Wall Street Journal Examines How Market Forces Can Influence Medication Production

Main Category: Pharma Industry / Biotech Industry
Also Included In: Flu / Cold / SARS
Article Date: 09 Nov 2005 - 6:00 PDT

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The Wall Street Journal on Tuesday examined how market forces in the pharmaceutical industry "reward" the production of profitable medications for chronic conditions but are "a poor way" to provide some of the antibiotics and vaccines "the public needs most." Shareholders in publicly traded pharmaceutical companies encourage the companies to manufacture medications that cost thousands of dollars per prescription or "can be prescribed for years," rather antibiotics and vaccines -- products often with "low profit margins, infrequent use and a high likelihood of liability lawsuits," the Journal reports. In response, the federal government has begun to consider proposals to increase spending on public health programs to help raise production of antibiotics and vaccines. In 2004, President Bush enacted Project BioShield, a $5.6 billion program that encourages pharmaceutical and biotechnology companies to work with NIH to develop antidotes, vaccines and other products to treat and protect against a number of potential biological agents. Congress also has begun to consider legislation that would provide pharmaceutical companies with incentives -- such as prolonged market exclusivity and a new HHS agency to fund mid-stage research -- to develop vaccines, avian flu treatments and antibiotics. According to the Journal, with "more money floating around, some companies are starting to find infectious diseases alluring again" (Hensley/Wysocki, Wall Street Journal, 11/8).

Related Broadcast Coverage
APM's "Marketplace" on Monday reported efforts by pharmaceutical and biotech companies to find organisms and compounds in the ocean that might have medical applications. The segment includes comments from Ross DeVol, an economic analyst at the Milken Institute; Eric Mathur, co-founder of biotech company Diversa Corporation; and Lisa Speer, senior policy analyst for the Natural Resources Defense Council (Vanek Smith, "Marketplace," APM, 11/7).

The complete segment is available online in RealPlayer.

"Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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