The NYT told readers that PhRMA, the pharmaceutical industry's trade group, had built: "a compelling public policy argument on behalf of prescription drugs: they account for only 10 percent of the nation’s health care spending. They help people avoid hospitalization and other more costly medical treatments and their profits pay for research and innovation that result in newer, better drugs." Hmmm, how did they determine the case was "compelling." One study touted by PhRMA that purported to show the great health and economic benefits from prescription drugs also showed that there is no link between education and productivity and that life expectancy falls as income grows. (An update of the study finds no link between smoking and life expectancy.) These absurd results are obviously the result of garbage regressions that were designed to show positive effects for new drugs. Such shoddy research would usually be laughed away by serious researchers, by PhRMA was able to use its money to get this study taken seriously by Congress and even got an oped based on this research printed in the Washington Post. In fact, PhRMA has not made a compelling case, it has just used its money and power to buy legitimacy among key arbiters of public opinion. Btw, it is probably worth noting that the "only" 10 percent of the nation's health care spending touted by the NYT is projected to come to approximately $3.5 trillion over the next decade or more than $10,000 for every person in the country. The NYT usually does not use the adjective "only" in describing such sums.
--Dean Baker