Posts Tagged: "Healthcare"

The Fraction-of-a-Fraction Problem—Why the Math Doesn’t Support Blaming Drug Patents for the High Cost of U.S. Healthcare

Healthcare costs in the United States continue to rise, placing an ever-increasing burden on patients and government payer programs. Popular discourse blames patented drugs as the culprit for these rising costs. In a move that previously would have been unthinkable, policymakers have even called upon the Department of Health and Human Services to exercise a mechanism known as Bayh-Dole “march-in” rights, to break the patents on drugs that the private sector has spent billions developing, in order to lower their prices. But this fixation on patents as a major driver of America’s medical spend is misplaced.

The Great Digital Healthcare Reset

While the COVID-19 pandemic has changed every aspect of our lives, digital transformation in healthcare has accelerated above others. The pandemic has changed the healthcare delivery paradigm from human to digital platforms faster than Klaus Schwab could have imagined. In 2016, the World Economic Forum chairman coined the phrase “Fourth Industrial Revolution,” envisioning the combination of fourth industrial-era technologies in hardware, software, and biology, or cyber-physical systems. These new technologies, leveraging advances in communication, connectivity, and computing power, would usher in a more efficient way to live, work, and socialize. Who knew how the horrific circumstances triggered by a global pandemic could accelerate an evolution that might have taken 20 years and condensed into a single year. Healthcare has gone digital, and there is no going back now.

The Price of Price Controls: Innovation Likely to Suffer in Drug Pricing Debate

Is Congress really going to do anything useful with respect to lowering drug prices? When the question is presented that way the answer almost seems painfully obvious. Of course not. The question is just how bad they will mess things up, and will they destroy the incentive to innovate as they attempt to seek a very worthwhile solution for the problem of growing costs for healthcare. Unfortunately, the political climate in the United States has increasingly become more circus and circumspect than bold and visionary. It is better to do something entertaining and memorable that plays to the crowd than to go about the business of governing the country, not just for the moment, but for the future. And the political structures in place create outright gerrymandering that practically ensure the overwhelming percentage of Representatives have more to fear from a primary challenge than from a contender in the general election. It is no wonder nothing truly useful can get accomplished in Washington, DC.

Price Controls and Compulsory Licensing Reduce Patient’s Healthcare Options

Once we go down a path of government price controls and compulsory licensing we will have foregone opportunities for other, more rational policy choices and will soon find ourselves in a race to the bottom. Of course, making prescription drugs more affordable must be an important, shared goal. But the solutions we pursue cannot risk choking off America’s innovative ecosystem that leads the world in discovering new cures and treatments. As Nobel laureate and NIH Director Harold Varmus said in 1995, one must first have a new drug to price before one can worry about how to price it.  Letting our federal government import foreign price controls and expropriate patents is not the way to go about it.

Capitol Hill Roundup

This week is a very busy one on Capitol Hill where hearings on various subjects related to technology and innovation are concerned. The House of Representatives will hold hearings on Chinese threats in innovation supremacy as well as nuclear energy and the American Innovation Act of 2018. The Senate will host hearings focused on quantum information science, consumer data privacy and reducing health care costs through innovation. Both houses will hold hearings to look at activities going on at the nation’s space exploration agency, NASA.