Wednesday, December 15, 2004

Becker/Posner Blog II: An Idea, Not Necessarily a Good One, from Becker

by Tom Bozzo

The theme for the second round of Becker/Posner posts is pharmaceutical patents. Without doubt, this is an important topic. There is a bit of comedy early on in Becker's post, as he prefaces his remarks with the following revelation:

Some of the industry’s important products include aspirins, antibiotics, blood pressure lowering medications, cholesterol lowering drugs, Aids cocktails, drugs that slow the progress of breast and prostate cancer and Parkinson’s disease, effective sleeping pills, and anti-depressants that enable many mentally troubled persons to live reasonably normal lives.

I'll leave reaction to the reader's inclination to be set off by top-tier academics (or their over-credentialed, underskilled research assistants?) telling one the bleeding obvious.

We do, after some other discussion of elementary economics of drug pricing, get to a non-obvious proposal:

I have proposed elsewhere ( )) that the FDA trust patients more, and allow them more freedom to use new drugs by granting approval without the efficacy and randomized stages - this was the situation prior to 1962. At the same time, the FDA can tighten up safety standards, especially by putting resources into following more closely possible side effects over long time periods. Were my suggestion implemented, R&D costs would go down considerably, patent length could be considerably reduced, and yet companies would have more incentive to invest in finding new drugs.

I woke up this morning to an NPR story (link forthcoming) describing the case of a man who had given himself a serious case of lead poisoning via a "natural" medicine remedy that happened to be a veritable cocktail of heavy metals, and there are obviously adherents to forms of "medicine" that cannot work by physical causes such as homeopathy and religious faith-healing. Even patients interested only in scientific medicine can't be assumed to have good information on the efficacy of treatments — part of the reason we have professional specialization, after all. It's odd that a Chicago economist should forget about this. It can be safely assumed that, in the world Becker envisions, patients will have safe but not provably effective medications aggressively marketed to them. So "trust patients more" doesn't seem to be an obvious means of promoting health care efficiency in itself.

While unmentioned, I'd guess that recent unsafe medication problems inform the call for stricter safety "standards." In practice, this would mean a layer of trials to partly replace the foregone trial stages, which would cut into the purported savings. It's also unclear at best whether it's beneficial to the health system to increase the supply of not necessarily effective drugs. It is easy to imagine a system (think nutritional supplements) in which it's very difficult for the FDA to force an drug that's ineffective or proven dangerous only after long experience — and only after various damages have been done.

It would also be nice to see a system free of seemingly egregious statistical decision-making errors in the drug RDT&E process, such as that described by Robert Waldmann here, before performing major surgery on the evaluation process.

So we have a big idea, just not a good one, from Becker in week 2. What could be up for week 3?

(Apologies in advance to B-P-B commenters, whose efforts I haven't read, if I've duplicated any of your ideas.)
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