NopeSINGLE PAYER MYTH NO. 8: A single-payer system will not hamper medical research.
The PNHP claims:
Medical research does not disappear under universal health care system. Many famous discoveries have been made in countries that have national health care systems. Laparoscopic gallbladder removal was pioneered in Canada. The CT scan was invented in England. The new treatment to cure juvenile diabetics by transplanting pancreatic cells was developed in Canada.
While it is true that medical research will not "disappear," it will surely decline. Consider what has happened to pharmaceutical research in single-payer systems, where the government imposes price controls on prescription drugs. A study (PDF) conducted by U.S. Commerce Department found that drug price controls in other nations reduced annual investment in pharmaceuticals by $5-8 billion, resulting in 3 to 4 fewer drugs being launched each year. The Boston Consulting Group found (PDF) an even bigger effect of price controls, showing a loss of $17-22 billion annually in pharmaceutical research resulting in the loss of 10 to 13 new drug launches.
In a free market, producers make a profit by providing services that consumers find useful. Profits also act as a signal to research - research dollars go toward services that make more profit. This is desirable because services that make more profit are the ones that consumers find most useful. Medical services that make profit -- i.e., the ones that patients find most useful -- will attract more research dollars.
In a single-payer system, government sets the prices for medical services. Since government is not good at setting prices, it inevitably over-pays for some services. Research dollars will go not necessarily toward the services that patients find most useful but toward the services that government over-pays since those will be the ones that will be most profitable.
With everyone covered the demand for medications will go up bring a larger market.