Beck Suggests Federal Support Of Drug Research Means Government Will Be “In Charge Of The Life-Saving Drugs”

Beck: "[I]s Anybody Else Concerned With The Government Being In Charge Of Our Life-Saving Drugs?" On the January 24 edition of his Fox News program, Beck mocked the announcement of a $1 billion government drug development center to help create new medicines, asking his listeners, "[D]o you believe the federal government is the answer to speeding up production of new medicine? Me neither." He further stated, “Maybe it's just me, but is anybody else concerned with the government being in charge of our life-saving drugs?” From the broadcast:

BECK: Next headline. The Obama administration has become so concerned about the slowing pace of new drugs coming out of the pharmaceutical industry that officials have decided to start a billion-dollar government drug development center to help create medicines. Well, that is fantastic. No, seriously -- they're concerned about the time it takes to get new drugs to the market. Reason: do you believe the federal government is the answer to speeding up production of new medicine? Yeah, me neither. So why is this happening?

Well, I mean, let's start with this. Why would the drug manufacturers have any problems, you know, making new drugs and getting them to the market. You know, they have to wait for the FDA approval and go through -- and this is all fine print. You know, go through the new regulations and the rules of, you know, all this stuff from the FDA. It's pretty cumbersome, right? I mean, can you imagine? By the way, this isn't the FDA. These are just the 165 new [Food and Drug Administration] regulations that Cass Sunstein has put in with Obama since 2009. Now it takes an average of 12 years and over $350 million, U.S. dollars, to get a new drug from the lab -- laboratory to the pharmacy shelf.

So, they're serious. What they're going to do now is add incompetence. Maybe it's just me, but is anybody else concerned with the government being in charge of our life-saving drugs? Remember, when they want to have a solution to something, they get serious. Remember when there were long lines at the post office? I am not making this up. Do you know what their solution was? Do you know, Erin? She knows. She knows. Take the clocks out of the lobby so nobody could see the clock. That was it. Like you don't have watches or a cell phone? While we're at the post office, by the way, the U.S. Postal Service is going to start the process of closing additional 2,000 branches operating in a deficit now, but they have to lobby Congress to allow it to change the law so it can close the most unprofitable post offices. The law currently allows the Postal Service to close post offices but only for maintenance problems, lease expirations, or other reasons that don't include profitability.

But let's get them in the prescription drug business, shall we? Because they can make them better and faster. But why? I think personally, I'd rather have my drugs made by the Federal Express guy. [Fox News' Glenn Beck, 1/24/11]

But Drug Research Center Intended To Stimulate Lagging Private Investment; Will Not Compete With Private Sector

NIH Director Tells NYT: “None Of This Is Intended To Be Competitive With The Private Sector.” A January 22 New York Times article about the initiative quoted National Institutes of Health director Dr. Francis S. Collins as saying, “None of this is intended to be competitive with the private sector. ... The hope would be that any project that reaches the point of commercial appeal would be moved out of the academic support line and into the private sector.” The article also said that "[t]he job of the new center" will be to do “as much research as it needs to do so that it can attract drug company investment.” From the article:

The Obama administration has become so concerned about the slowing pace of new drugs coming out of the pharmaceutical industry that officials have decided to start a billion-dollar government drug development center to help create medicines.

[...]

The National Institutes of Health has traditionally focused on basic research, such as describing the structure of proteins, leaving industry to create drugs using those compounds. But the drug industry's research productivity has been declining for 15 years, “and it certainly doesn't show any signs of turning upward,” said Dr. Francis S. Collins, director of the institutes.

The job of the new center, to be called the National Center for Advancing Translational Sciences, is akin to that of a home seller who spruces up properties to attract buyers in a down market. In this case the center will do as much research as it needs to do so that it can attract drug company investment.

[...]

“None of this is intended to be competitive with the private sector,” Dr. Collins said. “The hope would be that any project that reaches the point of commercial appeal would be moved out of the academic support line and into the private sector.” [The New York Times, 1/22/11]

NYT: Government Investment Critical Because “Many Large Drug Makers ... Are Paring Back Research.” The New York Times article further noted that the administration is calling for the center because “many large drug makers, unable to find enough new drugs, are paring back research.” From the article:

The new effort comes as many large drug makers, unable to find enough new drugs, are paring back research. Promising discoveries in illnesses like depression and Parkinson's that once would have led to clinical trials are instead going unexplored because companies have neither the will nor the resources to undertake the effort.

[...]

[I]n some cases, the center will use one of the institutes' four new robotic screeners to find chemicals that affect enzymes and might lead to the development of a drug or a cure. In other cases, the center may need to not only discover the right chemicals but also perform animal tests to ensure that they are safe and even start human trials to see if they work. All of that has traditionally been done by drug companies, not the government.

[...]

Whether the government can succeed where private industry has failed is uncertain, officials acknowledge, but they say doing nothing is not an option. The health and human services secretary, Kathleen Sebelius, sent a letter to Congress on Jan. 14 outlining the plan to open the new drug center by October -- an unusually rapid turnaround for an idea first released with little fanfare in December. [The New York Times, 1/22/11]

NYT: Initial $1 Billion For Drug Center “Is Relatively Small Compared With The $45.8 Billion That The Industry Estimates It Invested In Research In 2009.” The New York Times article also noted that "[t]he initial financing of the government's new drug center is relatively small compared with the $45.8 billion that the industry estimates it invested in research in 2009" and added that "[t]he cost of bringing a single drug to market can exceed $1 billion." [The New York Times, 1/22/11]

CBO: Public-Sector Research Helped Develop “Most Of The Important New Drugs Introduced” Over Past 40 Years

CBO: “Most Of The Important New Drugs Introduced ... Over the Past 40 Years Were Developed With Some Contribution From Public-Sector Research.” An October 2006 report by the Congressional Budget Office (CBO) found that although there is “a risk that [public spending] could 'crowd out' (or discourage) private investment in some cases,” "[a]ggregate statistical data suggest that, overall, private R&D spending responds positively to federal R&D." From the report:

Federally funded research plays a major role in the discovery of new pharmaceuticals. Most of the important new drugs introduced by the pharmaceutical industry over the past 40 years were developed with some contribution from public-sector research. In the past decade, federal outlays on health-related research and development have totaled hundreds of billions of dollars at the National Institutes of Health (NIH) alone. Although only some of that spending was explicitly related to pharmaceuticals, much of it was for the basic research on disease mechanisms that underlies the search for new drugs. Federally supported basic research in genomics, molecular biology, and other life sciences has greatly expanded the drug industry's technological opportunities, stimulating private investment in pharmaceutical R&D.

Given the extent of public R&D spending in the life sciences, however, there is a risk that such spending could “crowd out” (or discourage) private investment in some cases by substituting for it rather than complementing or stimulating it. The government's focus on basic research, while the drug industry concentrates on applied research and development, tends to minimize that risk. But the distinction between basic and applied research is not always clear--and it has blurred to some degree as drug development has become more dependent on scientific knowledge.

Aggregate statistical data suggest that, overall, private R&D spending responds positively to federal R&D. In specific cases, however, the government may have funded some research that the private sector otherwise would have paid for. Identifying where such direct crowding out has occurred is difficult, but it is probably more likely to happen in areas where potentially valuable commercial applications of government-funded research are more apparent. [Congressional Budget Office, “Research and Development in the Pharmaceutical Industry,” October 2006, emphasis added]