1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

The Ludwig von Mises Institute

Advancing Austrian Economics, Liberty, and Peace

Advancing the scholarship of liberty in the tradition of the Austrian School

Search Mises.org

The Politics of Medical Research

Mises Daily: Tuesday, May 23, 2000 by

A
A

In the popular movie "The Fugitive," Harrison Ford plays Richard Kimble, a doctor who is framed for the murder of his wife. The perpetrators are the greedy owners of a pharmaceutical firm who are trying to sell a drug without warning the public of its dangerous side effects, something Kimble begins to discover just before the "one-armed man" beats his wife to death.

The story, of course, is fiction, but certain pro-statist advocates want us to believe that unless the government acts quickly, private firms will corrupt medical research and place all of our lives in danger. Firing the latest salvo has been the editor of The New England Journal of Medicine, who wants to know, "Is Academic Medicine for Sale?" The editor, Dr. Marcia Angell thinks so, and declares that medical schools have struck a "Faustian bargain" with private drug and medical equipment firms.

This is hardly the first time the New England Journal has attacked private enterprise. A few years ago, Angell demanded in an editorial that the United States adopt Canadian-style socialized medicine. Despite the documented disaster that has been the Canadian experience, Angell and her allies still seem to believe that the U.S. Government can make socialism work.

Ideology aside, however, Angell does raise important questions. Does the presence of private research money in medicine automatically mean corruption? Are we better off having all medical research financed by taxpayers? Will that keep the system more honest?

To answer these questions, we first must establish that medical research is both expensive and time consuming, not to mention the risk researchers face in going down the wrong paths. Second, we understand that if research is to occur, someone must pay for it. Third, we note that the parties paying for research will either have to be from private firms or government (taxpayers)--or a combination of both.

According to Angell and her supporters, private firms lavish gifts, trips, and free samples upon researchers and doctors in order to influence their decisions about the drugs or medical devices in question. Such practices, says Angell, "are subtly swaying researchers toward more favorable findings on products of companies making the payments." In other words, a few trips, a few free samples, and the researcher will either falsify data or manipulate the tests to change the outcomes from what they would have been had honest scientific inquiry been made.

There is no doubt that these things could occur. Researchers have been known to maneuver scientific testing in a way to ensure outcomes favorable to themselves. However, there exist great risks to the researcher who attempt such practices, including public shame at the least and prison and fines at the worst.

It must also be established that there is a difference between establishing known risks and coming up with beneficial ends. In the case of drugs, almost any medication will have side effects. Chemotherapy for cancer, for example, is extremely toxic and alters other bodily functions and chemistry. This issue in this case is not necessarily about the side effects themselves, but whether or not the risks they pose outweigh the benefits of destroying cancer cells.

Sometimes side effects can be positive. Aspirin is the most popular pain reliever, but because it thins the blood, it can help prevent heart attacks or even partially relieve symptoms of a heart attack as it is taking place.

In short, the issues surrounding side effects are ultimately economic ones. The weighing of costs, potential costs, known and potential benefits, are all part of the larger economic calculus in which all humans engage. For the companies that find miracle cures, the rewards can be great. Firms that produce drugs or medical devices that are discovered to have deleterious side effects, however, the monetary losses, not to mention damage to a firm's reputation, can be nearly fatal to that company.

For firms to encourage researchers to falsify data or manipulate statistical tests to give a false picture of a drug or medical device is shortsighted behavior, indeed. Even the fictional "Provassic" in "The Fugitive" would ultimately have been found to damage the liver, even had the evil owners of the drug company succeeded in silencing Richard Kimble forever. Losses to firms that engage in such practices will always outweigh any temporary gains made from selling the tainted product.

On the other hand, there is the solution provided by Angell and others: socialize medical research by turning it over to government. Instead of the present system in which private money does at least some of the medical research (and the Food and Drug Administration regulates the introduction of drugs and devices), the medical socialists want all funding provided by taxpayers.

Their reasoning is that by operating without a profit motive--which by its very nature must be corrupt--government researchers will be more honest than their private counterparts. Such logic is specious at best and thoroughly dishonest at worst.

First, the very nature of government is politics, which means that taxpayer monies allocated for medical research must first pass through a political process. Thus, we have the federal government allocating huge sums of money to research for AIDS and breast cancer, despite the fact that heart disease and diabetes kill far more Americans than do the former. That more money is given to AIDS and breast cancer research is testament to the power of political organization.

Second, government research is far less likely to go through the mechanism of peer review, something that is absolutely necessary for the integrity of the scientific process. For example, the Environmental Protection Agency’s latest pronouncements upon dioxin, the chemical that is a by-product of some industrial production, have all been made without the benefit of peer review. That is because extensive peer review would almost certainly come to a different conclusion than would the EPA, which has labeled dioxin "the most hazardous known substance on earth." This comes from the same government that recently was forced to admit that saccharine never posed the danger that the FDA said it did two decades ago.

The EPA is an intensely political organization that is beholden to its creators and sustainers in the Congress, along with environmental groups, from which it draws many of its administrators and employees. If it were shown, for example, that dioxin was relatively harmless, the EPA would then be hard-pressed to justify the hysteria it has caused in its various dioxin scares. (See my piece on Dioxophobia.)

The political nature of government-sponsored research means that in order for money to first be allocated, it must satisfy the agenda of an interest group. The costs to the group are almost zero (many left-wing activist organizations receive large funding from the government, anyway), while the benefits of such funding are huge. Thus, government domination of medical research also distorts the very necessary cost/benefit relationships that are essential to balancing the risks and rewards for discovery of new medicines.

To put it bluntly, Angell and her supporters are absolutely wrong. Whatever the conflict of interests that may accompany private medical research are dwarfed by the potential damage that go along with government control of medical (and all scientific) research. Angell may be trying to convince the rest of us she is seeking the moral high ground, but in reality she is wallowing in the dregs of statism.

---------------

William Anderson teaches economics at North Greenville College. Send him MAIL.