Thursday, June 14, 2007

John Edwards' prescription for disaster

Generally, I like John Edwards. I think many of his ideas are on the right track, and I wish I was able to see him speak while he is in Detroit today. Despite that, one of his health care proposals is so far off the mark that it has to be addressed.

First, his good idea: requiring health insurance companies to justify their rates by forcing them to spend at least 85% of premiums collected on health care. A handful of states, including New York and Florida, already have such laws, and this idea is ready for nation-wide implementation.

But Edwards' idea for controlling the cost of drugs would be a disaster. Edwards' plan would remove long-term patents from breakthrough drugs, allowing generic drugs to be produced much sooner. Unfortunately for Edwards (and for all of us, if this piece of his plan is implemented), removing long-term patent protection removes most of the incentive for pharmaceutical firms to conduct expensive research and development. Not only would patent removal lead to a decline in R&D (and hence in new drugs brought to market), but since branding would be the only difference among firms' products, we would probably see an increase in drug advertising -- exactly the opposite of what we should be working toward.

No comments: