Reason: Will ObamaCare and patent attacks kill medical innovation?

posted at 1:01 pm on May 25, 2013 by Ed Morrissey

Most readers will probably have already heard about the horrible set of choices that Angelina Jolie faced after finding out that her DNA contained a genetic marker that almost guarantees that she will face breast cancer in her future.  Thanks to the genetic test, Jolie had an opportunity to make an informed choice about her treatment and chose a double mastectomy and later reconstructive surgery.  Not everyone can afford the BRCA-1 test and surgeries, though, which means many women at this point don’t get the options that Jolie had.  Is that an argument for ObamaCare?  Hardly, argues Reason TV:

Angelina learned about her risks because of the sort of medical innovation in which the U.S. has long been the clear leader. She benefited from a genetic test that is at the center of a Supreme Court case challenging test-maker Myriad Technologies’ right to enforce genetic patents.

The ACLU and others have sued the biotech giant, saying that you can’t patent products of nature, or even seemingly unnatural products like Angelina’s perfect lips.

Wait, says, Reason’s Kennedy — how will ending patents on tests drive innovation?  Short answer — it won’t:

Over the past few decades, America has lead the world in the number of new drugs being developed– and I’m not just talking about purple kush.

We’ve also led the way in developing a host on new technologies, too – like MRIs, CT scans, and genomic sequencing. …

Angelina’s test cost north of $3,000, well out of the price range of most women in America. But just like VCRs, cellphones, and Lindsay Lohan’s dignity, things that start out expensive and rare quickly become cheap and ubiquitous.

It’s not clear how the Supreme Court will rule in the Myriad Technologies case, but this much is more certain than the fact there’s not going to be a sequel to Salt: As Obamacare kicks in, groundbreaking genetic tests and preventative surgeries will remain elusive perks of the privileged, as innovation and patient choice are always the first things to go when bureaucracy and the state take over health care.

Wait — there isn’t going to be a sequel to Salt??  Awwww ….

Of course, that still leaves the question of the surgeries that Jolie chose.  Those provide an interesting contrast, because while mastectomies are covered by comprehensive health insurance, breast augmentation usually isn’t, although in the case of reconstructive surgery (as Jolie will need), some will.  The plastic-surgery market therefore allows for full price signaling and competition, which makes breast-augmentation surgery a lot less expensive than the mastectomies (recognizing that the latter is more complicated than the former, too).  If both markets had no third-party-payer screens on pricing signals and providers could compete directly rather than negotiate with insurers, mastectomies would still be more expensive than augmentations, but the difference would probably be considerably less — and innovation would drive the costs lower, just as they have with plastic surgery over the last couple of decades, too.  For a while, plastic surgery was the exclusive province of the wealthy and famous, too, but not any longer.

The Lasik and plastic-surgery markets should have been the model for health-care reform.  Perhaps after the inevitable failure of ObamaCare, we might give it a try.

Also, keep Angelina Jolie and all women who face this tough diagnosis in your prayers.

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I was close to the LASIK market roll out. Prices did go down to unreasonable levels as whores penetrated the market attempting to gain market share. Those guys are mostly gone now having found out they couldn’t make it up on volume. The market has segmented into three buckets: high end carriage trade (high price); ala carte with varying charges for different options; low priced, stripped down model (this model might use older lasers and flap making equipment). All of these segments must strive to keep things competitive because the patient is paying out of pocket and they do shop for price. The one variable that causes prices to remain higher is malpractice insurance. One high volume LASIK provider told me of his malpractice quote a few years ago. This was a high quality provider with a record for safety that was three times the average. His global coverage for the year was $5 million. A per occurrence deductible was $500,000 and the premium was $3 million. Why even have insurance? The average settlement for a LASIK lawsuit then was $25,000. If we could get the trial lawyers under control, which I don’t see happening in ObamaCare, we could see pricing come down substantially in many medical procedures. Having been in the medical field for 20 years, I can tell you there is a very clear difference in the skill level of surgeons. Even if you are shopping, you still need to be very careful to get references on the surgeon. They are not all equal. If I was shopping for a doctor for athlete’s foot I might take the low price. If you are talking about my eyes, I would be willing to pay a little more for someone with better outcomes.

flyoverland on May 25, 2013 at 1:17 PM

Once you have breast cancer (barn door/horse) if you are lucky enough to have a doctor order the BRCA-1 to see if it is genetic that opens your daughters to getting mammograms at a much earlier age. So these tests don’t just help the patient but their offspring. If the genetic probability is there but lower, early detection can be a very useful tool.

Cindy Munford on May 25, 2013 at 1:27 PM

flyoverland on May 25, 2013 at 1:17 PM

You know that Democrats hate it when you talk sense and mess with their constituents wallets.

Cindy Munford on May 25, 2013 at 1:28 PM

O/T breaking

French soldier stabbed in neck: police source

By person of “North African origin.”

29Victor on May 25, 2013 at 1:28 PM

Perhaps after the inevitable failure of ObamaCare, we might give it a try.

You, and many others, say that with some degree of certainty. If the majority doesn’t want or trust Obamacare to be a success, why can’t we repeal it? Are our lawmakers so afraid to admit it’s not a good bill that they’re willing to subject the public to it regardless? Is that the kind of leadership we have?

scalleywag on May 25, 2013 at 1:29 PM

Of course it will kill innovation. That’s the point.

rightmind on May 25, 2013 at 1:36 PM

3 years ago my wife had the same procedure as Angelina had. Even though she had complications, she and I are both confident it was the right decision after her mother had breast cancer 3 times.

The controversy of her surgery, an elective double mastectomy, pales in comparison to the controversy we face as new rules, new treatments, and new procedures are replaced with cost efficiency and bureaucracy. It’s a brave new world, and innovation will be the first to succumb.

jjok on May 25, 2013 at 1:44 PM

Why do the plaintiffs want to invalidate human gene patents? As a matter of public policy, it’s mainly because they believe such patents impede rather than speed valuable research and development.

Which is nonsense, but the left has never been much interested in learning from history, human nature and basic economics. They always believe that people will, or should, voluntarily risk enormous amounts of time and money without incentive for the benefit of the collective.

It never happens, so the government becomes the investor by force, and is motivated by politics rather than return on investment. Money is wasted and mis-allocated, worthwhile innovation slows to a crawl, and everyone loses except the ruling class.

RadClown on May 25, 2013 at 1:44 PM

This helps to complete the circle that govt has no business in managing anyone’s health care.

Kissmygrits on May 25, 2013 at 1:53 PM

Are our lawmakers so afraid to admit it’s not a good bill that they’re willing to subject the public to it regardless? Is that the kind of leadership we have?

scalleywag on May 25, 2013 at 1:29 PM

They still think it’s a great plan, and are hell-bent on seeing it implemented. But how would they know – they were stupid enough to vote for it in the first place.

Imagine how shocked the Dems will be when ObamaCare reveals itself as an economic and policy disaster. They’ll blame the Republicans.

Curtiss on May 25, 2013 at 1:53 PM

MISS — The city of Chico is talking about raising all sorts of fees and fines in an effort to plug an enormous hole in its budget.

The council has for years approved spending millions of dollars it didn’t have, shifting money around to hide the problem. Now it’s out in the open, and citizens will pay dearly if they dare break city laws.

But there’s good news out there for nuclear bomb owners. The current fine for a first-time violation of the city’s nuclear-free ordinance is $1,064. Under a proposal to revise certain fines, a first-time offense will be reduced to $1,000.

For those of you new to town, this is not a joke.

J_Crater on May 25, 2013 at 2:00 PM

The Lasik and plastic-surgery markets should have been the model for health-care reform. Perhaps after the inevitable failure of ObamaCare, we might give it a try.

Unfortunately, The Left will never admit that government interference is what killed the Health Care market. They will claim that they simply did not have _enough_ government control and they will push for an even more Orwellian scenario once Obamacare fails.(Remember the scene where Big Brother was running everybody through their calisthenics in the morning and was able to see and correct those who were not doing it correctly or with enough enthusiasm? It will be something like that.)

Theophile on May 25, 2013 at 2:20 PM

O/T breaking

French soldier stabbed in neck: police source

By person of “North African origin.”

29Victor on May 25, 2013 at 1:28 PM

Somehow I must have missed the stories of Tea Party types in North Africa.

Let’s contemplate what I call “Obama’s Law”:

Everything this man does, from the taking in of oxygen to the expulsion of carbon dioxide, from the taking in of water to the voiding of urine, to his every act during every day, this man has a singular focus, and to that singular focus he asks this question: “does this act materially harm the United States?’

If so, its balls-to-the-wall for Barry.

turfmann on May 25, 2013 at 2:41 PM

The answer is ALWAYS: Let the free market work.

nazo311 on May 25, 2013 at 2:47 PM

…or even seemingly unnatural products like Angelina’s perfect lips.

Modeled after a Goldfish? I don’t think so.

slickwillie2001 on May 25, 2013 at 2:48 PM

Theophile on May 25, 2013 at 2:20 PM

Bingo. When the goal is to have the state determine who gets what, innovation is hostile.

As long as “more government” is the hammer, we will be the nail.

rightmind on May 25, 2013 at 2:52 PM

Breathlessly awaiting bayam’s take on this. Probably still consulting with Cult Leader Paulie Krugman to learn what to think…

Del Dolemonte on May 25, 2013 at 2:53 PM

Perhaps after the inevitable failure of ObamaCare, we might give it a try.

Perhaps, but I wouldn’t hold my breath.
The Goo-Goo’s wouldn’t be able to interfere enough.

Another Drew on May 25, 2013 at 3:06 PM

I think you are looking at this wrong. the Secretary shall just deem whatever procedure she wants into mandatory insurance plans. And if you complain, they just revert to full on War on Women, or other lib diatribes to justify You paying for what others need want.

can_con on May 25, 2013 at 3:22 PM

At some point Obamacare will weigh the cost of breast cancer and decide all women must have a double mastectomy regardless of their marker.

See how easy it was to cure breast cancer? Obama is good!!!! Lefties everywhere marvel at his presence.

goflyers on May 25, 2013 at 4:08 PM

At some point Obamacare will weigh the cost of breast cancer and decide all women must have a double mastectomy regardless of their marker. non-liberal-elite women must forego all cancer screenings and treatments.

goflyers on May 25, 2013 at 4:08 PM

FIFY

catsandbooks on May 25, 2013 at 4:23 PM

Yes, and it won’t matter politically. As we all well know – from the rest of the Obama presidency – you can’t point to progress that *didn’t* happen to convince the low information voter.

To the low information voter, it’s natural, albeit tragic, that her mother died at age 63. She went into coronary arrest, and the doctors did all they could, but they couldn’t save her.

In this anecdote, the unspoken “?” element is the medical advances that didn’t happen. The device that wasn’t invented at enormous cost, or made cheap by widespread testing followed by risky mass production.

In fact, it’s not an anecdote. It’s happening right now. Just think of what kind of medical marvels we would have, and how much sooner we would have gotten what we have right now, if the UK, Japan, France, and Germany had a competitive health care market.

HitNRun on May 25, 2013 at 5:19 PM

Angelina Jolie did not have breast cancer. Therefore, her surgery was elective. Ain’t gonna happen under ObamaCare – she’d have had to wait until actually developing breast cancer before getting approved for surgery. And hope that the bureaucratic idiot evaluating her application doesn’t have indigestion that day.

ss396 on May 25, 2013 at 5:24 PM

Sorry, but I do think pharmaceuticals are the one industry that should be nationalized. The skyrocketing costs of health care are mainly due to Big Pharma and the patent system related to drugs.

ButterflyDragon on May 25, 2013 at 6:09 PM

Anything that forces individuals into a system impedes innovation. Progress requires trying new things. Whenever an industry is getting worse instead of better, or more expensive instead of less expensive, it’s almost always because government regulations are preventing innovators from experminenting with new ways of doing things.

Cara C on May 25, 2013 at 7:32 PM

Will brainfreeanddie say something stupid the next time he opens his mouth?

There is absolutely nowhere that can pick up the slack for medical and surgical innovation if America goes dark. Nowhere. Not even for HALF of what we do.

Both China and Russia follow the Communist model of “steal from capitalists and hope you can make cheap copies”; both their systems are nearly void of real incentive and the former is an economic wreck.
England is a neutered shell of an empire. Germany is up to its eyeballs in the bitter harvest of the EU’s idiocy. Japan has an economic and social crisis incoming.

Various places are springing up as “medical tourist” spots, but they import everything from supplies to experienced staff.

South American socialist nations can’t even keep toilet paper on the shelves. Medical ‘innovation’ in Africa is locals being trained by Western doctors with imported (often functional but obsolete) instruments, if they’re lucky. The Middle East, minus Israel, is one big bubble economy when it’s not a violent mess.

Seriously, folks, what’s left?

MelonCollie on May 25, 2013 at 11:01 PM

Watch life expectancies go down, down, down.

Bob's Kid on May 26, 2013 at 1:15 AM

Sorry, but I do think pharmaceuticals are the one industry that should be nationalized. The
skyrocketing costs of health care are mainly due to Big Pharma and the patent system related to
drugs.
ButterflyDragon on May 25, 2013 at 6:09 PM

There would never be another new drug brought to market, and the cost and availability of existing drugs would skyrocket for the former and disappear for the latter.

tom daschle concerned on May 26, 2013 at 5:28 AM

There would never be another new drug brought to market, and the cost and availability of existing drugs would skyrocket for the former and disappear for the latter.

tom daschle concerned on May 26, 2013 at 5:28 AM

Ridiculous. You’re assuming every chemist in the medical field only does so for fame and fortune.

The people creating drugs will be just as happy getting a paycheck from Uncle Sam as they would from Pfizer or whoever. We already know the government pays better than the private sector in most positions.

ButterflyDragon on May 26, 2013 at 10:03 AM

Ridiculous. You’re assuming every chemist in the medical field only does so for fame and fortune.

Fortune if not fame ARE theirs prime motives, genius. That’s how the free market works in the first place.

The people creating drugs will be just as happy getting a paycheck from Uncle Sam as they would from Pfizer or whoever. We already know the government pays better than the private sector in most positions.

ButterflyDragon on May 26, 2013 at 10:03 AM

The gov’t “pays better” by robbing Peter, pocketing their share, and paying Paul with the rest. And when they pay Paul, they get TOTAL say what medicines Paul will or won’t develop or distribute.

MelonCollie on May 26, 2013 at 12:51 PM

Ridiculous. You’re assuming every chemist in the medical field only does so for fame and fortune.

The people creating drugs will be just as happy getting a paycheck from Uncle Sam as they would from Pfizer or whoever. We already know the government pays better than the private sector in most positions.

ButterflyDragon on May 26, 2013 at 10:03 AM

Have you ever talked to a post doc or MD doing research? For the most part they are narcissists and pure type a personalities. They google themselves often. They love the sound of their own voice. Not all, but many are.

And the idea that a lab under the government will be run any better than your department of motor vehicles is absurd.

tom daschle concerned on May 26, 2013 at 5:14 PM

And the idea that a lab under the government will be run any better than your department of motor vehicles is absurd.

tom daschle concerned on May 26, 2013 at 5:14 PM

Most of the pharmaceutical discoveries are made in universities living off of government grants that in turn sell the rights to a large pharma corporation.

The government and the taxpayers already fund the research. Might as well control the manufacturing process.

ButterflyDragon on May 26, 2013 at 6:19 PM

The government and the taxpayers already fund the research. Might as well control the manufacturing process.

ButterflyDragon on May 26, 2013 at 6:19 PM

And I’m SURE they’ll do a better job than the green energy processes they controlled…and Government Motors…among numerous other examples.

Dear Lord you are obtuse.

MelonCollie on May 27, 2013 at 2:03 PM