Guest Poster Doug French summarises Dr Mary Ruwart's recent explanation of how US pharmaceutical regulations have killed millions.
Physician Mary Ruwart told a crowd at the famous New Hampshire 'Porcupie Festival' over the weekend just how badly government has mucked up health care in her talk, titled The ONLY Solution to the Health Care Crisis. Dr. Ruwart worked for pharmaceutical company Upjohn for 19 years. Her talk focused on how costs have accelerated due to government regulation. In her view, regulations are 50-90% of costs in the pharmaceutical area.
The nation's collective health took a turn for the worst with the Kefauver-Harris Amendment in 1962. Before then, drugmakers had to prove only that their products were safe. With the passage of Kefauver-Harris, drugmakers had to prove their drugs were not only safe, but that the drugs worked.
This might not sound major, but Ruwart says what this did was expand the window to gain approval from the Federal Drug Administration (FDA) from an average of 4.5 years to 14-15 years. This tripling of approval time has forced drugmakers to shift costs from innovation to development.
How many people have died because companies don't create new lifesaving drugs? Who knows? As Frederic Bastiat explained in his "broken window fallacy" and Henry Hazlitt made clear in Economics in One Lesson, there are costs that are incurred and distortions created by government policies that are impossible to quantify, but should never be ignored. However, Dr. Ruwart takes a stab at what the 1962 amendment has wrought. She says it has killed 100 times more people than it has saved.
In a 2005 piece for LewRockwell.com, Dr. Ruwart estimated, "The amendments might have saved, at best, 7,000 lives. In contrast, many more died waiting the extra 10 years for lifesaving drugs. According to my calculations, about 4.7 million people died over the last 40 years while the lifesaving drug they needed was tied up in regulatory red tape!"
Eighty-five percent of pharmaceutical costs are due to Kefauver-Harris, she said. Which means that prescription you're now paying $100 for would be $15 if not for the amendment. The good Dr. Ruwart says it has single-handedly doubled total health care costs and has made treatment, instead of prevention, the norm.
If a drug isn't a slam-dunk, like, say, Viagra, it won't be developed. When a new drug is developed, a patent is obtained and then approval from the FDA is sought. But in many cases, the timeline for approval is too long, and the patent window will close before costs can be recovered.
Just like everything else, life and death is an economic matter. While government thinks it is saving sick people from deadly drugs, many, many more are dying because breakthrough drugs are being kept from the market. Only government bureaucrats would think it makes sense to keep a potential lifesaving treatment from a sick person for fear the drug might kill them instead of the disease.
Dr. Ruwart related a personal story about a drug she filed a patent on to treat fibrotic liver disease with prostaglandins. An FDA examiner called her personally. "You must encourage your company to develop this product," he insisted. "We lose 100,000 people each year to fibrotic liver disease, and we have absolutely nothing to offer."
However, the Kefauver-Harris Amendment demanded especially long, difficult, and expensive studies. As she said, "If we guessed wrong the first time and had to repeat years and years of studies, our patent would run out and we'd never recoup our investment. In spite of the FDA's support, we had to abandon this potentially lifesaving drug."
The health care crisis can be solved only with deregulation. Instead, 906 pages of Patient Protection and Affordable Care Act regulations are being thrust upon the US ...