Drug dealing by the federal government

Apparently the Obama administration thinks we have an extra billion dollars (for initial financing, not to mention the costs down the road) to start a new research institute whose purpose is to find new drugs, because pharmaceutical companies haven't come up with enough innovative new therapies. How typical of Washington to blame private industry for problems Washington itself has caused with its strangling regulations and taxes.

As I argued in my 2008 Objective Standard article, "How the FDA Violates Rights and Hinders Health," the FDA is a major reason -- perhaps the primary reason -- that developing a new drug costs, on average, $800 million. Eight hundred million dollars! This has the effect of discouraging pharmaceutical companies from looking for new drugs to treat diseases that affect a small number of people (because that $800 million cost doesn't change whether the drug treats 200 people or 200 million), as well as encouraging them to look for drugs that are "tweaks" to existing therapies rather than completely new strategies. (The upside of finding a truly innovative therapy that does something no other drug has done before is, by far, offset by the huge risk of spending hundreds of millions of dollars on a drug that the FDA will ultimately reject, whereas a "tweak" strategy has higher odds of getting past the regulators.)

So it's the government that has caused the drug industry's dwindling pipelines. And the government now wants to cure the problem by doing research of its own? I somehow doubt Uncle Sam is going to do better at identifying targets for research than private companies have. The plan is that the government institute would come up with targets and pass that information on to drug companies...but the government won't be removing a single one of the obstacles it places in the path from "interesting target" to "therapeutic drug able to be sold to patients."

The government can help the pharmaceutical industry become more innovative...by getting the hell out of the way. This new institute won't do a thing but pour more of our tax dollars down the toilet.