On December 2, the news provided vivid, painful proof that drug innovation is indeed a very risky business.
The American pharmaceutical firm Pfizer was in the final stages of testing a new drug for heart disease that would not just lower bad cholesterol, as its Lipitor does, but also increase good, artery-clearing cholesterol. The drug, torcetrapib, would have been a blockbuster, offering huge promise of actually reversing heart disease–the nation’s number one killer.
The independent researchers monitoring the trial, however, alerted Pfizer that the late stages showed a higher death rate among participants. The company quickly pulled the plug after having invested close to $1 billion and 15 years on it, taking a $20 billion hit on its market capitalization.
It would be wise for members of the incoming Congress to pay attention to the riskiness of this business.
Pfizer has other promising drugs in the pipeline, but if Congress decides to put price controls on the industry, it will certainly dry up the resources needed for new drug development and the capital required to take risks like this to tackle heart disease, Parkinson’s, Alzheimer’s, obesity, and the many, many other killer diseases that could be treated and even cured.
For proof, we need only look at Europe’s dying pharmaceutical research industry, which has been decimated by shortsighted government policies and price controls that dry up the resources for research. We don’t want to go there.
Grace-Marie Turner ([email protected]) is president of the Galen Institute, a free-market think tank in Virginia.
For more information …
“Pharmaceutical R&D”, Washington Times, December 8, 2006, http://www.washingtontimes.com/op-ed/20061207-083938-6705r.htm