Among the most obvious benefits of modern technology is improved health care. Some of the greatest medical advances have been new pharmaceuticals. But medicines don't appear magically. They will not be produced if prices don't reflect research costs.
Unfortunately, some governments, such as Thailand's, don't care about what medicines patients will need tomorrow. Of course, the poor should be treated. But policymakers must decide whether to enlist the drug makers as allies or treat them as enemies. Should governments steal from companies the medications that they developed at great cost?
America's drug and biotech firms devoted US$55.2 billion to pharmaceutical development last year. Unfortunately, companies discover far more dry holes than blockbuster drugs, so the prices charged for the few successful medicines must cover the costs of all research and development.
That price can be high for developing nations, but pharmaceutical costs are not the primary barrier to Aids treatment. Jeremiah Norris of the Hudson Institute and Philip Stevens of the International Policy Network wrote recently: 'Even second-line drug prices are small change compared to the cost of the medical infrastructure required to administer these complicated medicines.'
Moreover, governments routinely impose tariffs and taxes on lifesaving pharmaceuticals and create burdensome regulatory barriers to their production and distribution. Even middle-income countries are increasingly demanding confiscatory price cuts and issuing compulsory licences, effectively stealing patented products.
Most recently, Thailand refused to honour the patent for Kaletra, an Aids drug marketed by Abbott Laboratories, and Plavix, a blood-thinner co-marketed by Sanofi- Adventis and Bristol-Myers Squibb. Last November, Bangkok seized Merck's patent for Stocrin, an anti-retroviral. The military junta has threatened to break several more patents. 'We want lower prices,' declared Mongkol Na Songkhla, public health minister in Southeast Asia's second-largest economy. But the issue is not an inability to pay.
Paul Howard, of the Manhattan Institute, said that 'while the government cries penury, its defence budget has increased by over 30 per cent'.