Tom Price is a former Republican U.S. representative from Georgia and former secretary of health and human services.
Innovation in the free market never ceases to amaze — and in the medical world, it saves lives. This week, drugmakers Merck and Moderna announced their latest medical breakthrough: a personalized vaccine that helps prevent the recurrence of skin cancer. The full results of the clinical trial have yet to be released, but the preliminary findings are exciting.
The discovery didn’t occur in a vacuum. America’s public health institutions certainly played a role, and the federal government has long funded research that contributes to medical advancements. But federal bureaucrats would be hard-pressed to achieve feats like this on their own — not because government scientists lack the smarts or the funding, but because the incentives are misaligned.
The federal government has no financial reason to innovate. The National Institutes of Health is built for publishing academic papers and providing health recommendations, not bringing new commercial products to market. It functions similarly to other government agencies: The Transportation Department doesn’t manufacture trucks, nor does the Agriculture Department till cornfields in Iowa.
By contrast, pharmaceutical companies operating in the free market must either develop valuable drugs or face bankruptcy. Ardent critics of laissez-faire economics will argue this means drugmakers prioritize profits over patient outcomes, but the two goals are not mutually exclusive. Lives can be improved and extended as stock prices tick up.
The recent boom of weight-loss medications proves the trade-off is a fiction. For decades, obesity was considered one of the biggest health crises facing the country, driving heart disease and diabetes. But now, obesity rates are finally declining thanks, in part, to the wide availability of GLP-1s. Share prices are rising for companies that develop and sell GLP-1s because of the drug’s contribution to public health.
Merck and Moderna’s announcement this week suggests that drugmakers are one step closer to the holy grail of medicine: taming cancer. If the results hold and patients benefit, the market will — and should — reward Merck’s and Moderna’s shareholders. That will light a fire under other entrepreneurs and scientists to hasten the arrival of the next leap forward in medicine.
Medical innovations, such as the skin cancer vaccine, are being created in spite of the political class, not because of it. In 2022, President Joe Biden and his allies in Congress established a government price control scheme for select medicines accessed through Medicare. The goal was to save the U.S. government money, but it had a chilling effect on new drugs making it to hospital rooms. If the government required Ford to sell Mustangs for half their market price, would the company develop new models?
Republicans are not immune to such self-destructive policies. The current administration is experimenting with its own set of price ceilings that link drug costs to what consumers pay in foreign countries. The exercise can only undermine medical innovation and threaten America’s dominance in biotechnology.
Market feedback in the form of sales figures or stock prices is important. The information helps steer the U.S. economy toward meeting consumer needs and preferences — including the development of lifesaving treatments, therapies and vaccines. The demand for cancer cures is high, but Washington needs to avoid distorting economic signals if it wants to turn scientific promise into tangible wins for patients.
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