Friday, March 13, 2009
The Democrats go after biotech
One would think that Democrats would like the biotechnology industry. The United States has a great advantage in it, so there is little near-term risk that its jobs will go to China. It funds professors, and Democrats love professors. Biotech has a much smaller carbon footprint than most industries. It cannot sell its products without the permission of the federal government, a concept that some on the left would love to extend to most every promising new industry. Biotech therapies will save lives, and make existing lives better, including the lives of people who vote for Democrats. And, finally, in the industry's quest to save American lives it is bound to make some mistakes, which will delight the tort lawyers.
So it is reasonable to ask, then, why are Democratic mandarins Henry Waxman and Frank Pallone proposing legislation that will destroy the rate of return on investment in biotechnology? There are several possible answers, but the most likely is the incoherent but popular idea that "health care" ought not be about profits.
23 Comments:
By 
Who Struck John, at
Fri Mar 13, 12:13:00 PM:
Well, you know, you never want a crisis in health care to go to waste ...
By 
, at
Fri Mar 13, 12:17:00 PM:
"Profit" has been under attack for a long time. Decades ago members of the production team of the movie "Alien" defended the film to the Russian critics by pointing out it's anti-corporation message. The communist critics changed their rating from "pornography" to "two thumbs up". In light of our current lurch toward state control of business it is chilling to think of how long some people have been working for that goal.
By MEANA55, at
Fri Mar 13, 12:38:00 PM:
The left's response to this "crisis that's too good to waste" is to smash and grab. They are systematically looting the treasury and slicing-open every goose that lays golden eggs.
What we are seeing now is the economic equivalent of the Reign of Terror. To understand them, you need only understand their desire for revenge over their imagined victimhood and whatever it is that drives thieves to steal. The psychopaths are holding the reins.
By D.E. Cloutier, at
Fri Mar 13, 01:13:00 PM:
For decades Democrats and their sympathizers have damaged one American industry after another. Then Americans sit and wonder, "Why don't I have a job?"
You voted for them, America. You'll get no sympathy from me.
Maybe Obama fans will realize their mistake when they start looking for their dinners in dumpsters.
By Christopher Chambers, at
Fri Mar 13, 01:16:00 PM:
"What we are seeing now is the economic equivalent of the Reign of Terror. To understand them, you need only understand their desire for revenge over their imagined victimhood and whatever it is that drives thieves to steal. The psychopaths are holding the reins."
Jesus Christ, MEANA55--are you for real? I wonder if you have the balls to say that outside the wingnut coccoon to regular folks who's "profit" now is having just enough left over after the paycheck for a brief night out at some place like Applebee's? Or another way to look at it is that Waxman sees an opportunity to make sure another Godzilla doesn't emerge from the depths to rival Big Pharma: Big Biotech. Well, more accurately a Rodan doesn't break out of some volcano to join Godzilla-how 'bout that?
As with the whole capital hayride, they'll be wheeling and dealing and compromise, but in the end, the folks who are used to stomping around unbridled have just a tiny bit less ability to do so, and it's driving you crazy, sort of like having a black president. LOL. Maybe if you'd get with the program and provide insight, knowledge, help, rather than try to savage it, we'd all come out better, stronger, more cohesive.
But alas...Godzilla just tears stuff up. His nature, after all.
By , at
Fri Mar 13, 01:27:00 PM:
Geez, we are talking democrats here, so my bet is that biotechs have been slow to contribute campaign funds, hire the sons and relatives as lobbyists or have been slow to offer employment to the poorly qualified relatives of the democrat Congressman.
Check and see which biotechs have recently met with Maxine Waters just to double check.
By Christopher Chambers, at
Fri Mar 13, 01:36:00 PM:
BTW TH: I'll pass on your ire to Congressman Rush Holt who's speaking at your an my alma mater's Washington DC club on science-business matters next Thurs. Or you can call him once he gets back to NJ. I'm sure he's just an unworthy liberal P.O.S. as well, but hey, he's an American, as are we all, and perhaps there's some common ground on which we can build. Oops...I used that word "build" again. And cooperation, empathy. Or indeed "fellow American." I'm sorry for that, guys. I'll send a sheet explaining the terms via email. hahaha
http://www.pcw-dc.org/article.html?aid=507
By Escort81, at
Fri Mar 13, 01:52:00 PM:
Christopher - first of all, what do you have against Applebee's? Are they notorious for overcooking beef or something? Or are the desserts bad? What?
Second, are you saying Waxman is trying to protect Big Pharma at the expense of biotech? I am not sure I follow. TH could likely fill us in on the extensive relationships and cross-investments among the various players.
Third, reading the link, this is really about the protection of IP rights, something I would think you would be in favor of as a published author.
Knocking down exclusivity for branded biologics from 14 to 5 years would crush investment in new biotech. The VCs will put their capital to work elsewhere and still make money (or not), but new treatments will dwindle.
I think there are better ways to get at the results that Waxman and Pallone really want (affordable drugs for their key constituents) -- it makes no sense to kill investment by curbing IP rights.
There are lots of moderates who voted for President Obama who see much of the current agenda of the White House and Congress as anti-business. I swapped emails this morning with a close friend who expressed that sentiment about EFCA -- and this is a guy who raised fairly big money for a friend of his that is a Democrat in the U.S. House, and this congressman was an Obama elector in the EC.
By , at
Fri Mar 13, 01:53:00 PM:
Henry Waxman: "your stem cells are belong to us now...."
By MEANA55, at
Fri Mar 13, 03:14:00 PM:
Very nice reaction, Mr. Chambers. Smear me as a racist. Given your inability to think or reason, that must be all you have left.
If this world accepts "afflicting the comfortable" as a legitimate reason for Waxman's strangling the U.S. biotech industry in its crib, then I'm going to stay holed-up in my wingnut cocoon until it's time for the next world.
By MEANA55, at
Fri Mar 13, 03:24:00 PM:
Escort81,
Good point you make about the assault on IP rights. I could possibly find myself in support of this bill if copyright protections on entertainment product are slashed to five years, as well.
I wonder how much the MPAA and RIAA denizens of Beverly Hills Waxman's district would like that.
By Andrew X, at
Fri Mar 13, 03:46:00 PM:
Here's a little thought excercise -
Imagine that one day along came a new religious philosophy that simply decided that 'success..... is immoral'.
Simple as that, if something, virtually ANYthing... is successful, it must be immoral and wrong, and relentlessly attacked with a mind to bring about its well-deserved destruction.
And this religion began to spread its memes through the culture with a mind to acheiving political power to implement its 'war on success'.
Let's just play pretend that such a philosophy existed for moment.
If it did..... what would it look like, as it manifested itself?
Just a weird thought for the day.
By , at
Fri Mar 13, 04:21:00 PM:
Not sure this is exactly where druu222 is going, but the comment made me think of this:
http://en.wikipedia.org/wiki/Harrison_Bergeron
By Elijah, at
Fri Mar 13, 04:23:00 PM:
Simple questions
1st question -
Why would a company bring a new medication to market if it could not recover the costs of research, development, and production of profit?
2nd question -
5 years until generic... How long does it take until a new medication gains acceptance by physicians, allowing profitability ?
From the article -
"The savings from generic copies of traditional drugs can range from 30 percent to 80 percent, so Congress has a strong incentive to pass a bill that could save Americans (and insurers) billions.
What’s seized the biotech industry’s attention is the bill would permit only 5 years of exclusivity for branded biologics, rather than the 14 years that protect traditional drugs."
By , at
Fri Mar 13, 04:59:00 PM:
Bio tech and pharma should take the risks and do the work for a 5% profit!!! Those [95%] come up with an unsuccessful product shoud bear the burden for their efforts and go bankrupt!!! Doctors should serve the public for minimum wage numbers [based on a 40 hour week] not the 24/7 routine and pay their overhead from the $7.50 hr. wage!!
Yea, Hope and Change, we'll get to Cuban quality medicine very quickly.
By MTF, at
Fri Mar 13, 05:20:00 PM:
The voters are starting to notice the nuttiness. A Rasmussen poll out today shows Gov. Corzine now running a remarkable, even astounding, third behind two Republicans in an overwhelmingly Democrat state, and that'll soon wake up the national Democrats. A separate Quinnipiac poll finds the same standings. A Nevada friend tells me Reid is in trouble in his reelection bid, too. Soon, the pendulum will shift from post-election fervor to pre-election fear, and they're going to frantically start trying to make up for the excesses of the last several months. Insanity like this bill will be example "A' of why the Democrats have so quickly become unpopular. It'll never pass.
By , at
Fri Mar 13, 05:25:00 PM:
Christopher:
Can we peel back the rhetoric and talk about the issues? What are the benefits of this legislation, and do they outweigh the burdens? It takes at least 12 years to get a drug to market, whether it's in biotech or pharma. How do we balance the need to get new drugs to market quickly with providing a good investment rate of return to people who will fund the innovation with the aims of this bill? What should that return be, and how do we make sure that those investors have a better opportunity for a reward than, say, were they to invest in the making of a good that's more of a "nice to have", like a better iPod, putter, bowling ball or what have you?
These are the questions to ask and answer. We owe it to the country and each other to discuss these issues at a high level and to avoid the negativity that has come all too often from politicians on both sides these days.
What are your thoughts on the tradeoffs that this bill wants to make? Do you think that investors will flock to biotech if the exclusivity is cut to five years? Do you think it's possible for biotech therapies's prices to go way up during the five years of exclusivity so as to provide the same investment rate of return that 14 years' of exclusivity would have? These are key issues that the country must solve if we're to foster innovation and keep the costs of our medicines affordable.
I look forward to your views.
The Centrist
By , at
Fri Mar 13, 05:31:00 PM:
Speaking of cocoons, I am trying to imagine the sort of environment in which one develops Professor Chambers' manner of rhetoric. All I can come up with is that there must be a cowed, captive audience involved. Is college really like this, these days? What a shame if so.
By , at
Fri Mar 13, 06:14:00 PM:
My sense is if that IP exclusivity rights are shortened, you will see:
1) small incremental changes in drug products, rather than ground-breaking revolutionary changes
2) More research in government labs, less corporate innovation (which may be the point of this, to empower government research and disempower private, corporate research)
3) Which goes along with more research being done outside of America, not inside, as is presently done. One wonders how well this will work for scientific research in general, as similar policies have done for manufacturing , etc.
Nothing quite like killing the goose that lays golden eggs.
Farsighted.
-David
By Escort81, at
Fri Mar 13, 07:06:00 PM:
We owe it to the country and each other to discuss these issues at a high level and to avoid the negativity that has come all too often from politicians on both sides these days.
The Centrist speaks words of wisdom, as usual.
I think to put the IP 5/14 issue in more context, we need to remember that investment decisions -- the call to lay a fair amount of capital on the table, either by a VC or by the management of a larger pharma or biotech company -- are usually made in a portfolio setting. That is, out of say 10 projects, only a few will actually get to market and maybe one will be a home run. The return on that one home run might seem large, but it has to carry all of the other pop ups in the portfolio.
The tolerance for the pop ups becomes lower when the fences are pushed back and HR is now a triple or double. Fewer projects get funded.
By Dan Kauffman, at
Fri Mar 13, 09:29:00 PM:
"Simple as that, if something, virtually ANYthing... is successful, it must be immoral and wrong, and relentlessly attacked with a mind to bring about its well-deserved destruction"
Have you been reading Kurt Vonnegut?
"THE YEAR WAS 2081, and everybody was finally equal. They weren’t only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General."
"I think there are better ways to get at the results that Waxman and Pallone really want (affordable drugs for their key constituents) -- it makes no sense to kill investment by curbing IP rights."
Don't you understand? That is just what they tell the rubes to justify their real motives
Manipulating Gaeia is EVIL and must be DESTROYED
By Purple Avenger, at
Fri Mar 13, 10:26:00 PM:
This simplest answer is that dead people don't collect social security.
By JPMcT, at
Sat Mar 14, 09:14:00 PM:
Complete control of the Health care segment of the American economy by the government necessitates the progressive crippling of the Health Power Brokers: Pharmaceuticals, Biotech, Hospital Associations, Insurers and Physicians.
Read Daschel's book.
They are well on their way.
