Those folks at the Wall Street Journal are really turning reality on its head. Today it ran a column by Robert Ingram, a former CEO of Glaxo Wellcome, complaining about efforts to pass “transparency” legislation in Massachusetts, New York and a number of other states.
This legislation would require drug companies to report their profits on certain expensive drugs, as well as government funding that contributed to their development.
Ingram sees such laws as a prelude to price controls. He then warns readers:
There is no surer way to bring pharmaceutical innovation to a halt in the US than letting governments decide how much companies can charge for their products or harassing them into lower prices. It also represents a fundamental misunderstanding of how pharmaceutical research works. Scientific discoveries involve trying and failing, learning from those failures and trying again and again, often for years.
Ingram bizarrely touts the “flowing pipeline of new wonder drugs spurred by a free market,” which he warns will be stopped by “government price controls.” This juxtaposition is bizarre, because patent monopolies are 180 degrees at odds with the free market. These monopolies are a government policy to provide incentives for innovation. Ingram obviously likes this policy, but that doesn’t make it the “free market.”
Of course, there are other ways that the government can finance research and development, such as paying for it directly. It already does this to a large extent. At the encouragement of the pharmaceutical industry, it spends more than $30 billion a year on mostly basic research conducted through the National Institutes of Health. It could double or triple the amount of direct funding(which could be contracted with private firms like Glaxo) with the condition that all findings are placed in the public domain.