Unseen Therapies

The drug companies, on the other hand, have been a real engine of innovation. If we destroy their profitability through price controls and government rationing, the costs would be very real. The recent slow-down in the introduction of new blockbuster drugs is in part the delayed result of underinvestment in the 1990s — the last time the political class toyed with national health insurance.

So it’s no wonder that, this time, drug companies are looking to diversify both geographically and into biotechnology. Yet neither one is all that safe a haven. The U.S. is the last major pharmaceutical market without universal price controls, and as such has been the world’s main financier of new drug discoveries. In a world of government-run and -priced health care, biotech innovation will also be as much at risk as traditional drug development. The biggest price we may pay for a health-care system run from Washington are the therapies we never get as a result.

via Pharmaceutical Mergers Are a Hedge Against Government-Run Health Care – WSJ.com.

Bastiat repeatedly discussed the importance of the seen and the unseen. People would like to see reduced pharmaceutical prices. That is what’s seen. What is unseen are the therapies we would never get as a result of reducing the money flowing into pharma R&D.

Everything is a trade-off. Maybe it would be wise to reduce the development of new drug therapies. But it should be a conscious choice, not an unintended but predictable unseen consequence.

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