Peak Drug Discoveries?

Now, I have heard it all. First, we started with Malthus and peak food, then there was peak oil and peak gold. Now Megan McArdle declares drug discoveries have peaked:

I have an article in this month's magazine about pharmaceutical pipelines.  It sounds dry (and perhaps the piece is, a bit), but it's incredibly important.  Ever since what looks like a historical peak in the mid nineties, the number of new medical entities being approved by the FDA has been in a long, slow decline.

This is, obviously, a good place for a typical libertarian jeremiad against the Food and Drug Administration, but while I think there are quite a lot of problems with the way that that body operates, it cannot bear all of the blame for the decline.  As I discuss at some length in the feature, it may just be getting harder to find new drugs.  There are a lot of reasons for this, but all of them add up to a slower pace of drug discovery.

Since medical discoveries are just that "discoveries," we just don't know what we are not seeing until a discovery is made. There is thus no way to no the size and quality of such advances. McArdle simply doesn't understand the nature of discovery, or she is inhaling too many inside the beltway fumes to allow her mind to put two and two together.

It shouldn't come as a surprise that McArdle's discovery of fewer drug discoveries allows her to leap the possibility that Obamacare is a good thing (though she's really not sure--give her a few years, she says):

Obviously, one of the questions this raises, for me and long time readers of my blog, is whether this changes how I feel about health care reform. That's a complicated question, for a lot of reasons--for starters, watching the adminstration [sic]and the state of Massachusetts fool around with quasi-controlling insurance prices, I now think that I may have seriously underestimated the risk that this thing will turn into a massive fiscal disaster that could precipitate a serious budget crisis. (Of course, it's a work in progress, so ask me again in a few years). But obviously, one of my major objections has been that the program would slow the rate of medical innovation; if medical innovation is slowing anyway, maybe that's not such a big problem....I'm not sure what to think, actually, for a couple of reasons.

Of course, the reality is that drug discoveries will decline, not because we have reached some kind of nutty "Peak Drug Discoveries" but because Obamacare is all about disincentives. With less rewards for discovering new drugs, there will be less incentive to try and find such drugs and less incentive to invest in drug discovery research.