Frank Lichtenberg and the cost of saving lives through pharmaceuticals

Humans are living longer, better lives thanks to innovations in prescription drugs over the past three decades, according to several new studies by Frank Lichtenberg, the Courtney C. Brown Professor of Business.

Every year, according to Lichtenberg’s research, drugs launched since 1982 are adding 150 million life-years to the lifespans of people in 22 countries that he analyzed. He calculated the average pharmaceutical expenditure per life-year saved at $2,837 — a bargain, he says.

“According to most health economists and policymakers, if you could extend someone’s life by a year for less than $3,000, that is highly cost effective,” says Lichtenberg, who gathered new data for these studies to cast a never-before seen view of the econometrics of prescription drugs. “People might be surprised by how cost-effective drugs appear to be in general.”

…To tease out the answer, the professor gathered data on drug launches and the age-standardized premature mortality rate by country, disease, and year. Drawing on data from the World Health Organization, the United Nations, consulting company IQVIA, and French database Theriaque, Lichtenberg was able to identify the role that pharmaceutical innovation played in reducing the number of years of life lost due to 66 diseases in 27 countries. (“Years of life lost” is an estimate of the average years a person would have lived if he or she had not died prematurely.)

Between 1982 and 2015, for example, the US saw the launch of 719 new drugs, the most of any country in the sample; Israel had about half as many launches. By looking at the resultant change in each country between mortality and disease, Lichtenberg calculated that the years of life lost before the age of 85 in 2013 would have been 2.16 times as high if no new drugs had been launched after 1981. For a subset of 22 countries with more full data, the number of life-years gained in 2013 from drugs launched after 1981 was 148.7 million.

Here is more from Stephen Kurczy, and here is previous MR coverage of Lichtenberg and his work.  Given these estimates, do you really think we should be spending less on pharmaceuticals?

Comments

I don't really understand this - what does it mean "launched"? Does that mean approved by the local regulator or just invented in that country? Is there really a large set of effective drugs that are only approved by the US and not in Israel?

Good question, and it doesn't seem answerable without paying for access to the paper.

It means that many medicines are not available in many countries even if they have formal market authorisation. You can buy them privately, but they are not reimbursed by the public authorities or insurance companies. Basically, it is because governments won’t pay the price asked for by the manufacturers, so patients don’t get the drugs

'Basically, it is because governments won’t pay the price asked for by the manufacturers, so patients don’t get the drugs'

Nope, not generally. What happens instead is that a major buyer like the Krankenkassen in Germany look at efficacy and price, and then negotiates prices using their market power.

Further, if for some reason you as health insured patient in Germany feel that you must have the latest reformulation of a prdocut that is no longer under its original patent, you can just pay for it yourself, at the price the pharma company charges.

Oddly, most Germans seem to feel that supporting a pharma company's bottom line has little to do with rational health care decisions, so they simply use what is cheapest - almost as if price is actually important.

In reality, pharma's "bottom line" is typically 10-18% profit margins. This is less than half the average social media company's profits. Profit margin for the whole sector last year were around 14% which was about 1 point higher than the entire S&P 500.

The truth is that negotiating price reductions more than 20% from US average means that the drug company would not make the drug if your nation were the only buyer. Deals like you describe mean that drug companies must be more selective in what drugs they develop and the profit margin in the US must be even higher for the drug to get clinical trials.

If Germany were willing to pay profit margins for pharmaceuticals equal to say, what they are willing to pay Heineken, we could reasonably expect to save a few million lives a decade. Granted most of them would be Africans years later, but still it strikes me as odd that Germans would rather money go towards beer than saving lives.

Third try, no link info at all.

'if your nation were the only buyer'

I'm American, but if you think Bayer is simply going to ignore the German market because it cannot figure out how to make a profit in it, well, welcome to the fact that Bayer spends only a small fraction on marketing Germany compared to the U.S. Once on the Krankenkasse list, you are golden, and do not need to send reps around on a regular basis. Along with such marketing not being allowed in the first place anyways, as noted here - or not, as it seems this web site is filtered.

'According to the case law of the German civil courts, the term “advertising” implies any kind of door-to-door information, canvassing activity or inducement designed to promote the prescription, supply, sale or consumption of a specific pharmaceutical product. Therefore, almost all information which is published by a pharmaceutical company to the general public or to third parties is very likely to be classified as “advertising”.

However, German law differentiates between so-called “product advertising” and “image advertising”. Product advertising means advertising of a specific product, while image advertising is characterised by advertising with the name of the pharmaceutical company or the entire range of products without any reference to a specific product. “Image advertising” is not subject to the rules of the HWG.'

'what they are willing to pay Heineken'

Which is about zero - Germans do not buy Dutch beer. And just imagine how much money could be saved in the U.S. if the American market cut out the sort of marketing activities not allowed in Germany.

Seriously, you never know what is allowed to link to or not - linking to a site that says about itself 'The ICLG series provides current and practical comparative legal information on a range of practice areas.' is not allowable.

Wikipedia is so much easier, since it basically is never filtered.

Total industry wide marketing costs, per a hostile source (Wolosin and Schwartz), were $29.9 billion in 2016. Total revenue for pharma in that year was $446 billion. Or around 6.7%. Average profits that year were around 12%.

So again, price reductions of more than 20% of average US prices are going to make the drug sufficiently unprofitable that if everyone paid that price, then future drugs would fail to come to market.

I would suggest that you don't make the silly mistake of looking at the line items in pharma's budgets. They intentionally group a lot of unrelated overhead into the line item that includes advertising. They do this in order to avoid triggering regulatory issues. In reality pharma spends a lower percentage on advertising than most industries.

And no, Heineken has been highly active in Germany. They sell over a million hectoliters of beer annually in the German market. Or did you forget the buying spree they went on for German brands in the early 2000s?

I was not referring to the Germans. Their system is unique in the world outside of the US. Why just pick the exception to prove your rule

if you want to pay more for drugs go ahead thats your choice, my choice is different

How does this square with the finding that health insurance does not improve health outcomes???????????

People without health insurance still get most of these drugs. Drugs that launched in 1982 have been off patent for decades and the crazy high prices are only during the exclusivity time frame. Lipitor, for instance, dropped 95% of its price when it went off patent.

And even without insurance, you can typically get your meds. Drug companies have charity programs. They give out "samples". And many drugs are dispensed by hospitals via mandated emergency care via EMTALA which requires care even when people cannot pay.

The truth is that lacking health insurance is a far, far cry from not getting healthcare. I have scads of patients who refuse to sign up for Medicaid because it is too much of a hassle and they have figured out that I will patch them up regardless and they know enough phrases to say that it is cheaper for me treat them beyond the minimal required level rather than have them invent some potentially life threatening complaint that will require a thousand bucks in tests.

Outside the US, well drug companies need to recoup their costs exactly once. With everywhere else deciding that they are willing to let people die instead, the drug companies focus less effort on health problems not present in the US and overall rates of health improvement decline.

'Lipitor, for instance, dropped 95% of its price when it went off patent.'

Not according to this, from 2016. particularly when looking at sales - 'On the other side, the generic version of Pfizer’s Lipitor Atorvastatin Hexal® offered a price advantage of up to 85% upon its launching.' https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4899342/ Of course, today, it might be 95% cheaper than in 2012 - especially if the generic fell in price too.

'With everywhere else deciding that they are willing to let people die instead'

This is fantasy. Unless you believe that the American health care system never, ever denies any patient access to treatment due to the cost of that treatment. (Something that is also a fantasy, of course.)

'the drug companies focus less effort on health problems not present in the US and overall rates of health improvement decline'

So, you really think that the 6 of 10 largest pharma companies not based in the U.S. simply ignore their home markets completely? Admittedly, considering that many health problems in the U.S. seem to be based on an American lifestyle, it is quite possible that drug companies focus on the exceptional opportunities offered by the U.S. Including something such as a major drug purchaser forbidden from negotiating on price, by law. 'When you're one of the biggest buyers of pharmaceuticals on the planet, you should have a big stick to negotiate the best prices.

Medicare, which insures more than 60 million beneficiaries, doesn't have that power, mostly because Congress stopped it from getting the best drug prices years ago.' https://www.forbes.com/sites/johnwasik/2018/08/10/why-medicare-cant-get-the-lowest-drug-prices/

Your total inability to comprehend the market dynamics of an industry with large capital costs and ~0 marginal cost is one of the more hilarious things on MR.

You should ask GMU for a refund on your degree.

'the market dynamics of an industry with large capital costs'

Which has discovered a market in one country which can apparently be sucked dry, with the willing cooperation of those footing the bills.

True. America subsidizes pharmaceutical development for the entire world.

I don’t know how to explain the pharmaceutical market to an imbecile.

I know conspiracy theories are important to your internal life narrative. So, please don’t murder anyone, you’re totally right about everything and you should channel it into your vote not murder.

Of course the generic fell in price. It is almost if there were a whole crop of statins and as each one came off patent you had ever more options for prescribing and competition reduced price. I mean seriously, this ain't rocket science.

The vast bulk of a drug's utility to humanity comes after patent. Lipitor, for instance, was discovered in 1982, patented in 1986, hit the market in 1996 and was off patent in 2011. That is not uncommon. It had a a whole 15 years to earn whatever value it could. Since it came off patent prescriptions have increased markedly and it is now used worldwide. It will continue to be used until it is completely displaced by a newer medication.

Diphenhydramine (for instance) is still among the most prescribed drugs even though it has been off patent since the Boomers were kids.

And this is the financing conundrum. High profits today mean more new medications tomorrow. If we exert monopsony power on the pharma companies, then I see no reason why they would not consolidate (either threw direct mergers or bankruptcy) and the new equilibrium will be fewer drugs coming down the pipeline.

Frankly, I wish I lived in a world where spare capital throughout the world was chasing newer, better drugs instead of the next "innovation" in social media.

'do you really think we should be spending less on pharmaceuticals'

Which 'we'? The world is undoubtedly paying less, at least according to how that figure was calculated - 'This cost is likely an overestimate because the prices of old drugs tend to rise more slowly when new drugs enter the market, as Lichtenberg lays out in a new working paper, titled “The effect of new drug entry on old drug prices in the US.” Calculating the effect of new drug entry on old drug prices in the US from 2010 to 2016, Lichtenberg found that inter-brand competition from new drugs reduced the price of “old drugs” (those launched before 2011) in 2016 by between 5 and 12 percent.'

But it is nice to see someone attempt to quantify the churn that keeps drug prices higher than necessary, at least in the American market. The pharma industry has devoted a lot of time and effort to creating those excitingly well marketed new formulations so as to ensure a reliably large profit margin.

Basic pharma R&D is left up to the taxpayer, as noted here, using a time frame that completely covers Lichtenberg's - 'The CISI study, underwritten by the National Biomedical Research Foundation, mapped the relationship between NIH-funded research and every new drug approved by the FDA between 2010 and 2016. The authors found that each of the 210 medicines approved for market came out of research supported by the NIH. Of the $100 billion it spent nationally during this period, more than half of it — $64 billion — ended up helping the development of 84 first-in-class drugs.' https://portside.org/2018-03-04/taxpayers-not-big-pharma-have-funded-research-behind-every-new-drug-2010

And isn't it consensus in this comment section that healthcare has no effect on lifespan, or is it merely that the definition of healthcare used by so many here excludes pharmaceuticals?

I don’t know where Portside got its numbers, but the global clinical trials market size was estimated at $44.2 billion in 2018. It is true that much basic research is done by federal funding, but most clinical trials for government approval is done by private pharma companies - including blowing billions on trials of drugs that don’t work out.

They got their numbers from here - https://www.pnas.org/content/115/10/2329 As noted in the article - 'Just how important is our publicly funded research to Big Pharma and Biotech? According to a new study by a small, partly industry-funded think tank called the Center for Integration of Science and Industry (CISI), it is existentially important. No NIH funds, no new drugs, no patents, no profits, no industry.'

'including blowing billions on trials of drugs that don’t work out'

Sure, they have costs - like deciding which drug research funded by taxpayer money is worth taking a chance on in the first place. As compared to funding such research themselves, to see what research results would be worth taking a chance on.

From the abstract - 'This work examines the contribution of NIH funding to published research associated with 210 new molecular entities (NMEs) approved by the Food and Drug Administration from 2010–2016. We identified >2 million publications in PubMed related to the 210 NMEs (n = 131,092) or their 151 known biological targets (n = 1,966,281). Of these, >600,000 (29%) were associated with NIH-funded projects in RePORTER. This funding included >200,000 fiscal years of NIH project support (1985–2016) and project costs >$100 billion (2000–2016), representing ∼20% of the NIH budget over this period. NIH funding contributed to every one of the NMEs approved from 2010–2016 and was focused primarily on the drug targets rather than on the NMEs themselves. There were 84 first-in-class products approved in this interval, associated with >$64 billion of NIH-funded projects. '

There is a reason why the pharma industry wants the American taxpayer to contribute to the industry's profits - otherwise, they would need to find another source of funding they can profitably monetize, without spending those billions themselves.

The part I disagree with is the graph where they claim that pharma companies spend "$118 million" on clinical trials. That is clearly wrong, the correct number is $44.2 billion.

$118 million. Jesus Christ. What’s a few orders of magnitude between friends?

I think some people like our former GMU public affairs friend clockwork, believe that pharma companies take public research, slap their name on it, and rake in the bucks.

In reality, pharma companies are the organizations with the expertise to take the research, create drugs, and then shepherd the drugs from phase 1 - phase 4 clinical trials.

More recently they buy the small start up that creates the drugs, but the principle is the same. They exist to shepherd the drugs through clinical trials and manufacture the product.

I'm quite skeptical of this claim, as the analysis appears to relate life expectancy, disease survival, and drug introductions at a country level and then infer benefit of drugs from that. Controlling for other changes in healthcare that may be associated with drug introductions would be a big problem with this design.

The paper doesn't seem to be freely available, so it's not clear how this was addressed.

For the US and Israel pretty much all the other determinants of health are running in the wrong direction. If they corrected for those metrics in the paper, we would see even larger returns on pharmaceuticals. Without advances in health care, the rise in obesity, irreligion, loneliness, drug use, and social media would have resulted in far more dramatic drops in life expectancy.

Africa and Asia, sure there will be lots of secular gains. But as those places begin to develop obesity and other poor health determinants the drugs will save massive numbers of lives. After all a credible case is made that it might save lives on net to dump statins into the water supply. Africa will have the demographics for that in no later than another 20 years on present trend-line.

You are seriously suggesting that 'irreligion' is on the rise in Israel? A complicated picture, of course, but this growing irrelegion cannot be discerned in Israel - https://www.pewforum.org/2016/03/08/israels-religiously-divided-society/, particularly when one includes Arab-Israelis, or considers the rise in population share of the Orthodox over more than decade, as noted in a sidebar at the link.

Yes, I suggest you check your own source. Per Pew the the number of Israelis who don't observe religion has grown from 16% to 26%. That is pretty significant and best evidence would suggest a pretty significant rise in all cause mortality ceteris parabis.

Israel seems to be having a flight from the center with respect to religion. I have seen good evidence that ceasing religious praxis is bad for your health; I have not seen good evidence that adhering to the most strict form of a religion results in that much further benefit.

Also, I should mention that the rise of irreligion is not a permanent phenomena. World wide, we expect to see the irreligious percentage decline unless trends change. The population gains of the Haredim will take some time to work through to the prime death cohorts, so yes increasing irreligion by the groups with the greatest impacts on health and mortality does tend to lower outcomes.

with regards to
surely "rise in irreligion" doesn't reduce lifespan. It is religious extremism, or as Mr Obama put it, abuse of the world major religions, that reduces average lifespan, as seen recently in New Zealand and Sri Lanka.

Lethal violence is fast becoming a rounding error in lifespan calculations (not there yet unfortunately). By far the most common killers are chronic health conditions with variable rates of health decline. The data is pretty solid, being religiously observant has ~40% lower hazard of mortality. That is well more than the effect from curing cancer.

The big confounder is that the irreligious tend to be wealthier and wealth, particularly with global scale comparisons, is highly tied to mortality.

Personally, my best theory is that irreligion is luxury good. If you are on the top, religion asks a lot of you and you can "buy your way back" to health with expensive medications and social programs. When you lack resources, religion has far too much utility to ignore.

Similarly (albeit in the opposite direction), it doesn't seem to account for the fact that many drugs substitute for more expensive, often surgical, treatments.

Mood affiliation for $1000, Alex!

Surely this is some right-wing undergraduate's idea of a parody response intended to make Jeri Studebaker look like an idiot.

Jeri Studebaker is a real name? And apparently an author - the things you learn here.

Despite increases in diabetes prevalence and incidence among children and adolescents during the 14 years from 2000 to 2014, there was no significant increase in diabetes mortality.

Given these estimates, do you really think we should be spending less on pharmaceuticals?

Yes.

1. Lot's spending is on drugs for chronic diseases, eg diabetes, that would be better avoided.
2. Lot's of spending is on unecessary or even harmful drugs.

Also, is this all consistent with Tyler's idea that health spending/medical coverage doesn't do much for people?

Think how much better value they would be if they had been priced similarly to semiconductors and computer products!

They would never had been developed in the first place. Enjoy the counterfactual. You can’t pay for something that never existed.

"if you could extend someone’s life by a year for less than $3,000, that is highly cost effective"

I never imagined vaccines were that expensive ;)

In more serious terms, the incentives today yield drive pharmaceutical companies to invest more on corrective treatments (drugs) instead of preventive treatments (vaccines). https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3846654/

Vaccines are crazy expensive to develop; the low hanging fruit was easily picked decades ago.

The first step was purifying the pathogen, nuking it with formalin or other preparation and then letting the body develop a immune response to sterile epitopes. We flogged that horse for everything we could from the 19th century to the mid 20th.

Then we got a little more savvy and repeatedly passed pathogens through tissue culture until we developed an attenuated bug that was live, but lacked virulence factors that caused actual disease. We flogged that throughout the early 20th century.

The only way you get to use these sorts of development methods are going after diseases which have very low mortality rates. This gave us things like Rotavirus and Chicken pox. The vast majority of children survive and the morbidity burden is low. This is why the UK decided to let a couple of kids die every year and only fully adopt Rota in 2013. Chicken pox is similar where currently Europe is accepting a few dead kids every year and everyone losing a couple weeks of childhood to an unpleasant infection rather than paying to vaccinate.

So new vaccines these days tend to be much more time consuming. You have to go after pathogens that actually kill lots of people and the remaining ones are hard. We often have to isolate DNA and get things like capsule assemblies without genetic material. These work great, but the R&D is easily orders of magnitude more costly than the old options.

As pretty much always, the biggest obstacle is healthcare rationers in Europe are unwilling to budget long term. More rapid adoption of new vaccines would both decrease current mortality and induce more research in future vaccines. Unfortunately European cost curves would jump to closer mirror the US and that often break national budgets. This, of course, means that it becomes a political nightmare so they don't bother and just let a quiet few die Europe … and the occasional million dead in Africa when something like Rota gets delayed a few years.

'This gave us things like Rotavirus and Chicken pox'

Not a single mention of HPV. But then, that would probably be seen - at least in the U.S. - as promoting promiscuity, as compared to reducing cancer. And a vaccine based on research worthy of a Nobel prize - 'Harald zur Hausen went against current dogma and postulated that oncogenic human papilloma virus (HPV) caused cervical cancer, the second most common cancer among women. He realized that HPV-DNA could exist in a non-productive state in the tumours, and should be detectable by specific searches for viral DNA. He found HPV to be a heterogeneous family of viruses. Only some HPV types cause cancer. His discovery has led to characterization of the natural history of HPV infection, an understanding of mechanisms of HPV-induced carcinogenesis and the development of prophylactic vaccines against HPV acquisition.' And as further noted, HPV is something a bit more significant than chickenpox - 'The global public health burden attributable to human papilloma viruses is considerable. More than 5% of all cancers worldwide are caused by persistent infection with this virus.' https://www.nobelprize.org/prizes/medicine/2008/press-release/

'Chicken pox is similar where currently Europe is accepting a few dead kids every year and everyone losing a couple weeks of childhood to an unpleasant infection rather than paying to vaccinate.'

Certainly the choice I would make - though that 'couple of weeks of childhood' is a major exaggeration, based on the experience of all of the children I have known with chickenpox. Basically, different people have different opinions than you - just imagine, Germans are disgusted by chlorine chicken too.

'healthcare rationers in Europe are unwilling to budget long term'

The HPV vaccine shows how wrong that is, particularly as cervical cancer is a significant public health cost, which one assumes will sink dramatically over time as the HPV vaccine reduces cancer rates.

'More rapid adoption of new vaccines would both decrease current mortality and induce more research in future vaccines.'

Why yes, Gardasil does demonstrate that - just not in the U.S., where there was been a fair amount of pushback in making HPV vaccine routinely available. 'Although the medical and scientific establishment has embraced the vaccine, HPV vaccination rates are inadequate in the United States. Vaccine coverage is hindered by public perceptions regarding HPV’s status as a sexually transmitted infection and dissent over the recommended age of vaccination. Social conservatives have countered vaccine mandates with the argument that they infringe upon parental rights to discuss the topic of sex on their own terms. Pro-abstinence activists raise similar concerns that HPV vaccination may increase teenage promiscuity, though there is no evidence for this claim.' https://journalofethics.ama-assn.org/article/hpv-vaccine-controversy/2012-01

Indeed, the HPV vaccine is mentioned in the article I linked. What if cervical cancer rate goes down by 1, 5, or 20% some years down the road?

"Even with the successful launches of vaccines against pneumococcal and human papilloma virus diseases and pandemic influenza, vaccines’ share of the global medicines market remains marginal at approximately 3% (2010 figures)".

I'm always surprised how people ignore influenza as death cause because it has been on the top 10 in the US since cause of death records are kept. Vaccination is recommended to 65+ year old people.

Even tough, in the popular knowledge vaccines are for kids ;)

HPV was weird largely because we did not identify the pathogen until late, the key genes/epitopes do not have much immune access, and the virus had trouble replicating without the core virulence factor.

Most of the pathogens affecting humanity in measurable ways are already known. HPV and HIV are two of the VERY few pathogens we have discovered in the last 50 years.

But funny you should mention Gardasil. When Gardasil came out, the socialized rationers in British Columbia looked at the costs of treating HPV, the costs Merck was demanding for Gardasil, and elected to assign a *zero* dollar value to the whole "not having cancer" bit. Further, in their official cost benefit analysis they, literally, did not consider the long term savings of eradication.

From a public health point of view, those are your two primary benefits. They just happen to be longer term than avoiding treatment.

And in their infinite wisdom, the regulators in the socialized medicine countries elected not to vaccinate for up to half a decade after the medicine was approved by their own regulators. Horridly prudish Sweden, for instance, did not vaccinate until 2010 with Iceland and Finland both coming on board later. But all is good right? Only a few women will die due to this delay ... except that Europe is still, mainly, only vaccinating girls. I suppose anal cancer is rare enough, and who cares if gay guys die. But given that HPV has no animal reservoir it would be vastly more cost effective in the long run to vaccinate everyone and simply eradicate the disease. I mean if we are seriously considering health impacts, Europe should be subsidizing the vaccine in Africa. Arguably they pay prices that do that ... just only a small fraction of the US by the same accounting. But I suppose beer is more important African lives.

And of course there is the real long term. Gardasil was the highest impact vaccine to use the highly expensive Virus Like Particle approach to producing vaccines. It had clear benefit with virtually no side effects. And the socialized countries both dickered on price and still refuse to fully exploit the vaccine. Their actions directly reduced the amount of R&D devoted to this technology.

This not only made it less likely that Merck would develop another live saving vaccine, but also that everyone would else would have less development of the technology. By far, the most effective long term investment in vaccines is investing in the organizations that develop the technology itself. With Gardasil Europe had a chance to do that and took a pass. It was pure short term thinking.

In response to
So are space probes crazy expensive, yet the solar system is full of them and they are even now planning one to the nearest star.

Googling shows me fewer than 30 active probes since the dawn of the space age. The lists 26 current vaccines developed over the same time (note the WHO list did not include the many different vaccines targeting the same pathogens); the WHO lists 24 vaccines in current development (again not counting duplicates).

So yeah vaccines are crazy expensive to develop. Even if we include every hunk of metal the Soviets ever crashed into another celestial body, the orders of magnitude are about the same.

Shockingly, crazy expensive stuff tends to be of limited quantity.

Is this blog post part of Cowen's ongoing celebration of big business, in this case Big Pharma? Big Pharma, the subject of many conspiracy theories about big business, is saving/prolonging lives, so there. Speaking of nonagenarians, Henry Bloch died yesterday at age 96. Was it the income tax that caused him to have such a long and fruitful life? Since 1913, when the 16th amendment was adopted, the life expectancy of Americans has become progressively longer: a progressive income tax has produced progressively longer lives, Mr. Bloch being the ultimate beneficiary of the phenomenon. It made him rich too. Unlike life expectancy, Mr. Bloch's company recently has not experienced happy returns, as do-it-yourself tax preparation software has allowed millions of taxpayers to face April 15th alone. But all is not lost. Friends of tax preparation big business (a/k/a lobbyists) recently defeated an effort in Congress to permit simple and free online filing of tax returns directly with the IRS, something that the vast majority of taxpayers/filers could use. I don't know if the defeated legislation would have shortened life expectancy, but we can be thankful that the tax preparation big business made sure we didn't take that risk.

We can institute policies that change "we". Example: the US could have a law that limits drug prices to say 110% of the EU average. The result would be lower cost drugs here and higher prices in the EU because the companies would negotiate differently with EU countries in these circumstances.

Absolutely they would. Or we could just allow for reimportation. The trouble is that the new equilibrium will be closer to Europe than the US. standards. Millions of people will die, but they will be mostly Africans.

I don't think we know where the new equilibrium will be until we try. You might be right. And we could always update our policies later (ie, 110% could be 200% etc).

Every year billions of people drink water to prevent dying from thirsts.

Given these estimates, do you really think we should be spending less on water?

People dying from water-born illnesses should drink less tainted water. But they’re mostly non-white so I’m sure you don’t really care.

I've always wondered why everybody's perennially weeping and moaning about cholera in Haiti but none of the NGOs and tran-national and national agencies and army of well-intended aid workers can get around to building a sewer and potable water systems. Tyler posts on Haiti regularly, but apparently nobody who writes on Haiti has gotten around to this yet. Haiti is endlessly fascinating!

"Given these estimates, do you really think we should be spending less on pharmaceuticals?"

As others have noted, this is an interesting sentence. Does the author mean "we" in the sense of multinational companies in which we may not in fact hold equity?

Or does he mean "we" Americans, who would see benefit form either public or private investment?

Note that public investment might be better matched to "cheap and done" treatment, whereas stockholders might prefer "expensive and ongoing."

Incentives matter.

Can 'we' start differentiating between self-inflicted/lifestyle diseases and natural/unavoidable diseases?

'We' should spend more on diseases that we cannot reasonably control (genetic, Type I diabetes, rare viruses, and yes even cancer) and for which the affected person is, in a universal sense, random. 'We' should not be spending $3,000 per year to extend someone's life who eats like garbage, sits in front of the TV all day, and crams Lipitor and insulin down their throat to keep their heart working.

I would like to see someone brave enough to separate out these two scenarios and focus more funding on the former, not the latter.

Preventable diseases are more profitable for pharma than nonpreventable. Unless you change this, I'm putting my money into the makers of Lipitor and junk food manufacturers.

How does he cope with the precipitate decline in the deaths of middle-aged men from heart attacks? This has nothing to do with statins, nothing to do with changing diet, nor anything to do with giving up smoking. It just happened. Doctors, or drug-makers, will take credit, but their claims will be false.

Interesting, the commentor "Sure" seems to actually know a lot about this field, while "clockwork -prior" seems to want to endlessly dispute things he seems to know less about.
I hope to see more people getting rich in the future by inventing breakthrough drugs.
Is this a common phenomenon?

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