The weekly column from Clark Judge:
The Cure for Obamacare: The Widely Accepted Alternative and a New Idea to Go with It
By Clark S. Judge: managing director, White House Writers Group, Inc.; chairman, Pacific Research Institute
At a luncheon in Washington last week, I stumbled across something new in the Obamacare debate.
Most of the attendees were reporters. The inevitable question came up: If not Obamacare, what? And when a Republican ran through an answer (equalizing tax treatment of insurance bought through employers and individually; allowing insurance policies approved in one state to be sold in all; HSAs and high deductible plans; medical liability reform), the reception was attentive, not dismissive.
In other words, Washington is starting to take seriously the prospect of repeal and replace.
An effective reform package will have more items in it that those mentioned at the lunch. Here is a link to a short (four and a half minutes) video from Pacific Research Institute that lays out the main points of the widely accepted alternative: http://bit.ly/1jeZYv3. The video was produced to launch the Encounter Broadside The Cure for Obamacare by PRI president Sally Pipes (http://amzn.to/1fOpvLG), which goes through the agenda in detail.
I want to put out an additional reform – at least in concept. It has to do with FDA certification of pharmaceuticals and medical devices.
Medicine has increasingly become a matter of prescribing drugs and implanting devices, each of which must go through a long and expensive approval process. We all pay for these costs and delays in four ways: 1) the outright expenses of trials, some of which are useful, some are not and some are capriciously imposed; 2) the capital costs on top of the direct costs, which accumulate like compounded interest as delays stretch to a decade and more; 3) the lost lives and restored health in the years that good drugs and devices are kept off the market and 4) the lack of competition because alternatives are trapped in the process.
To give two examples of this price, over the weekend a pair of stories appeared about infectious diseases.
The first was a report out of the U.K. As The Independent wrote: “Routine operations could become deadly ‘in the very near future’ as bacteria evolve to resist the drugs we use to combat them. This process could erase a century of medical advances, say government doctors in a special editorial in The Lancet health journal.” (http://ind.pn/1gXRZFN).
Beginning in the Lyndon Johnson Administration, the U.S. government started discouraging – including through the FDA — me-too drugs, particularly antibiotics. These were pharmaceuticals with small variants in their molecular structure. Often at least part of the motivation in creating and marketing them was to have a product on-patent or get around another producer’s patent. The government’s idea was that a drug was a drug and the small changes only inflated costs and profits. But the arguable result has been to slow the flow of antibiotic options and, with other factors, to accelerate the emergence of drug resistant bacterial strains.
The second article had to do with the FDA process keeping proven cures out of the United States (http://cbsloc.al/1dMTxxV). A small epidemic of meningitis has broken out at Princeton University. Nothing has been able to stop it. European and Australian authorities have approved a drug called Bexsero that is effective against the disease. The FDA has not done so. In this case, the FDA is offering a green light to Princeton, likely under the weight of criticism from expert professors. But what of those places facing similar dilemmas but without expert professors and well connected alumni?
The FDA process has two parts. The first establishes the product’s safety. The second determines that it is effective. There has been talk for years about doing away with the effectiveness half of the test. It is very expensive and can stop companies from spreading the word about proven benefits of good medications. My concept goes further.
Yes, do away with superfluous and counterproductive effectiveness trials. But change the safety trial, too. Create three new categories for drugs: legal, advisory and certified.
“Legal” medicines would have no FDA approval and naturally would exclude banned drugs. Any legal drug could go to market.
“Advisory” would be much like the current approval, meaning the FDA would verify safety but trial lawyers could still sue, a major expense to the industry.
“Certified” would carry a stronger FDA backing. The government would assume all liability. Producers would no longer be subject to lawsuits.
The point is both to free up the approval process, allowing more treatments to come available faster, and tighten it, making the ultimate approval a true guarantee to both the consumer and the producer. My guess is that inventors will start new drugs at the low end of the process and work their way to the top as experience accumulates.
The bigger point is that the best reforms will creatively free up the medical care and insurance markets, allowing physicians, insurers and pharmaceutical and device producers new freedom.
Better competition (with functional rather than dysfunctional oversight) is the true cure for Obamacare.