John Ransom

ZealousConscript wrote: As far as the cost of prescription medicine, I would suggest "The $800 Million Dollar Pill" by Merrill Goozner. Pretty damning evidence about how Big Pharma uses government funding to research drugs, then turns around sells them at astronomical cost in order to increase their profit margin.- Don't Let Obama Kill "Pills for Profit"

Dear Comrade Zealous,

Strike one is that Goozner is from Chicago. Strike two is that Goozner was the Chief Economics Correspondent for the Chicago Tribune.

And there is one thing worse than being an economist, and that’s being a journalist. And to sink just a little lower- ok a lot lower- you stick the economics moniker on to the title of journalist, and now you are the Lord of the Crap.

This is Paul Krugman-Ezra Klein wanna-be territory.

He’s the thought that largely escaped Goozner, as he was likely writing about something he knows nothing about: Very few big pharmaceutical companies run investigational compounds through clinical trials.

Small biotech companies do that. When the small biotech companies have success at the clinical level, they start to enter into distribution agreements with big drug companies like Pfizer. But in the meantime smaller biotechs fund their investigations from investor dollars. These are dollars that are at risk.

While it’s true that the federal government funds some basic research, the funding mechanism they used is what the rest of us would call pork-barrel spending.

It’s research dollars looking at shrimp running on treadmills that congresstrons bring back to local universities.

While the super-advanced, super-stupid shrimp study will probably yield no breakthroughs in shrimp or human fitness, the research results obtained by the university are either open source- meaning usable by anyone without compensation to the researchers- or the results are the intellectual property of the university. If research is the property of the university then they have to be paid for it if someone, like say a biotech company, wants to use the research to make money.


John Ransom

John Ransom is the Finance Editor for Townhall Finance.
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