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Healthcare Reform That's Hard to Swallow (Los Angeles Times)
...However, the climate for drug development is deteriorating. Research and development investments per new drug introduction approximately doubled between the early 1980s and early 1990s, and only about three in 10 drugs approved by the Food and Drug Administration for marketing recoup their development costs.

President Obama has made it clear that he intends to eke out huge cost savings at drug companies' expense: "You've heard that as a consequence of our efforts at reform, the pharmaceutical industry has already said they're willing to put $80 billion on the table," and he added: "We might be able to get $100 billion out or more."...

...The stimulus bill has already set aside $1.1 billion to figure out how to distinguish the blue pills from the red ones, and reform legislation is expected to pour more money into these attempts to measure "comparative effectiveness."

But this approach ignores the futility of such one-size-fits-all prescribing of medicines. For many classes of drugs -- among them statins, anti-hypertensives, pain-relievers and antipsychotic medicines -- the selection of the appropriate drug among many possibilities requires a delicate balancing of effectiveness and acceptable side effects in each patient. Under Obama-care, you don't want to be one of those people who might really need the more expensive red pill.

Once the cheap blue pill has been anointed as the one eligible for federal reimbursement, there will be little incentive for companies to pour millions of dollars into developing a new generation of drugs that might in fact prove to be better -- but perhaps only for a small subset of patients....