” It would be far better if Chairmen Grassley and Barton followed the advice of Professor Einstein who said, “Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction.” Step up to the plate, gentlemen.

Sidney Wolfe, Public Citizen’s General Secretary of Junk Science has just filed a Citizen’s Petition with the FDA calling for a Black Box warning on ED medications because of 48 events of NAION (non-arteritic ischemic optic neuropathy, a loss of vision that is frequently irreversible). To put this in perspective (something Public Citizen really prefers not to do), during that same period 89 million prescriptions were written just for the little blue pill. In July, FDA advised patients to stop taking the pills and call a doctor if they experience sudden or decreased vision loss in one or both eyes — and to tell their doctor if they have ever suffered an episode of sudden vision loss, because such patients are at increased risk of a second episode. A prudent move. But that’s not enough for Dr. Wolfe who says that the FDA “has once again failed in this responsibility. These drugs need much stronger warnings, especially a black box warning such as the one we have proposed.” Suggesting that Sidney have his eyes examined would only be a partial diagnosis.

The Senate has passed without debate and sent to the president legislation that ends Medicare and Medicaid payments for erectile dysfunction drugs. According to Senator Charles Grassley, “Taxpayers shouldn’t have to pay for certain lifestyle prescription drugs through Medicare and Medicaid.” That may anger enough senior citizens in Iowa to have them call for a special, four-hour election.

Tennessee Williams wrote that, “A vacuum is a hell of a lot better than some of the stuff that nature replaces it with.” My comments refer to the October 2005 issue of Nature. In the article, “Cash interests taint drug advice,” authors Rosie Taylor and Jim Giles accuse many of America’s top researchers and physicians of dishonesty and distortions because of financial ties to the pharmaceutical industry. This slander is based on their “investigation” that uncovered that — STOP THE PRESSES — many top thinkers work with drug companies. It’s a classic example of guilt by innuendo. Nowhere in the article, nowhere, do the authors cite a single instance, not one, of an inappropriate clinical guideline being drafted by conflicted experts or adopted by academy boards “stacked” with “influenced” panelists. Rather the authors spend their time “revealing” financial conflicts of interest. During my tenure at the FDA I was the senior official in charge of advisory committees. We vetted COI issues with severe diligence — and made sure that our decisions were all public. Just because a world-class expert works with industry does not make her persona non grata. We should all want top minds to help direct national medical decisions. And industry has chosen to work with many of those same individuals for a reason — they’re the best and the brightest. The authors do point out that too many conflicts are not disclosed — and that’s a mistake. Transparency is crucial to earning and retaining public trust. The article does make some good points, but mostly it’s garbage. To quote Woody Allen, “I am at two with Nature.”

From the pensive pen of Dr. Sally Pipes:

“We are not prepared for a pandemic,” Health and Human Services Secretary Michael Leavitt said earlier this month. We do, however, face a significant risk of being hit by one. A new strain of the avian flu, known as H5N1, has killed at least 60 people in Asia since 2003. So far, humans cannot pass it to one another — virtually everyone infected caught the virus from a diseased bird.

The risk to people is nevertheless grave. The 1918 Spanish flu epidemic, blamed for 50 million deaths, also started among birds, but it mutated and spread to humans. Scientists fear the same thing could happen now. As an expert epidemiologist recently told the Wall Street Journal, “It龝 not a question of if, but when.” The Centers for Disease Control (CDC) estimates that an avian-flu pandemic could kill between 89,000 and 207,000 Americans. There is no publicly available vaccine for the new strain.

Now that the threat is upon us, the administration says it plans to bolster vaccine production in the United States and purchase huge quantities of antiviral drugs. But the question is: Why weren’t we ready in the first place?

The United States once had a large vaccine industry. In 1957, 26 companies supplied the market for standard children’s vaccines — but now only four companies do. Three decades ago, at least 10 U.S. firms manufactured vaccines to treat seasonal flu. By the late 1990s only five remained. And in 2004, the entire U.S. flu-vaccine market depended on just two companies — a French firm with a factory in Pennsylvania, and a California firm with a factory in Great Britain. Hence, our sense of crisis during last year’s flu season, when contamination at the British plant curtailed supply.

The only avian-flu vaccine likely to be available soon is made by the French company Sanofi-Aventis — the same firm we rely on for seasonal flu vaccines. The Sanofi-Aventis vaccine against H5N1 is undergoing preliminary U.S. government testing and showing early signs of success, but it’s not clear how soon it could be available. California-based Chiron — the one with the contaminated British plant — says it will have an H5N1 vaccine ready for testing by the end of the year.

To develop new and better flu vaccines is well within the reach of science. So why don’t U.S. drug companies, which dominate the global medicine market, make vaccines?

First, vaccines are subject to excessively strict screening by the Food and Drug Administration (FDA). So, for example, FluMist, a flu vaccine delivered via nasal spray, has only been approved for use for people aged between five and 49. It is our youngest and oldest, however, who run the greatest risk of catching the flu. This means that the cost of researching and developing new vaccines is needlessly expensive.

Second, vaccines are very expensive to produce. Using one older method of making flu vaccine, it costs about $300 million to build a factory and takes almost five years to get it completed and inspected. The company that makes FluMist, Maryland-based MedImmune Inc., could produce 20 million doses a year, but only about two million would get by the regulators. Because flu vaccine doesn’t keep, in 2003 MedImmune was forced to discard four million doses of its product.

Third, out-of-control lawsuits have scared companies away from developing and producing vaccines. For example, a researcher claimed in the 1970s that the whooping-cough vaccine caused brain damage. More than 800 lawsuits were subsequently filed in the U.S. against vaccine makers. Scientists later proved conclusively that there was no link between the vaccine and brain damage, but by that time the manufacturers were already out of business.

If companies stood a chance of recouping their investments, all these high costs of doing business might be manageable. Government price controls, though, make getting a return next to impossible. The Vaccines for Children Program was the final nail in the coffin of the American vaccine industry. Established by the Clinton administration in 1994, it established a single-buyer system for children’s vaccines. The government now buys 57 percent of all childhood vaccines, forcing steep discounts on manufacturers.

In short, litigation, regulation, and price controls have strangled our ability to prevent deadly diseases, among them avian flu. It doesn’t have to be this way. America leads the world in making medicine. Pharmaceuticals created by U.S. firms have made our lives longer, more comfortable, and more productive in ways our forefathers couldn’t have imagined. People everywhere clamor for AIDS and cancer medications invented in the United States. If we remove the red tape that has choked off vaccine production, we could have a healthy vaccine industry too.

Here’s another (prepublication) paper. We’re not called DrugWONKS for nothing.

Download file

Dan Carpenter, in the October 18, 2005 issue of Health Affairs, proposes financing post-marketing drug safety studies by augmenting FDA user fees. That’s just PDUFy. Why add (by Carpenter龝 own calculation) 25% increased cost to the process when a more expeditious route is to empower FDA with the enforcement authority required to compel post-market commitments made during the initial approval process. Carpenter’s modest proposal would certainly provide a lot of work for idle academics, but not much in the way of enhanced patient safety. Maybe its time that we kept our powder dry and kept sponsors to their NDA-phrase promises. For more thoughts on the Carpenter article, please click on “comments” below for a thoughtful response from Bob Goldberg of the Manhattan Institute.

Senator Charles Schumer (R, NY) weighs in on the Tamiflu issue with the following perspective; “The problem is not the expense of the drug but rather the shortage of supply, which would immediately be rectified if other companies were able to produce it.” Well, kind of. “If” only it were as simple as gearing up mass production of Tamiflu the problem would indeed be helped, if not “immediately rectified.” But, unfortunately, it’s not so simple. Mark Twain said that for every complicated problem there is usually a simple solution — and it’s usually wrong. And Tamiflu production is extraordinarily complicated. We’re not talking about a toaster that can be mass-produced by anyone, anywhere in the world at any time. The Senator went on to say that the manufacturer of the drug, Roche, should be compensated fairly for giving up its rights over the drug. “I deeply respect the investment Roche has made in order to bring Tamiflu to market, but am confident that there is a way to both serve the public need and ensure that your company receives compensation,” he said in a letter to the company. Glad to hear that a well-respected United States Senator respects intellectual property rights. That’s a good point of departure. I wish the same could be said for rogue Indian patent thieves, the World Health Organization, and the Secretary-General of the United Nations.

Representatives Waxman and Slaughter just announced their co-sponsorship of HR 839, the “Restore Scientific Integrity to Federal Research & Policymaking Act.” Now, while I certainly object to the “restore” bit — I do agree with much of the verbiage, to wit: “Appointments to scientific advisory committees shall be made without regard to political affiliation, unless required by federal statute.” Also, that federal agencies would be required to ensure that “no individual appointed to serve on a federal advisory has a conflict of interest that is relevant to the functions to be performed, unless such conflict is promptly and publicly disclosed and the agency determines that the conflict is unavoidable.” During my tenure at the FDA I was the senior official in charge of advisory committees and I’m here to tell you that what Henry and Louise are advocating is already status quo ante Grassley. But there is one conflict that I need to make known — my wife and Representative Slaughter’s daughter roomed together in college.

It is time to take off the gloves and prosecute stupidity. Looking at it from a different, more proactive angle, it’s time for tort reform. After all, as Forrest Gump so aptly put it, “stupid is as stupid does.”

Our courts are over-crowded and under-funded. Auto insurance and professional liability rates are too high. And, unfortunately, our personal responsibility levels are too low. A New York man sued McDonald’s, Burger King, Wendy’s, and Kentucky Fried Chicken for contributing to both his obesity and his related health problems. I wonder if he took Vioxx?

The man may be fat, but his attorney is a fathead, a very wealthy fathead. If we are going to prosecute stupidity, we will have to make it a misdemeanor (since our courts and jails are already over-burdened), but let us make enabling it a felony.

Keeping in mind the immortal words of former congressman and convicted felon James Trafficant, “Beam me up, Scotty,” consider this editorial from the 10/16/05 edition of the Business Review of Western Michigan:

Contraindicative Rx

If some state lawmakers have their way, drug makers in Michigan will lose their shield against consumer lawsuits. That’s a tough pill to swallow. The bills, which last month passed the House on an 89-17 vote, would repeal a 1996 state law that protects drug makers from liability if their products meet U.S. Food and Drug Administration safety and labeling standards. The bills’ Democratic sponsors are emboldened by last month’s Texas jury verdict against Merck and Co., which marketed the pain killer Vioxx. The jury awarded the widow of a Vioxx user $253.4 million. But here’s one fact to remember: The Michigan protection does not apply if a company intentionally withholds information or makes misrepresentations to federal regulators. While we worry that a lawsuit shield prevents a drug’s users from seeking every angle of recourse against a company that brings to market a drug with unintended ill consequences, the process of researching, developing and receiving approval to market a drug takes several years. What Michigan may do while trying to provide recourse for consumers is erode business protections against meritless lawsuits. What’s more, eliminating the drug-company immunity sends the wrong message as the state seeks to keep what remains of Pfizer’s facilities in western Michigan and elsewhere in the state and attract investments from life-sciences companies — a topic that came up in Business Review’s May 25 quarterly forum in Kalamazoo and Sept. 14 forum in Grand Rapids. After all, life sciences is a logical extension for protection. “We’ve got to protect the rights of consumers and make sure people who are negligent, and wantonly negligent, are punished,” state Rep. Bill Huizenga, (R, Holland),told Business Review. “On the flip side of that, we need to make sure companies are able to be innovative.” Huizenga, chairman of the House Commerce Committee, said removing immunity tells the pharmaceutical industry — and life sciences, too, we say — that Michigan business law is going backward. Here’s our prescription for lawmakers — take a dose of reality, give it a rest and call us in the morning.

Frivolous lawsuits do nothing to educate the American public about better health care. In fact, they trivialize such important efforts. What’s most disturbing, however, are the effects such lawsuits have on our diminishing view of personal responsibility and warped perspective on blame. Blame is what people do when they find themselves on the wrong end of the risk/reward equation. Blame supposes fault and as Plutarch wrote, “to find a fault is easy, to do better may be difficult.”

If we do not stand up for what’s right and what’s needed, then we will live to see a thousand Michigan’s bloom.

Disconcerting news from the subcontinent. “Right or wrong, we’re going to commercialize and make oseltamivir,” (Oseltamivir is the generic name of Tamiflu) said Dr. Yusuf K. Hamied, chairman of Cipla of Bombay. Well, since you asked, it’s wrong. It’s IP theft. It’s trading profit today for health care innovations tomorrow. It’s profiteering. According to Roche, making the drug involves 10 complex steps and would take another company “two to three years, starting from scratch,” to produce it. Dr. Hamied dismissed that claim, saying that he initially thought it would be too hard but that his scientists had finished reverse-engineering the drug in his laboratories two weeks ago. Dr. Hamied said he would sell generic Tamiflu “at a humanitarian price” in developing nations and not aim at the American or European market. I wonder if this includes Illinois?

Here’s a new and insightful piece by Benjamin Zycher, Ph.D.

The greater the power to redistribute wealth wielded by government, the stronger the private-sector incentive to circumvent it, and so ever-expanding is the power that government must grasp. Nowhere is that eternal truth clearer than in the ongoing debate over the importation of pharmaceuticals subject to price controls overseas. Such legalized importation would be one way for those favoring such price controls — a blatant wealth transfer from the future to the present — to have that cake without actually having to vote for it, and thus having to bear responsibility for the ensuing adverse effects on current and future human suffering.

Under a system of reimportation of price-controlled medicines, the pharmaceutical producers, understandably seeking to protect the economic value of their investments and thus their ability to develop new medicines for the future, would have incentives to limit sales into the various foreign markets, so that foreign governments in effect would not determine pharmaceutical prices in the U.S. And the foreign governments, interested in preserving adequate supplies of medicines for their own populations, have made it clear that they cannot serve as pharmacies for Americans.

And so having shunted aside both the serious counterfeiting/safety issues attendant upon the drug importation system now contemplated, as well as the implicit, but huge, erosion of intellectual property rights inherent in the price controls, the Congressional proponents of such importation now must confront the unwillingness of the foreigners to serve as the price control middlemen for the U.S. market.

And confront it they have. The current proposals to allow the importation of pharmaceuticals subject to foreign price controls include provisions forcing the producers to sell to the foreign governments all the drugs demanded at the controlled prices.

Where to begin? This means that foreign governments —- or more specifically, the foreign governments imposing the tightest price constraints — will be given the power to set prices in the U.S. Do we want the future of U.S. medical technology to be determined by political pressures overseas and/or by bureaucrats in Ottawa or Brussels or Brasilia? Apparently, some in the U.S. Congress do indeed. And precisely what is the economic value of any given pharmaceutical patent when that economic value in the U.S. can be confiscated by foreign politicians, whether elected democratically or not? So much for the future of pharmaceutical investment and innovation — the research and development process takes over a decade, and what investor wants to bet on political outcomes not only in the U.S., but anywhere in the world? — and thus for the future development of cures.

And let us have no nonsense about the importation of pharmaceuticals subject to price controls as a manifestation of “free trade.” Forced sales at controlled prices are no more consistent with the principles of free trade than the purchase of stolen merchandise from the back of a truck would be consistent with the principles of free enterprise. Thus is the forced sales approach a blatant violation of the Takings Clause of the 5th Amendment, as the price controls would transfer the property rights inherent in patents from pharmaceutical producers and future patients to current interest groups (a blatantly private use) without any compensation whatever, whether just or not.

The last time I read the 13th Amendment to the Constitution, it said something rather sharply unfavorable about involuntary servitude. The forced sales proposals would mandate that pharmaceutical producers sell all that is demanded at the prices dictated overseas, without recourse to the ordinary processes of negotiation, let alone legal institutions. Thus would American firms be forced to serve foreign masters — literally — on terms dictated by foreigners. And let us not forget the “nondiscrimination” dimension of the forced sales gambit: If, say, the German Sickness Funds buy 30 million doses of a drug at a given price, would the pharmaceutical firm be forced to sell an identical quantity at the same price to anyone else in Germany? That the answer is not clear — it might very well be “Yes” — reveals a good deal more about the forced sales idea than its proponents would like us to know.

And is there any reason to believe that such forced sales would be limited to drugs? If U.S. politicians can transfer wealth to their constituencies in the form of “cheap” pharmaceuticals, why not do the same for a myriad of other goods that require massive up-front investments?

So there we have it. Fewer medicines. U.S. markets held hostage to foreign political pressures. A wholesale destruction of the Bill of Rights. Government of, by, and for the People — Sovereignty — cast to the winds. Such are the inexorable outcomes yielded by politicians and bureaucrats in hot pursuit of wealth redistribution, the larger adverse implications be damned.

Having just returned from Geneva, all I can say is that, as far as health care policy is concerned, it’s HQ for EuroDisney. During my brief sojourn in the city of chocolate, private banks, fine watch movements and Jean-Jacques Rousseau, UN Secretary-General Kofi Annan dropped in for a surprise visit at the World Health Organization. While at WHO he said that the UN would be “encouraging pharmaceutical companies and others to be helpful, making sure that we do not allow intellectual property to get in the way of access of the poor to medication.” Since there is unanimous global agreement that every corner of the globe deserves access to avian flu vaccine, what about a statement from the UN chief reminding the world that it is precisely because of IP protection that we have a treatment at all? It’s truly frightening that the SecGen, his fellow travelers at WHO and the other bureaucratic ticket-takers at acronym-laden EuroDisney/Geneva are willing to not only condone attacks on IP as the great divide of the 21st century, but to promote a siphoning off of the fuel that drives the engine of pharmaceutical innovation for a few column inches. It is short-term thinking of the most dangerous kind — the kind with consequences. Perhaps it’s time for Kofi Annan to take a refresher Econ101 course. Perhaps it’s time that he talks to the invisible hand.