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  • Orange Book Blog is published for informational purposes only; it contains no legal advice whatsoever. Publication of Orange Book Blog does not create an attorney-client relationship. Orange Book Blog is Aaron Barkoff's personal website and it is intended for other attorneys. Orange Book Blog is not edited by McAndrews, Held & Malloy, Ltd. ("MHM") or its clients. No part of Orange Book Blog--whether information, commentary, or other--may be attributed to MHM or its clients. MHM represents many companies in the pharmaceutical and biotechnology industries, and therefore Orange Book Blog may occasionally report on news that relates to MHM clients. Orange Book Blog will always strive to be unbiased. All information on Orange Book Blog should be double-checked for its accuracy and current applicability. -- © Aaron F. Barkoff 2006-2014

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February 04, 2007

Comments

Jake Briskman

Thanks for the great postings. This is an awesome blog.

Before addressing the merits of Prof. Epstein's claims regarding the stifling of innovation, his argument, that there should be less government intervention (citing that the government should not go as far as allowing negotiation or allowing the re-importation of pharmaceuticals) is inherently flawed.
In 2003, with the Medicare Modernization Act, Congress enacted 42 USC 1395w-111(i)(2) ( the ‘non-interference’ clause) prohibiting the secretary from negotiating on behalf of seniors. The Food, Drug and Cosmetics Act prohibits the parallel trading of pharmaceuticals into the US. Negotiation and trading are realities of free markets, but somehow it is argued that to allow this to happen is ‘government intervention,’ when the reality is that not allowing these things to happen is government intervention.

On the merits of the argument (which is basically: anything done to lower profits will stifle innovation) the problem is that this argument contains the underlying assumption that the pharmaceutical companies fiduciary duty is to the general population to produce innovative drugs and not to their stockholders to increase profits. Their fiduciary duty is in fact to their stockholders to increase the share price, and this is done by investing the lionshare of their money into drugs that treat chronic conditions that are not even necessarily an improvement over the drugs already on the market. This is done for obvious reasons.

I invite comments.

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