Results for “pharmaceutical recipr” 18 found
Making American Great Again–The FDA
Does Donald Trump want to streamline the FDA and speed new drugs to patients? The Washington Post thinks that it can read the tea leaves:
A single sentence in President-elect Donald Trump’s health-care platform sends a strong hint to the drug and medical device industry that they may have an easier time getting their products on the market under his administration.
“Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products,” his health plan states.
On the face of it, the bullet point may seem almost bland, but efforts to integrate patients’ preferences and encourage innovation often result in proposals aimed at speeding up the process for getting new medicines on the market by easing regulations. Critics argue that such efforts can erode standards that are in place to protect patients from drugs that don’t work and might even be harmful.
“The language … is industry code for deregulation and reducing of safety standards,” said Robert Weissman, president of Public Citizen, a consumer watchdog.
There is plenty of evidence that the FDA is too slow (see, for example, here, here, here and here) so I would support such a move. Senators Cruz and Lee proposed a reciprocity bill last term under which drugs approved in other developed countries would quickly be approved here; perhaps such a bill could find renewed interest in a Trump administration (Economists also support the idea of reciprocity.)
On the other hand, Trump has expressed support for Medicare being allowed to negotiate drug prices which is tantamount to price controls given the size of Medicare and that is potentially a disaster. Price controls could significantly reduce research and development in the pharmaceutical industry and end up greatly adding to the invisible graveyard. Trump’s advisers would seem to lean towards streamlining the FDA process rather than imposing price controls but it’s difficult to be certain.
The Top Ten MR Posts of 2015
Here are the top ten MR posts from 2015, mostly as measured by page views. The number one viewed post was:
- Apple Should Buy a University. People really like to talk about Apple and this post was picked up all over the web, most notably at Reddit where it received over 2500 comments.
Next most highly viewed were my post(s) on the California water shortage.
2. The Economics of California’s Water Shortage followed closely 4) by The Misallocation of Water.
3. Our guest blogger Ramez Naam earned the number 3 spot with his excellent post on Crispr, Genetically Engineering Humans Isn’t So Scary.
5. My post explaining why Martin Shkreli was able to jack up the price of Daraprim and how this argued in favor of drug reciprocity was timely and got attention: Daraprim Generic Drug Regulation and Pharmaceutical Price-Jacking
6. What was Gary Becker’s Biggest Mistake? generated lots of views and discussion.
7. Tyler’s post Bully for Ben Carson provided plenty of fodder for argument.
8. The Effect of Police Body Cameras–they work and should be mandatory.
9. Do workers benefit when laws require that employers provide them with benefits? I discussed the economics in The Happy Meal Fallacy.
10. Finally, Tyler discussed What Economic Theories are Especially Misunderstood.
Posts on immigration tend to get the most comments. The Case for Getting Rid of Borders generated over 700 comments here and over 1700 comments and 57 thousand likes at The Atlantic where the longer article appeared.
Other highly viewed posts included two questions, Is it Worse if foreigners kill us? from Tyler and Should we Care if the Human Race Goes Extinct? from myself.
The Ferguson Kleptocracy and Tyler’s posts, Greece and Syriza lost the public relations battle and a Simple Primer for Understanding China’s downturn (see also Tyler’s excellent video on this topic) were also highly viewed.
I would also point to Tyler’s best of lists as worthy of review including Best Fiction of 2015, Best Non-Fiction of 2015 and Best Movies of 2015. You can also see Tyler’s book recommendations from previous years here.
The FDA and Magical Thinking
Vox had a piece yesterday on the Cruz-Lee proposal to make it easier for U.S. patients to access drugs and devices already approved in other developed countries. The Vox piece had some howlers. Most notably this:
“There’s no evidence the FDA blocks innovation or makes innovation harder or makes it more costly,” said Kesselheim.
Frankly, that would be laughable were it not coming from a professor of medicine at Harvard Medical School. It costs well over a billion dollars to get the average new drug approved and much of that cost comes from FDA required clinical trials. Longer and larger clinical trials mean that the drugs that are eventually approved are safer. But longer trials also mean that good drugs are delayed. And the more expensive it is to produce new drugs the fewer new drugs will be produced. In short, longer and larger trials mean drug delay and drug loss.
We live in a world of tradeoffs. Let’s debate the tradeoffs. But let’s not engage in magical thinking where there are no tradeoffs and “no evidence” that the FDA makes drug development more costly.
A more subtle error was committed by the author who writes:
But it’s not clear that this legislation can solve the biggest problem here — the lack of promising treatments in the pipeline. In other words, a faster approval process can’t fix a dearth of innovation from labs themselves.
Many factors go into drug development that are outside the FDA’s purview. Nevertheless, faster drug approval can and does increase innovation. Approving drugs more quickly is equivalent to a decrease in the costs of research and development. Time is money. Reducing the cost of development increases the incentive to develop new drugs.
The Prescription Drug User Fee Act, for example, reduced drug approval times by about 10 months. Philipson et al. calculate that:
…the more rapid access of drugs on the market enabled by PDUFA saved the equivalent of 140,000 to 310,000 life years.
(PDUFA does not appear to have materially affected safety but Philipson et al. calculate that even under a worst case scenario the benefits of PDUFDA far exceeded the costs).
Moreover, Vernon et al. find that the reduction in approval time from PDUFA increased new drug development:
Controlling for other factors such as pharmaceutical profitability and cash flows, we estimate that a 10% decrease (increase) in FDA approval times leads to an increase (decrease) in R&D spending from between 1.4% and 2.0%. Combining this estimate with recent research on the link between PDUFA and FDA approval times…we calculate PDUFA may have incentivized an additional $10.8 billion to $15.4 billion in pharmaceutical R&D. Recent economic research has shown that the social rate of return on pharmaceutical R&D is very high; therefore, the social benefits of PDUFA (over and above the benefits of more rapid consumer access) are likely to be substantial.
Finally, return to the issue of reciprocity. Many of the critics of reciprocity respond with simple appeals to nationalism. We are the best! Rah, rah, rah! But if the critics were German or French they would argue that the EMA is superior to the FDA. Indeed, when I raise the issue of reciprocity with Europeans they respond in exactly the same way as Americans. How could anyone suggest that the EMA automatically approve drugs approved by the FDA! The horror.
The argument for reciprocity, however, isn’t that the FDA is uniquely bad or always worse than the EMA or vice-versa. The argument is that it’s wasteful to duplicate the lengthy approval process and that both agencies sometimes make mistakes. As a result, it’s simple common sense to let Americans avail themselves of drugs and devices approved in other developed countries.