Today and yesterday on CNBC I keep hearing about how managed healthcare and price controls on drugs are going to spell the end of research today. It is a very very tiring argument. My sister about fifteen years ago dated a PHD student that was a cancer researcher and he told me an interesting thing. He said that there will never be a cure for cancer because it is more profitable to keep people terminal than actually solve it. That did depress him but he said he would continue to find a cure to cancer even though of the attitude.

This attitude is cynical and one wonders if a study has been made on drugs.

8. Americans pay for more R&D than any other country because the United States accounts for more sales than any other country. But while the U.S. accounts for 51% of world sales, it took 58% of global R&D expenditures invested in the US to discover only 43% of the more important new drugs (NCEs) (European Federation of Pharmaceutical Industries and Associations 2003). This means that other countries are helping to pay for the large, inefficient U.S. R&D enterprise, the opposite of what the editors of Business Week claimed (Business Week editors 2003). William Safire’s claim of a "foreign rip-off" as Americans pay for the world’s R&D is contradicted by the facts above (Safire 2003).

13. These facts constitute the Blockbuster Syndrome: the lure of monopoly pricing and windfall profits for years spurs the relentless pursuit for drugs that might sell more than $1 billion a year, regardless of therapeutic need or benefit. Research projects for the disorders of affluent nations proliferate, as do clinical trials. Doctors are paid like bounty hunters to recruit patients for thousands of dollars each. Most patients get the misimpression that the experimental drug will be better than existing ones (Wolpe 2003). The corruption of professional judgment, ethics and even medical science follow (Williams 2003; Wazana 2000; Barnett 2003; Lexchin, Bero, Djulbegovic et al. 2003; Bekelman, Mphil, and Gross 2003; Villanueva, Peiro, Librero et al. 2003; Fletcher 2003).

I don’t deny that drug research is expensive. What I deny is that drug research is effective as it could be. And these run away expenses are not going to last much longer. If the US does not cap the expenses then very few people will be left over who can afford the payments.

What I will invest in, when it comes to healthcare are offshoring projects or Medical Tourism. There is no reason why a doctor in India, Eastern Europe is not as capable as doing the work as the local doctor. The only reason why people don’t do it right now is because they have a psychological block. When things are purely psychological it means that things will eventually change.

With respect to the drug makers what it means is that the drugs will be sold in the offshore place at a lower price than at home. While the drug makers will try to stop this trend they will be powerless, and if they try they will raise the ire of the local countries.

Once the drug makers have capitulated I will be a buyer of the drug makers. Until then no dice…