What is your evidence that government is bad at “turning research into actual drugs?” I think it’s probably akin to the evidence that government is bad at advertising erection pills. Simply, that has not been it’s role. You can’t take that as evidence.

Er. And I forgot about Bob Dole.

Government control over health care will almost certainly lead to price controls and price controls will reduce pharmaceutical innovation. Why? Well, every developed country that has universal health insurance has imposed price controls because there is overwhelming incentive for governments to control costs (the US is a quasi-outlier here). And, predictably, price controls reduce innovation.

There seem to me to be three possible responses here:

(1) Pharmaceutical innovation is not that important for health and so forth. This seems to be false. More recent evidence here.

(2) Government could somehow compensate for the loss in private innovation. My response: why have no actual governments done this? European countries still lag the US in innovation. Moreover, I doubt they could. Governments are good at financing fundamental research, but bad at turning this research into actual drugs compared to the private sector.

(3) The health-related gains from state-financed universal health care would outweigh the losses from less pharmaceutical innovation. I think we should also be pretty skeptical of this hypothesis, as the expansion of insurance will likely have little effect on health outcomes.

Anyway, I think McArdle has the stronger position here.

No. This thread is littered with nasty comments like that and they are totally unjustified.

If Megan was against a decent minimium or redistribution those comments might have some justification but she has very clearly stated that she supports such measures in some form or the other.

I’m not suggesting there is a govt. funded productization working on any scale of interest. My position is more:
1) you won’t get anywhere interesting without the fundamental research labs, period, as this is where the innovation starts.
2) the overwhelming majority of effective research at this level is being funded by governments, period, wherever you look. This makes the question “can government money buy medical R&D” misguided. Not only can it, but it is the cornerstone of the only effective way we know how to do a crucial first step in the process.

3) you need productization too, but here things aren’t as cut and dried

following that, I’m not really taking a “side” on the question of balance of funding except to not that while fundamental r&d dollars through academic and government labs are very roughly comparable across countries and research labs, the same is not even approximately true of commercial development. There are companies operating in other countries whose drug development costs are significantly lower than they would be here. However :

3) the costs of the pharma+biotech + whatever you want part of the equation are not actually directly comparable to the costs of the fundamental research side. The price of doing this business in the US is somewhat emergent from the regulatory, insurance and clinical regimes here too, as well as the expectations of capital markets etc.

It’s important not to mistake the large amount of R&D the US does in the area, with the global efficacy of it. We have a big economy spending an awful lot of money in these areas and we do a lot of development. It’s a mistake to think that this development is actually predicated on the way pharma is done in the country, however much the industry would like you to think so uncritically.

All evidence, however, points to it being predicated on the fundamental r&d labs looking something like they do now, with similar amounts of resources being put in.

Hope that makes more sense than initial stab at it, but now I must run.

But the difference is that when you are talking about biotech funding, you are talking about funding that is expected to be repaid via buyout from a pharma company. So that research money is being funded by the pharma companies. The same is not true of the NIH which is being funded by taxes. So if you want to get picture of what research is being paid for by drug companies, breaking out biotechs as a separate entity doesn’t make sense. Acquiring a biotech so you can do phase III trials means that you are acquiring the cost of their research, but under your method you aren’t counting that as a research cost incurred by pharma companies.

“The same can not be said for a particularly US style approach to productization, regulation, and delivery, although you can certainly argue its pros and cons.”

What do you mean by this? Where is your alternate model being practiced? There is no governmental research unit which regularly puts out new drugs and devices on the scale of pharma companies. If this was easy, why don’t we have some big country doing it?

No, not the difficulty of doing the two things, they are both difficult, and both very difficult to do well. I wouldn’t try and weigh these on the same scale, as it’s a bit of an apples and oranges comparison.

What is different is the fundamental difficulty in changing how the the two things are done. There are several effective models of development, commercialization, regulation, if you look internationally. At the very least it makes you realize that it is sensible to think about various approaches. However, nobody anywhere manages to do a good job of fundamental research based on commercial interest in this. It just doesn’t fly anywhere it’s been tried. Making progress in these areas tracks pretty well with investment in academic and related research programs.

63 is right that startups and the like are the lifesblood of bringing this stuff out of the academic labs. But again like IT, these startups thrive only with sufficient access the the products (both ideas and people) of fundamental research labs. It seems, based on the history of the industry here and elsewhere, to be a necessary, but not sufficient condition.

The same can not be said for a particularly US style approach to productization, regulation, and delivery, although you can certainly argue its pros and cons.

Forprofit enterprises are responsible for ~58% of all US spendiong on drug development. Pharma seems to have some value add to the process.

And the main source of ideas for the biotech companies to develop is academic research and/or academic researchers. It all hangs together, and nobody should discount the contributions made by pharma companies, However it’s a hell of a lot easier to construct other ways to do commercialization and/or delivery than it is to find other ways to do fundamental research. In the end, it all starts in speculative, fundamental research labs. Of the sort the corporate research is loath to fund, and for the most part, doesn’t. Fair enough though, as the terrible track record speaks for itself.