Political MoJo

Dean Baker's post on why the U.S. government should strip Roche of its Tamiflu patent is all well and good—along with his rant on the evils of the pharmaceutical industry—but the real action's all in this old paper he wrote on alternatives to our current method of financing drug innovation. Why doesn't the patent system—which allows drug companies to sell their little pills for 300-400 percent of the marginal cost in order to recoup their "research" investment (or at least that's the line they have us swallow)—work very well? Well:

[T]here are very good reasons - well known to all economists -- for preferring that drugs be sold in a competitive market with the price approximating the marginal cost of production. The gap between price and marginal costs under the current system of patent supported research leads to large and rapidly growing distortions. This includes denying drugs to patients who could afford them if they were sold at their marginal cost, the distortions also include the tens of billions of dollars spent each year on promoting drugs.

Even more serious is the incentive that monopoly pricing provides firms to conceal or misrepresent research findings. Finally, a large gap between price and marginal cost will inevitably lead to the production of unauthorized versions of patent protected drugs. While these unauthorized versions make drugs available at a lower costs to patients, their quality cannot be ensured since illegal markets are unregulated.All very real problems, these, and one can note that this sort of protectionism matters much, much more than the various trade barriers people get agitated about. Now obviously we can't just junk the patent system; companies need some incentive to invest in research. But sure we can think of alternatives that work better. Baker lists a couple, including Dennis Kucinich's proposal to get rid of drug patents and steer about $25 billion in taxpayer money (about what Big Pharma claims to spend on research) to government-backed research organizations, similar to the current NIH (or the research universities of yore), and socialize drug research. More on that in a bit, but the point here is that any financing alternative will have to achieve four main things:

1. provide incentives for pursuing "useful" research
   
2. minimize the possibility that market distortions will create incentives to pursue less useful lines of research
   
3. minimize the risk that political interference will direct research spending to less useful ends
   
4. minimize the incentive to suppress research findings

Obviously it's tricky to decide what is and isn't "useful" research—who decides? the "market"? the government? the dying children lobby?—but the current patent system certainly does badly on the last three counts. Drug companies presently have greater financial incentives to cater their research towards balding, impotent, overweight suburban males rather than look into, say, innovative malaria treatments for the Third World. The patent system also gives drug companies incentives to pursue "me-too" drugs and reap the monetary rewards—see Marcia Angell on this—as well as to suppress any inconvenient research findings.

Now if the government decided to sponsor research directly, as Kucinich proposed, it could avoid many of these problems—2) and 4) especially—but, of course, there's the possibility that politicians could start mucking around with where the research dollars go. Think the reigning First Church of Dennis Hastert would approve one cent for developing new contraceptives? Me neither. And under Kucinich's plan, private research companies could use the legalized graft system in this country to win contracts unduly. On the other hand, to some extent this problem already exists—current research at the NIH is subject to political pressures, and since drug companies often depend to a large extent on government Medicare purchases to profit from their patents, innovation already depends on lobbying, to some extent.

So… What Is to Be Done? In my opinion, the pharmaceutical industry as it stands still does good work, and I don't think full-blown socialism is called for just yet. No, I much prefer creeping socialism. Right now most government research money goes towards basic research, rather than the development and testing of new drugs. Why not steer a couple billion this way, as a test to see if the government can do drug innovation on its own? Meanwhile, draconian regulation to crack down on some of the worst excesses of the current patent system: force drug companies to open its books; regulate advertising; free the FDA from Big Pharma's tentacles; make the approval of new drugs contingent on improvements over existing drugs (right now, new drugs merely need to be better than placebos to be approved). We can be reasonable here.

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The big news on Harriet Miers today... she's an abortion opponent! Seemed fairly predictable, but okay:

President Bush's Supreme Court nominee, Harriet E. Miers, pledged support in 1989 for a constitutional amendment that would ban abortions except when necessary to save the life of the woman.

Will Saletan formulated one version of the "Republicans fear overturning Roe" thesis in this Slate piece, noting that in 1989, when Pa Bush was president, and it looked like the Supreme Court might overturn Roe, the political backlash was colossal: Voters reportedly made it an issue; pro-life politicians lost their jobs; many pro-lifers backed away. That's the claim, anyway. Saletan suggests that the younger Bush has learned his lesson and would never touch Roe. Alternatively, some pundits have suggested that if Roe was overturned, the Christian right would finally be satisfied, pack up their protest signs and go home, and thus dampen voter turnout for the GOP. Pro-choice activists, meanwhile, would be newly fired up (and popular), and the Democrats would benefit.

Historical analysis bears this out to some extent, although these things are always fuzzy. Roe v. Wade helped the Republican Party, no doubt, by spurring religious groups, notably the Christian Coalition and Pat Robertson's 700 Club, to abandon their longstanding quietist stance and finally start getting involved in politics. It also, maybe, spelled the beginning of the end of the Democratic Party's reputation as the party of "moral values" among the electorate. As William Galston and Elaine Karmack recently pointed out, the Democrats have historically polled much higher than the Republicans on "traditional family values" questions, but that lead started declining in or around 1973. Did Roe cause that? Hard to say—surely not singlehandedly (Dems were still doing well on this question in the mid-80s), but perhaps in part.

Nevertheless, there's no going back to 1973, even if Roe was overturned. The Christian Right and other social conservatives wouldn't dismantle the vast political operation they have in place; instead they'd stay focused on passing bans at the state and national level. (The usual estimate is that 30 states would ban abortions if Roe was overturned, although this poll suggests that only about 10-15 states have pro-life majorities; so there's lots to crusade against here.) Once Roe's gone, the Ralph Reeds and Pat Robertsons of the future won't suddenly wash their hands of the GOP and decide that they no longer need to rile up the faithful for political ends—the money's too good and the power too marvelous. No, the conservative base will stay perfectly active. Meanwhile, pro-choice activists in California, Illinois, Massachusetts, New York, and other blue states might actually be de-mobilized, since abortion would in theory be safe for them and their friends, and fighting for abortion rights at the state level is much more daunting than fighting to uphold Roe. This might not happen, but it's not that outlandish either. Perhaps this is a risk someone like Grover Norquist would just as soon not take, especially since conservatives are doing just fine as it is, but there seem to be enough hardliners on the Republican side of the aisle willing to take the plunge.

Personally, I think all of this would be horrific, which is why I believe Roe shouldn't be overturned. But the point is that it's not impossible to think the conservative movement would survive the backlash—they've already made abortion a near-impossibility for a large swath of the country, and haven't suffered for it yet—and those who believe the GOP would never dare overturn Roe are making a pretty daunting leap of faith, it seems.

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Follow the "Let them eat cake" lede:

Almost two months after Hurricane Katrina slammed into the Gulf Coast and a month after promising in a nationally televised speech to help rebuild the region "quickly," President Bush has settled on a cautious, piecemeal approach that even many members of his own party fear will stall reconstruction and sow economic disarray.

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This doesn't seem like good news:

Iraqi election officials said today that they were investigating what they described as "unusually high" vote totals in 12 Shiite and Kurdish provinces, where as many 99 percent of the voters were reported to have cast ballots in favor of Iraq's new constitution, raising the possibility that the results of Saturday's referendum could be called into question.

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