Many members of Congress treat the medical industry as a federal piggy bank that can be raided
In Washington, DC, no good deed is ever spared. And so it is with the innovators in our medical industry—companies that produce brake-through drugs, vaccines, and high-tech medical devices. As almost never before, these companies are being attacked by Congress for the sin of being profitable.
The most dangerous threat is the set of price controls on drug companies contained in the Build Back Better bill that has passed the House and is now before the Senate. It would take up to half a trillion dollars in profits from drug and vaccine makers — which could drive prices down in the short term at the cost of slowing the race for cures in the next generation of wonder drugs.
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Or consider the surprising health benefits from new medical devices, especially sophisticated imaging machines (MRI, CT, PET scanners) that patients and healthcare providers rely on for diagnosis and care. These devices save many hundreds of thousands of lives each year. They also reduce health costs by detecting diseases when they are treatable and verifying when expensive and invasive surgery is necessary.
But many members of Congress view the industry as a federal piggy bank to be raided. Remember that ObamaCare was funded, with a special tax on these device technologies.
It doesn’t make sense because profits aren’t bad—they drive innovation, investment, and medical progress.
Washington now has another front and center issue sometimes called “right to repair” legislation. The question is whether the federal government should compulsorily force the transfer of intellectual property for the purposes of “repairing medical equipment.”
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These laws give third-party, independent service contractors access to proprietary information servicing medical devices, which some say will reduce the cost of servicing and repairing machines and equipment by millions of dollars. It’s great. But the law would force original equipment manufacturers (OEMs) to hand over intellectual property, including proprietary training materials and schematics. The law would make it easier for competitors to “copy cat” devices protected by patents.
If a medical device is not properly serviced, it can pose serious risks to patients, physicians, technologists and health delivery organizations. Mistakes could result in injury or death to the patient and/or the device operator. Poor quality images from improperly serviced imaging equipment can lead to a missed or delayed diagnosis at worst, and unnecessarily repetitive imaging procedures at best.
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If the hospital or doctor doesn’t want to buy the machines with the service contracts that come with them, they can shop elsewhere. But requiring a manufacturer to leave trade secrets to a third-party servicer can be disastrous for the innovation process. It would be like giving RC Cola access to Coca-Cola’s recipe.
What we have here is an excellent case of short-term savings versus long-term innovation and the competing interests of healthcare technology. Patent-protected medical innovation drives up costs in the short term, but the societal benefits outweighed by health care breakthroughs.
This is true not just in America, but around the world. According to National Bureau of Economic Research (NBER), between 2000 and 2009, new treatments increased life expectancy by more than 70 percent in 30 countries.
Why in the world would Congress or the Food and Drug Administration want to do anything to slow it down just to save a few bucks?