The Great Stagnation in medicine

by on February 17, 2011 at 6:55 am in Economics, History, Medicine | Permalink

Here is one bit from a very good Robert Gordon essay (which I will cover again in a while):

…if one starts down the road of comparing changes in life expectancy, the yearly rate of increase in life expectancy at birth during 1900–50, resulting in substantial part from the inventions of the Second Industrial Revolution, was 0.72 percent per year, the 0.24 percent annual rate during 1950–95.

James Le Fanu, in his 2000 history of modern medicine, lists definitive moments of modern medicine.  In the 1940s there are six such moments, seven moments in the 1950s, six moments in the 1960s, a moment in 1970 and 1971 each, and from 1973-1998, a twenty-five year period, there are only seven moments in total.

For his "Dates of the discovery and sources of the more important antibiotics," the list starts in 1929-1940 with penicillin and ends in…1963, with Gentamicin.

Ezra has a very good post on penicillin.  Megan has a very good post and piece on the drying up of the pharmaceutical pipeline.  Andrew Jack has a very good and scary piece on the withering of pharmaceuticals innovation in the UK.

As Le Fanu writes: "Currently most medical researchers would concede that progress has slowed in recent years…"

As an aside, this has a number of political economy implications for health care reform, none of them cheery.  In both Washington and in the blogosphere, we're very focused on insurance and coverage issues, but is not the innovation pipeline more important?  Does it receive one-tenth the discussion?  One-fiftieth?  Does a slow pipeline mean that health care policy is doomed to be unpopular?

Quick quiz: is health care a growing or a shrinking part of the U.S. economy?

JT February 17, 2011 at 3:31 am

Doesn't that all follow the typical S-curve for design/innovation? Progress is a little slow after the initial innovation, then picks up speed, rises sharply before tailing off at the end if its 'life'. This would indicate that the next step in this sector would be a 'step change' to a different way of doing things.

Libfree February 17, 2011 at 3:56 am

Lots of work is being done with stems and cancer research. Much of this doesn't qualify as pharmaceutical. Personally I see this as a rapidly developing sector in coming years.

dearieme February 17, 2011 at 3:59 am

Has anyone considered the possibility that innovation in medicine has slowed because large swathes of funding have been provided on premises that are simply false? For example, what if the people who reject the "cholesterol hypothesis" are right?

If so, then there must be a possibilty of a surge in research productivity once these errors are widely accepted to be such.

Rahul February 17, 2011 at 4:20 am

It takes time for posterity to decide which breakthroughs are most memorable. The year 2000 list of definitive moments lists 7 ( the max) for the 1950's decade. Had this list been produced in 1960 do we think the author would have identified the same 7 events?

Such historical analysis is biased towards older events that have had time to sink in and be vetted. Look at the Nobel's for example. Most achievements cited are a bit older and late in the discoverer's life.

Such list-based evidence for the great stagnation seems to be flawed.

Jonathan Beerhalter February 17, 2011 at 4:26 am

I'm going to make the absolutely crazy claim that a slow medical pipeline is a good thing for governmental budgets. The problem with the healthcare debate is that everyone wants an all you can eat plan for the latest medical technology. If we stop having new technology, then theoretically, we should get better at building it, and be able to produce it more cheaply, in which case health care costs should fall.

Of course, that's bad for consumers as a whole, but hey, the end of the healthcare debate was probably going to be bad for consumers as a whole anyway.

Erik February 17, 2011 at 5:00 am

There is a fundamental problem of complexity. The breakthroughs of the first 2/3 of the 20th century were dealing with challenges that seem relatively simple by today's standards. We were fighting external maladies.

Most of today's first-world disease come from within the body (heart disease, cancer, etc.) Fighting these with medicine involves understanding the genome, the epigenome, and tackling the fact that we are comprised not only of our own genome, but also of the genomes of all of the bacteria and other organisms that live within our bodies. The mass of the human body is largely non-human, but heavily influences our genome expression and our health. The knowledge required to tackle these is on a logarithmic scale compared to combating polio, smallpox, etc.

Then there is a secondary problem of policy and incentives. I worked as a consultant in the corporate finance area of a major Pharma company for the better part of a decade. I watched the shift away from R&D (which was already well underway) and instead prioritizing funds for marketing and sales. This was a reaction both to the natural slowing down of the pipeline due to the fundamental issues above, and also a response to policy changes that allowed direct to consumer advertising beginning in the 1990s. The corporate mindset of the Fortune 500, already short-term, become even shorter-term over the past 20 years, just as the patience-level required for R&D increased significantly. As a result, resources were diverted and the game shift from inventing to selling.

Finally, there is the "financialization" of the industry. I read an interesting take on GE under Jack Welch here at Rortybomb.
http://rortybomb.wordpress.com/2011/01/21/immelt-

Many of the points apply to what I saw in large pharma:

- Buy and sell companies through acquisition and divestment to achieve returns and growth objectives;
- Rrely on large-scale acquisition to prevent like-for-like comparisons and to increase opacity and the power of narrative;
- Grow the financial-services business up to the limit of the company’s credit rating; -note that pharma has no "financial services", but managing and investing their own cash and assets has become an ever-increasing part of the game
- Accept the balance-sheet costs in terms of return on capital but focus on managing return on equity and cost of capital

I cannot overstate the importance of M&A to mask business results and to make like comparisons year over year impossible. Then the C executives can come up with a nice narrative to gloss over any big issues and/or claim credit for any major successes.

In short, all of the strategic moves were on the business strategy side. R&D was the red-headed step child.

Cliff February 17, 2011 at 5:24 am

Really stupid to compare changes in life expectancy at 50% of maximum life span with changes at 80%. Obviously we cannot exceed maximum lifespan without a breakthrough much bigger than all previous breakthroughs (calorie restriction aside).

charlie February 17, 2011 at 5:28 am

Tyler, if you were sick would you rather

1. Go to a doctor in the 1960s?
2. Or go to one today?

Wimivo February 17, 2011 at 5:53 am

Uh, shouldn't you start with Sulfa before penicillin?

Roberta February 17, 2011 at 6:07 am

Life expectancy in itself has certain limits no matter how medicine advances

Andrew February 17, 2011 at 6:21 am

"stupid to compare changes in life expectancy at 50% of maximum life span with changes at 80%."

That's the point.

Andrew February 17, 2011 at 6:25 am

"Life expectancy in itself has certain limits no matter how medicine advances"

Possibly not, but they will be incredibly expensive to surpass and possibly politically impractical. It's interesting that some of the people who criticize Christians for having an end-times belief themselves fetishize death and suffering.

Roland February 17, 2011 at 7:21 am

I continue to think that it is sooner than we think, based on the complexity question, in particular, and the implication of that for that for the actual diffusion and adoption of innovation. The biotechnology revolution, for example, will only really "show up" in terms of cost of care and patient outcomes following fundamental changes in the way the health sector uses information to support clinical decisions. This is hard and complicated, but it will get done.

Yancey Ward February 17, 2011 at 7:22 am

Life expectancy in itself has certain limits no matter how medicine advances

Almost certainly wrong in the sense I think you meant it. Aging and decay are just another disease that is not only possibly curable, but plausibly so in time. For the moment, until those breakthroughs occur, life expectancy should follow an S curve.

John Dewey February 17, 2011 at 7:36 am

E. Barandiaran: "And please stop linking to journalists as sources of evidence."

I agree.

Andrew February 17, 2011 at 9:48 am

Erik makes an interesting point. The low-hanging fruit was removing the obstacles to letting the body work as…ahem…designed. The much much higher fruit is improving upon it.

Eric February 17, 2011 at 10:06 am

@ JT – excellent point.

Is it not time that the paradigm of "you've got a problem, here's a pill" is over?

Steve Sailer February 17, 2011 at 11:31 am

There has been a huge amount of money and talent invested in genetics over the last 20 or so years. The health payoffs so far have been much less than had been expected.

Steve Sailer February 17, 2011 at 12:02 pm

A fad that swept the pharmaceutical industry a few decades ago was the idea that it would be more efficient to design the molecules of new drugs from the ground up based on our new understanding of first principles rather than look for existing biochemicals in living things (e.g., the way penicillin was discovered). On the whole, this doesn't seem to have turned out to be correct.

World Cup Rugby Shir February 17, 2011 at 10:25 pm

We have breakthrough discoveries in Medicine and other health treatments. It's the harmful toxins that are continuously being produced by our modern world that needs to be addressed.

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