U.S. Health Care: It's not the private part that makes us innovative

A tip of the hat to Paul Krugman for this piece that debunks the idea that universal health care will undermine the U.S. lead in medical innovation.

The single biggest source of medical research funding, not just in the United States but in the entire world, is the National Institutes of Health (NIH): Last year, it spent more than $28 billion on research, accounting for about one-third of the total dollars spent on medical research and development in this country (and half the money spent at universities)...

As books like Marcia Angell's The Truth About the Drug Companies and Merrill Goozner's The $800 Million Pill point out, a lot of the alleged innovation we get from private industry just isn't all that innovative. Rather than concentrating on developing true blockbusters, for the last decade or so the pharmaceutical industry has poured the lion's share of its efforts into a parade of "me-too" drugs--close replicas of existing treatments that offer little in the way of new therapeutic advantages but generate enormous profits because they are patented and because companies have become exceedingly good at promoting their sales directly to consumers. (emphasis mine)

The most well-known example of this is Nexium, which AstraZeneca introduced several years ago as the successor to Prilosec...AstraZeneca promoted Nexium heavily through advertising--you may remember the ads for the new "purple pill"--and, as a result, millions of patients went to their doctors asking for it. Trouble was, the evidence suggested that Nexium's results were not much better than Prilosec's--if, indeed, they were better at all. And, since Prilosec was going off patent, competition from generic-brand copies was about to make it a much cheaper alternative. (The fact that Prilosec's price was about to plummet, needless to say, is precisely why AstraZeneca was so eager to roll out a new, patented drug for which it could charge a great deal more money.)

There's your private sector health care innovation - it's in the marketing department.