Thursday, September 12, 2002
Page 7
AFFAIRS OF STATE (COLUMN)
Don’t Look to Canada for Drug Innovations
By DAVID KLINE
Sure, prescription drugs are cheaper in Canada. But don’t hold your breath waiting for the next Canadian medical breakthrough.
When it comes to health care, everything is related, whether we like it or not. And it often comes down to a simple rule: You get what you pay for.
Drugs are cheaper north of the border because the Canadian government has enacted price controls. Pharmacies there don’t have the right to set prices on their own, guided by experience, overhead costs and the laws of supply and demand. Instead, bureaucrats set the prices.
Not coincidentally, you don’t hear much about Canadian drug companies coming up with new, life-saving medicines. There isn’t as much financial incentive to sell drugs in Canada, and therefore there isn’t as much incentive to create new drugs. Nor is there as much scientific competition pushing the medical community to greater heights.
In this country, however, drug makers seem to work harder, knowing they will be rewarded handsomely for breakthroughs that are popular with American consumers.
The results are not insignificant. The Pharmaceutical Research and Manufacturers of America reports that in the past 10 years, “pharmaceutical companies have made available some 200 medicines to treat the diseases of aging, [and] companies are currently developing more than 600 medicines to treat heart disease, cancer, arthritis, Alzheimer’s, Parkinson’s, diabetes and other diseases of aging.”
In a detailed critique of health-care price caps, Simon Rottenberg, an economics professor at the University of Massachusetts, and David Theroux of the Independent Institute, said this about drug research:
“Canadian health spending includes very little research and development costs, whereas R&D spending in the United States is considerable, benefiting Canada as well as other countries.”
The authors also said useful comparisons between our countries’ medical costs and services are impossible because our health care needs differ in too many ways.
“For instance,” they wrote, “the U.S. population is older, and has three times the rate of AIDS cases, 2.5 times the teenage pregnancy rate, three times the abortion rate, over twice the miscarriage rate, a much higher violent crime rate, including ten times the number of homicides, substantial costs for war veterans (including those from Vietnam), and about 375,000 drug-exposed babies, a negligible problem in Canada.”
Still, our less-regulated system does a better job of saving lives.
The drug industry group notes that Canada’s system, with its focus on cost-containment, limits care in many ways and even restricts access to the newest, best drugs.
“Canadians wait on average seven months longer than Americans for their government regulatory agency to approve new medicines,” PhRMA notes. “Even after a medicine is approved, patients wait an average of five to 13 months longer before the medicine is put on and reimbursed by each province’s formulary. Many other state-of-the-art therapies are simply not available to patients through the provincial-level health care system.”
Is this the type of health care we want here? If we try to use price controls to artificially reduce medical costs, we just might get it.
— Capitol News Service
Copyright 2002, Metropolitan News Company