People care about health care because they care about health. That might seem obvious, but maybe not in Washington, where health care policy debates tend to be more about which pile of paperwork will be filled out by government bureaucrats versus insurance company bureaucrats than with actually improving health.
So today’s hearing by Chairman Ted Cruz (R-Texas) in the Senate Commerce Committee Subcommittee on Space, Science, and Competitiveness, “Unlocking the Cures for America’s Most Deadly Diseases,” was a breath of fresh air.
“The path to achieving medical breakthrough in cures is long and capital intensive,” Cruz said “yet often it seems when it comes to medical research we are penny-wise and penny-foolish. We pay billions or trillions on the back-end dealing with consequences of horrific disease, rather than investing and creating the incentives on the front-end to cure these diseases once and for all.”
That’s exactly right.
The most important thing for health policy to accomplish is to get the incentives right for new cures to be developed and made available to improve and extend people’s lives. That should mean less regulation and more competition.
When innovators are on the cusp of major advances in cancer, diabetes, HIV/AIDS and hepatitis C, among others, regulations and government programs that arbitrarily limit the economic rewards for a major breakthrough will make it more difficult to raise capital, stunt innovation, and hurt patients who rely on new advances.
“The average cost to get a single drug approved by the FDA, can cost between one and two billion dollars, in addition the regulatory burdens and bureaucratic unpredictability slows the ability of innovators to create new cures,” Cruz said. “Regulatory burdens and uncertainty is also having an effect on private investment, in 2011 the national venture capitalist association issued a report confirming that U.S. venture capitalists are reducing their investments in biotechnology and medical device companies.”
If anything, Cruz understated the problem. Developing new life-saving treatments is astronomically expensive. The total cost of bringing a new drug to market is now $2.6 billion according to the Tufts Center for the Study of Drug Development, in large part due to regulatory compliance expenses. And for biotech drugs the costs can be even higher.
Ted Cruz doesn’t have all the answers – nobody does – but credit him for asking the right questions.
“Whether it’s increased federal funding through direct medical research, whether it’s using tools such as prize competitions, whether it’s intellectual property reform or easing the burdens for approving new drugs and medical devices, all of those are steps that are going to need to be examined closely if we are going to take major steps toward new cures.”
Here are a few highlights from Senator Cruz today:

The full hearing is here.