Results for “fda” 461 found
What determines foreign aid after a disaster?
When it comes to Uncle Sam doling out disaster
relief dollars to foreign countries, it apparently helps to be a friend
of the United States and to catch the eye of the New York Times. That’s because each news story in the Times about a
natural disaster abroad produces more than a half-million dollars more
in U.S. disaster relief than what the stricken country otherwise would
have received, based on the magnitude of the calamity and other
factors, claim three political scientists who have studied the politics
of disaster relief.A. Cooper Drury of the University of Missouri, Richard Stuart Olson of
Florida International University and Douglas A. Van Belle of New
Zealand’s Victoria University of Wellington compiled data on 2,337
natural catastrophes occurring between 1964 and the end of 1995,
including how often stories about a disaster appeared in the Times.
The Times, in this context, serves as a proxy for general media attention. Furthermore:
…disaster assistance is awash in politics at every step of the process.
For example, basic foreign policy concerns have a huge impact on the
initial decision of whether to give aid. Allies of the United States
are about seven times more likely than non-allies or neutral countries
to win OFDA approval. And while the Cold War may have brought the world
to the brink of nuclear extinction, those were the salad days of
disaster relief: Awards were significantly larger during the Cold War
years than they are now…
Here is the story; scroll down further for an interesting but flawed discussion of social security and demography (what about birth control pills?). So far I cannot find the paper itself on line.
Vioxx and Tort
We have two systems of drug regulation in the United States, the FDA and tort law. Unfortunately, neither system works well. FDA incentives push for excess delay and excess cost and the tort system appears random if not perverse in its operation with good claims receiving nothing and bad claims receiving billions.
Writing in the New Yorker, James Surowiecki discusses some relevant research from Kip Viscusi:
Merck would seem to have one big thing in its favor: the company
voluntarily withdrew Vioxx from the market. But while Merck executives
may have hoped to persuade people that they were acting responsibly,
plaintiffs’ attorneys have taken the withdrawal as an admission of
guilt…internal
company documents show that Merck employees were debating the safety of
the drug for years before the recall.From a scientific perspective, this is hardly damning. The internal
debates about the drug’s safety were just that–debates, with different
scientists arguing for and against the drug….While that kind of weighing of risk and benefit may be medically
rational, in the legal arena it’s poison. Nothing infuriates juries
like finding out that companies knew about dangers and then “balanced”
them away. In fact, any kind of risk-benefit analysis, honest or not,
is likely to get you in trouble with juries….Viscusi has shown that
people are inclined to award heftier punitive damages against a company
that had performed a risk analysis before selling a product than a
company that didn’t bother to. Even if the company puts a very high
value on each life, the fact that it has weighed costs against benefits
is, in itself, reprehensible. “We’re just numbers, I feel, to them” is
how a juror in the G.M. case put it. “Statistics. That’s something that
is wrong.”…Before a jury, then, a firm is better off being
ignorant than informed.
Are we spending our health care dollars effectively?
(I am quoting from Randall’s email here, Typepad won’t let me indent beneath the fold…)
"A) For anyone who is dying the lack of FDA approval should not prevent the use of a treatment.
While I would favor complete revocation of FDA ability to keep drugs off the market that is not going to fly politically. But selling a more limited change where those with, say, a projected 12 month or 24 month life expectancy get a basic "I’m free of the FDA tyranny" card would accelerate drug development. Phase I and Phase II drugs would be more widely available….
D) The coercive power of the state should force a percentage of all income to go into medical spending accounts.
The goal here is two fold:
– Decrease the number of people who need state medical funding.
– Also, increase the amount of medical treatment purchases that are paid directly by patients. That will increase market forces in medicine.
E) Self-employed people should be able to buy medical insurance pre-tax.
F) People should be able to make tax deductable donations into medical spending accounts for their future children before the children are conceived. Then the money should be usable to buy medical catastrophe insurance against the possibility of birth defects and also for more mundane medical care.
G) People should be able to bring their own medical insurance policies with them to a job and have their employers pay on those policies rather than on the employer’s group policy.
That way a person could move around between jobs and never reach a state where their COBRA runs out and a pre-existing condition makes them uninsurable (assuming they can even afford to make COBRA payments while unemployed). The way things stand now the tax law forces people to go uninsured between jobs. When you have no income coming in you suddenly have to try to get coverage. That problem must be fixed.
H) Medical records should be made electronic and more widely shareable by researchers that most medical patients effectively become enrolled in "virtual" medical trials."
Soft landing or economic Armageddon?
Stephen Roach comes around to a more optimistic point of view:
The constructive developments should not be minimized. The recent plunge in oil prices is nothing short of stunning — 13% alone, for WTI quotes in the first three trading days of December. I have no idea if this move is sustainable, but it has opened up a $7.50 gap from the $50 threshold that I have long felt would pose great risks to the global economy. Moreover, the dollar’s weakness — despite the angst of the headline writers — fits the rebalancing script to a tee. While euro and yen cross-rates are raising discomfort levels in Frankfurt and Tokyo, the dollar’s descent still looks like a well-managed soft landing to me. In real terms, the Federal Reserve’s broad trade-weighted dollar index is down 15% from Febryary 2002 through November 2004 — a pace that equates to a decline of about 5% per year. That’s a measured and encouraging adjustment path — provided, of course, the burden of currency realignment now spreads from Europe to Asia, including China.
Furthermore the Chinese economy appears to be slowing in the appropriate, non-implosive fashion. Roach’s bottom line?
Even I have to concede that a number of positives have fallen into place recently. I am on record of assigning a 40% probability to a global recession scenario in 2005…However, given recent favorable shifts in oil, the dollar, and China, I now believe that it is appropriate to reduce this risk to 25%.
Note, however, that in his view (and mine) the U.S. still remains on a dangerous consumption binge when for demographic reasons more saving would be in order. In my view the big problem lies in the long run, not the short run. Now asset markets have a remarkable ability to compress long run problems into the here and now. But how will this play out? Most likely U.S. taxes in twenty or thirty years time will be much higher than today. Yes this will depress current asset prices but it should not, on its own, imply a current implosion or crash. Here is my previous post on economic Armageddon.
In praise of me-too drugs
Today’s Op-Ed in The Financial Times defends me-too drugs:
There is a tendency among the medical fraternity to tut-tut about the proliferation of drugs as unproductive and unnecessary. Marcia Angell, a former editor of the New England Journal of Medicine, argues in her book The Truth About Drug Companies that me-too drugs are symptomatic of Big Pharma’s intellectual bankruptcy.
Dr Angell says there is "almost no evidence of price competition in the me-too business" and trials "almost never compare me-too drugs with one another for the same condition at similar doses". One or two drugs would do: "I know of no rationale for, say, the seven brand-name Ace inhibitors that are sold to treat high blood pressure and heart failure."
There is something to her critique. One of the attractions of me-too drugs has been that pharmaceuticals companies have been able to market them heavily in the US – spending $3.3bn (£1.7bn) on direct-to-consumer advertising in 2003, and giving $16bn of free samples to doctors. This makes them look more like branded consumer goods companies than research-based scientific organisations.
But there are already signs of drug proliferation leading to falling prices. In Europe, the existence of alternative treatments has helped governments to cap prices. Pfizer is fighting a German proposal to pay the same for all cholesterol drugs, cutting the sum it gets for Lipitor by a third. Even in the US, drug companies increasingly have to compete to get their drugs on to approved prescription lists.
That means direct comparisons on both price and effectiveness. Despite the industry’s traditional resistance to "head-to-head" trials, they are becoming more commonplace. Bristol-Myers Squibb financed a head-to-head study of Pravachol and Lipitor in an effort to displace the market leader, only to find this year that Lipitor worked better.
…This may all sound terribly wasteful to a doctor, but it is the same thing that is good for consumers in other markets: open competition. The problem until now has not been too much of it, but too little. The last thing that a patient should want is a choice of only one drug. As the Vioxx withdrawal shows, me-too pills may inspire little affection, but they would be missed if they were not there.
Why have me-too drugs been so prevalent? Are they an inefficient form of product mimicry? An artifact of bad patent or FDA policies? The long-run path to affordable medical care? I don’t have the expertise to answer these questions, so in my spare time I bug Alex to write more about them.
Markets in everything
This one gives every indication of being real, although at first I was convinced it was a fraud or a joke.
Thanks to Radley Balko for the pointer.
Addendum: The FDA won’t allow it for people.
Gladwell on Prescription Drugs
In the latest New Yorker, Malcolm Gladwell has an excellent article on prescription drugs. In a heartless and cruel post earlier this year I wrote:
People talk about the high price of pharmaceuticals as if high prices lasted forever. In fact, within a year of the expiration of a pharmaceutical’s patents, prices will typically fall by more than 50 percent as generic producers enter the market. Patents nominally last for 20 years but the effective patent life is much lower because patents are typically granted years before a product has cleared FDA review. The effective patent life of the average new pharmaceutical in the 1990s averaged just 12 years (see here for some references)….people who are demanding price controls are not simply asking for lower drug prices they are asking for lower prices on the newest drugs. Lower prices for drugs introduced 15 years ago are already here.
Gladwell gives a nice example:
If you are taking Mevacor for your cholesterol, the 20-mg. pill is two-twenty-five in America and less than two dollars if you buy it in Canada. But generic Mevacor (lovastatin) is about a dollar a pill in Canada and as low as sixty-five cents a pill in the United States…so many other drugs are going to go off-patent in the next few years–including the top-selling drug in this country, the anti-cholesterol medication Lipitor–that many Americans who now pay more for their drugs than their counterparts in other Western countries could soon be paying less.
Generics are often good substitutes for brand-name drugs but because neither the patient nor the doctor typically pay the costs we don’t choose the cheaper generics as much as we should (see here for more analysis).
Tyler asked why other institutions don’t arise to substitute for the cost-control of first party payment. Gladwell notes that such institutions are starting to evolve.
Pharmacy Benefit Managers, or P.B.M.s…build incentives into prescription-drug plans to encourage intelligent patient behavior. If someone wants to take a brand-name oral contraceptive and there is a generic equivalent available, for example, a P.B.M. might require her to pay the price difference. In the case of something like heartburn, the P.B.M. might require patients to follow what’s called step therapy–to try the cheaper H2 antagonists first, and only if that fails to move to a proton-pump inhibitor like omeprazole.
A good idea, especially if PBMs focus on pay for choice rather than restricting choice. I also worry that liability problems will plague PBMs just like they have HMOs and don’t forget that the lack of incentive to choose drugs with an eye to cost will get much worse when the new Medicare drug entitlement program kicks in.
A social experiment
Even outer-space aliens can see the effects of communism.
Also check out North Korea’s creepy Ryugyong Hotel, built at a cost of some 2% of GDP the hotel towers over Pyongyang but it’s a shell that has never been completed because of stuctural problems due to poor quality. The North Koreans have gone so far as to remove it from some maps but there is no hiding the 7th tallest building in the world!
Thanks to Mahalanabois for the picture and Ted Frank for the hotel recommendation.
I do not approve
The headline in the Washington Post yesterday read “FDA Approves Artificial Heart for Those Awaiting Transplant.” The language annoys me – it sounds as if the FDA gave a Good Housekeeping Seal of Approval to the artificial heart. Consider how much clearer the tradeoffs of medical policy would be if instead the headline read, “FDA lifts ban on artificial hearts for those awaiting transplant.”
Thanks to Dan Klein, my co-author on FDAReview.org, who first alerted me to these issues.
Addendum: Unfortunately, as I wrote earlier, the artificial heart will not save lives and follow up here.
Vaccines: The Short Run
President Bush was correct when he said that liability risk is one factor in the recurrent shortage of vaccines. Based on a post by Mark Kleiman, suggesting that flu vaccines are immune from liability due to the Vaccine Injury Compensation Program, Brad De Long called Bush’s claim an “eternal lie.” To his credit, Kleiman (but not DeLong) quickly retracted his post when others pointed out that the VICP applies only to pediatric vaccines.
Liability is not the only issue, however. Costly FDA regulations and requirements, for example to remove thimerosal from vaccines despite no evidence of safety problems, have pushed firms out of the industry. See this paper in the The Independent Review (I am an assistant editor) for more on these regulations and their consequences.
A further problem is that the federal government is the major purchaser of vaccines, although not the flu vaccine, and it uses its monopsony powers and the law to require companies to sell at low prices. Firms have left the industry because they are squeezed on one end by regulation and on the other by low prices and, for vaccines like the flu vaccine not covered by VICP, potential liability. Note that even if the prices are high enough to earn the company a modest profit the point is that they are not high enough to make it worthwhile to make a surplus of vaccine that can be sold in the event of a contamination problem, as has happened this year. If the firms can’t price high during a shortage then there is no incentive to plan for a shortage.
Even without legal price caps there are significant disincentives to high prices. Here is a CDC spokesperson (link to audio file) on recent price increases:
Shame on the people who are price gouging. This is a reprehensible thing to be doing. I think an immoral thing.
Is it any wonder that firms don’t want in on this market?
Henry Miller, a former head of the FDA’s biotechnology division, summarizes well:
The fundamental problem is that government regulatory policies and what amounts to price controls discourage companies from investing aggressively to develop new vaccines. Producers have abandoned the field in droves….Although their social value is high, their economic value to pharmaceutical companies is low because of vaccines’ low return on investment and the exposure to legal liability they bring manufacturers….
Moreover, the FDA has a history of removing safe and effective vaccines from the market based merely on perceptions of excessive side effects — a prospect that terrifies manufacturers.
We need a fundamental change in mind-set: The rewards for creating, testing and producing vaccines must become commensurate with their benefits to society, as is the case for therapeutic pharmaceuticals.
Read Henry’s article for more on dealing with the problem today, (he notes, for example, that it may be possible to dilute current stocks and still maintain good effectiveness). Also, as Tyler reported last year, simply targeting vaccines to at-risk people is not necessarily the best approach. A better approach is to target super-spreaders, people who may not be at great risk themselves but who can and will spread it to many others.
Tomorrow: Vaccines: The Long Run.
Double Jeopardy Disaster
Getting a new drug or medical device approved by the FDA is a long and expensive process. The FDA is risk-averse and pays much more attention to the risks of approving a bad drug than to the risks of failing to approve a good drug. As a result, every economist who has ever written a serious analysis of the FDA has come to the conclusion that less regulation would mean more new drugs and more saved lives. (See FDAReview.org for more information. Gary Becker offers a recent statement.).
Approval, however, does not end a firm’s problems because even then it faces the risk of a debilitating lawsuit. Consider how bizarre this is: A team of statisticians, physicians and medical researchers pores over years of clinical data to pronounce a product safe (always noting that this means safe relative to the product’s expected benefits) and then a jury of 12 randomly selected Joes and Janes second guesses them, awards plaintiffs billions of dollars and drives the firm into bankruptcy. This has happened more than once.
FDA approval ought to be a “safe harbor.” Many states already have laws along these lines but they have been weakly enforced. The Bush administration’s efforts to limit lawsuits against firms that have passed FDA approval is a therefore a necessary and welcome piece of common sense. This doesn’t mean that you can’t sue a drug manufacturer. If the manufacturer lies to the FDA or to your physician or if they don’t produce the drug according to specification then by all means sue away. Every drug, however, has side-effects and every drug works differently in different people. That means that there has to be some sort of cost-benefit test to decide if a drug should be marketed. There is an argument for using tort law instead of the FDA to do this test – an argument that gets weaker the more out out-of-control the courts become – and there is an argument for using the FDA instead of tort law but there is no argument for adding tort law on top of FDA regulation, that is a double jeopardy disaster.
Shorter patent lives mean shorter lives
People talk about the high price of pharmaceuticals as if high prices lasted forever. In fact, within a year of the expiration of a pharmaceutical’s patents, prices will typically fall by more than 50 percent as generic producers enter the market. Patents nominally last for 20 years but the effective patent life is much lower because patents are typically granted years before a product has cleared FDA review. The effective patent life of the average new pharmaceutical in the 1990s averaged just 12 years (see here for some references). Competition from competing but non-infringing pharmaceuticals makes the de facto patent life even shorter.
Thus, my response to the seniors and others clamoring for lower pharmaceutical prices is to be more patient. Does this sound harsh? Consider this, the people who are demanding price controls are not simply asking for lower drug prices they are asking for lower prices on the newest drugs. Lower prices for drugs introduced 15 years ago are already here. Remember, those drugs were recently considered the very best modern medicine has to offer, so it’s not like I am expecting those who can’t afford the newer medicines to go back to using leeches.
Price controls or other such plans such as reimportation may bring cheaper pharmaceuticals for a short period but we will then have a much smaller supply of new drugs forever. Only the shortsighted would buy that prescription.
Tailor made pharmaceuticals
Better genetic information is beginning to reveal why some drugs work for some people but not for others. (Here’s a CBS Marketwatch story, requires free subscription). In addition to the heath benefits, there are some political-economic benefits to better understanding of how drugs interact with personal chemistry.
Drugs that benefit a minority of the population are sometimes not approved by the FDA because their side-effects for the majority are deemed to outweigh the expected benefits. But if we can identify more clearly who the drugs will benefit and who they will harm, more drugs will be deemed safe and will get through the FDA process. As a further result, the costs of drug development will be reduced.
Genetic information can also help to avoid the opposite error. It often happens that in a clinical trial a drug doesn’t look beneficial overall but does appear to work in some subpopulation (e.g. African-Americans with disease of type X that has progressed to stage y). The danger is that some results like this are bound to occur by chance alone and thus do not necessarily imply true efficacy. If we can show that the subpopulations do (or do not) have systematic genetic differences from the majority population, however, we can rule out (or rule in) chance as an explanation and better separate the wheat from the chaff.
Thanks to Jim Coomes (a long-time reader from Pattaya, Thailand!) for the link.
It’s a mad, mad, mad, mad cow world
The market is often accused of under-providing safety. Consider, however, that the Department of Agriculture is refusing to let a Kansas beef producer test its cattle for mad cow disease. Yes, you read that right. The producer, Creekstone Farms, is losing $40,000 a day because it exports its beef to Japan where such tests are required. The testing of individual cattle, however, runs contrary to the DOA/industry message that American beef is perfectly safe without expensive testing.
The mad cow case is a clear example of regulatory capture. By the way, the DOA aquired its power to decide minimum and maximum testing standards test under the Virus Serum Toxin Act of 1913 – it was captured a long time ago.
Don’t be surprised if the DOA requires such testing in the near future. I am reminded of the similar folic acid story that I wrote about with Dan Klein at FDAReview.org:
In 1992, the federal Centers for Disease Control and Prevention (CDC) recommended that women of childbearing age take folic acid supplements. Studies showed that taking folic acid reduced risks of babies suffering neural-tube birth defects such as anencephaly and spina bifida. The FDA immediately announced, however, that it would prosecute any food or vitamin manufacturer that placed the CDC recommendation in its advertising or product labeling (Calfee 1997). The public did not learn of the importance of folic acid until Congress passed the Dietary Supplement Health and Education Act of 1994, which loosened the FDA’s vise on the advertising of vitamins and other dietary supplements. Within only a few years of its ban on publicizing the CDC recommendation, the FDA made a complete turnabout. Since 1998, the agency has required manufacturers to fortify a variety of grain products with folic acid–that which is not prohibited is mandatory.
Off-label drugs
Alex has written much about the importance of off-label uses for drugs, which are not generally restricted by the FDA. I came across the following in the 17 March 2004 Wall Street Journal, Marketplace section:
A high-price biotech drug, developed in the 1980s to treat a rare form of hemophilia, is fast becoming a blockbuster, with physicians around the world using it to stanch severe bleeding from car accidents, gunshot wounds and postsurgery hemorrhaging.
But here’s the rub: The drug, a human bloodclotting protein called NovoSeven that costs $5,000 a dose, hasn’t been approved by the Food and Drug Administration for such uses…Some doctors are hailing NovoSeven as a lifesaver, with word spreading about near-miraculous cures of dying patients. It’s the new wonder drug,” says Thomas Scalea, director of the shock trauma center at the University of Maryland Medical Center. He says the center has used the drug 80 times in three years, saving about 35 lives.
Not all doctors agree about the merits of the drug, and insurance companies will not reimburse drug usage for this purpose.
Question: Should the FDA have regulatory power over the off-label use of this drug to stop traumatic bleeding? If it had had such power, would any of these lives have been saved at all? In his paper, Alex asks the requisite follow-up question. If it is bad idea to give the FDA regulatory power over off-label uses why give it so much power over initial uses?
As things stand now, the FDA will not allow “human trials” of the drug in the laboratory, although real life trials occur in hospitals on a regular basis. Furthermore the company’s sales force cannot promote the drug for non-hemophilia uses and must wait for doctors to ask, noting that it employs 25 full-time people simply to handle the flood of inquiries.
Further comment by Alex is welcome. This is his bailiwick not mine, I just thought the example was especially striking. Here is some basic information about the drug, here is the company’s web site.