The Necropolitan Sentinel

Is the drug industry starting to hollow out? Is the rate of innovation declining? Megan McArdle raises the alarm in The Atlantic:

Worried about me-too drugs? The medicalization of human variability in order to medicate them into compliance and/or sell them quack cures of dubious value? Ever-rising prices for brand name drugs pushing seniors into penury?

Well, you can breathe a (slight) sigh of relief. For the first time ever last year, the global drug industry cut its R&D spending. The trend is expected to continue, at least in the near term.

If you’ll excuse me, the rest of us will be over here in the corner, freaking out a little bit.

It’s tempting, of course, to blame this on Obamacare, and I certainly wouldn’t rule out the possibility that this is at least part of the explanation. But there’s no evidence that this is the case, other than the crude time correlation. Derek Lowe suggests that the answer is simpler: the return to R&D spending in the industry has been falling for a long time, as many therapeutic areas are crowded with generics (or soon-to-be generics) that already do a very good job. The remaining areas (cancer, central nervous system, obesity) turn out to be very tough, and there’s no guarantee that we’ll ever find pharmaceutical interventions that do what we want.

There’s an interesting discussion to be had about whether the market outcome differs from the socially optimal outcome–whether falling returns to pharmaceutical R&D mean that we should be putting more resources into it, or fewer. But I’ll leave that aside for the nonce, because I’m not sure what I think, and talk about what this means for the rest of the health care system.

You might initially think that this is good news for cost control–the expensive brand name drugs will all go generic, and we’ll save a bunch of money on prescription drugs. And indeed, this is absolutely true. But this will have repercussions for other areas of health care, and those repercussions are not good. While some drugs are simply an added expense (think chemotherapy prolonging the lives of people who would otherwise have died sooner), many of the real blockbusters substitute for labor-intensive treatment. Statins instead of cardiac catheterizations or coronary bypasses. Avandia instead of amputations. Hydrochlorothiazide instead of nursing home care for your massive stroke.

We’ll still have all those drugs, of course. But with less R&D, we’ll presumably see fewer pharmaceutical substitutes for the expensive conditions we still spend a lot of money treating, like Alzheimer’s. Which means that health care expenses might actually rise faster than we expect.

Read the whole thing; she’s got graphs, too. It may be that the drug companies are, in a certain sense, about to go into the weeds and slow down the amazing progress we’ve made in the past few decades. Which is a depressing thought indeed.

Is it possible to have an assertive foreign policy without taking the weight of the world on our shoulders? Alex Roarty writes about the biggest conflict among the contenders in the Republican Presidential field for The Atlantic:

What’s driving the sudden fissures between Republican presidential candidates on foreign policy?

Whether history, deficits, or politics, the foreign policy splits amount to the most substantive disagreements among the candidates on any policy issue. Even as economic concerns remain paramount, those differences could go a long way toward determining which candidate wins the nomination.

“It’s actually the makings of a big debate in the party,” said Charlie Black, a longtime GOP political operative.

Consider how two of the field’s top candidates have treated Afghanistan: Former Minnesota Gov. Tim Pawlenty criticized President Obama for withdrawing troops from the Middle East country before the military had won the war outright. But ex-Utah Gov. Jon Huntsman flanked the president on his left, saying Obama made a mistake by not cutting troops faster.

The president, whose own candidacy was propelled by his opposition to the Iraq war, suddenly finds his own foreign policy representing a middle ground of sorts in the GOP primary. Such a reality was unthinkable as recently as 2008, when the GOP candidates — led by eventual nominee John McCain — each espoused a decidedly hawkish view of America’s role in the world.

But the shattering of that consensus isn’t revealing new divisions within the party as much as laying bare old ones. Dating back to Sen. Henry Cabot Lodge (R-Mass.) — who took on Democratic President Wilson over the League of Nations and won — an isolationist strain has always run through the party, even if it remained on the fringes. The more prominent battle within the GOP, however, has been between Republicans arguing for aggressive foreign intervention, as President Reagan did, or those wary of overseas involvement and promoting a more pragmatic view, like President Nixon.

In the decade following 9/11, an aggressive foreign policy led by neoconservatives and supported by President George W. Bush and McCain controlled the party. But amid a rising tide of public opposition and soaring deficits, those conservatives derided by critics like McCain as “isolationists” have regained their footing in the party’s debate.

“I think the candidates are reflecting a division among Republicans, many of whom, because of their concern about the current state of economy, have decided we can’t really do both: engage in the rest of the world and fix our economic problems,” said former Rep. Jim Kolbe (R-Ariz.) the former chairman for House Foreign Operations Appropriations Subcommittee. “So they are taking a more pronounced view of that, which would border on isolationism or withdrawal or retreating from our international stage.”

Public opinion is also forcing the party to change course: The general public overwhelmingly, 59 percent, said they want the troops home as soon as possible in a mid-June poll from the Pew Research Center.

Our self-destructive dithering on the XL Pipeline could have even worse consequences than we thought.

Via Investor’s Business Daily, a few sobering thoughts about this Administration’s Energy Policies, and its deference to environmental extremists:

While the U.S. dithers with concerns about “dirty oil” from Alberta’s rich tar sands, energy-hungry China makes Ottawa an offer it might not refuse. Memo to Washington: Pipelines can run west as well as south.

When President Obama pledged to wean us off foreign oil, we hoped he didn’t mean our friendly ally to the north, Canada. Granted, it doesn’t have beaches like Rio, where we’re helping the Brazilians drill offshore, but we had hopes nonetheless.

Together, the U.S. and Canada have enough oil and natural gas locked up in shale formations, tar sands, Alaska, the Canadian Arctic and the Outer Continental Shelf to make OPEC pound sand. But we won’t drill for ours and apparently, we don’t want Canada’s.

With more than 170 billion barrels, Alberta has the world’s third-largest oil reserves, behind only Saudi Arabia and Venezuela and ahead of Russia and Iran. Daily production of 1.5 million barrels from the oil sands is expected to nearly triple to 3.7 million by 2025. The only question is, will this crude be flowing south to U.S. refineries or west for export to China?

At issue is the Keystone XL pipeline, parts of which have already been built, that would bring Alberta oil to Texas Gulf Coast refineries. The pipeline also could transport oil extracted from shale formations in the Rocky Mountain West. The U.S. Geological Survey estimates the region, dubbed the Persia of the West, may hold more than 1.5 trillion barrels of oil, six times the proven reserves of Saudi Arabia, and enough to meet U.S. oil needs for the next two centuries.

Our emphasis.

UPDATE: Instalanche; thanks, Glenn!