In Italy last week, where I holidayed, I also attended the ISIL conference with a great bunch of fellow libertarian conspirators, such as Kevin Dowd, Tom Palmer and Detlev Schlichter. One of the talks was by Mary Ruwart, who has worked for many years in the medical field and has first-hand knowledge of the destructive power of the US Food and Drugs Administration. She argued that the cost to life in terms of drugs and treatments that never got approved runs to several million people, far outweighing the likely number of deaths from drugs that might have dangerous side-effects.
As Ruwart said, one of the issues that comes up in any discussion about drugs are patents. She disapproves of them – she called the process of getting a patent a “game”; but at the same time she pointed out that if drug firms have no certainty of being able to recoup some of their research costs due to a patent, and those research costs are inflated by the FDA and other regulators, then abolishing patents without first removing such regulators would be bad. In my view, it would be disastrous.
I thought about her talk when I came across this rather lame article by the Economist, in which the publication wonders why US drugs are so expensive and why production of them has slowed. Wow, I wonder why that can be?
Update: the FDA has been carrying out an absurd attempt to hammer dietary supplements. US citizens who want to stop this nonsense can register their views at this site.
Perhaps because non American socialist nations put price controls on drugs and requires drug companies to sell at these prices as a condition of doing business in that nation at all. The lost income has to be made up somewhere if the company is to make a profit on their investment.
Asking why a drug is so expensive is like asking why a divorce is so expensive.
(altogether now)
Because it’s worth it.
But, joking aside, there’s no question that the regulatory costs drive up both the retail cost and the human cost, and I’m also of a mind that the complexity of the regulatory process actually encourages (or at least tolerates) the development and marketing of drugs and therapies which have little or no differential benefit – because the major emphasis is on assessing the risks of negative outcomes, the question of whether it actually works or does any good is often lost, as is a realistic assessment of possible unintended consequences apart from the purely therapeutic. Things like mammograms and PSA testing spring to mind as examples of things which have significant negative outcomes that were never assessed from a systemic viewpoint. I’d be a lot more sympathetic to the activities of something like an FDA if it took a more holistic approach (horrible word, but this one time in 1000 it is the right word) to drugs and therapies.
llater,
llamas
Interesting that this twelve year old paper talks about how vitamin and supplement manufacturers were prevented, in the US, from claiming health benefits for their products despite many papers showing how efficacious they were, and how that might have affected patients. Especially as the whole ‘free radical/anti-oxidant’ theory is under increasing criticism.
Indeed, I was discussing with my GP the difference in Vitamin D RDA between the US and the UK, (about a factor of ten), and he was telling me cautionary tales about the Vitamin C kidney stones he was finding in people who’d over enthusiastically dosed themselves with anti-oxidants in the hope of preventing cancer.
That’s not to defend the FDA, (or our own NICE ‘let the NHS pay for complementary medicine which doesn’t work but not pay for expensive foreign drugs which might work’ attitude), but it does rather point up the difficulties of the state attempting to police consumer choices.
Ultimately, it is down to the consumers having to choose and needing to educate themselves in the choices available as well as the pros and cons of each choice on offer, and subsequently to take responsibility for the consequences of their choice.
As usual, caveat emptor, but when someone else, (the state or your insurance company), purports to be the emptor, then their caveats will apply.
In this connection I recommend ‘Everything I Want To Do Is Illegal’, an engaging little book about a Virginia farmer’s struggles with the US Dept Of Agriculture and assorted institutional stupidity.
Well, speaking on behalf of inventors everywhere (Yes, I’ve nearly finished my Self-hooking button, honest!) I approve of patents.
On the Mises economics blog, i once asked those anti-patent people if they could point to one drug as good as Viagra that had arisen in the non-patent world. Could they guarantee that people would develop and market such drugs without the ability to recoup their costs through patents? They seemed to have blind faith that they could, but they couldn’t point to any actual examples, or even near-misses.
As to my own justification, I am a minarchist, who believes in the sanctity of ownership. I own my private property, and the local county should be the owner of the county property, like the roads. Just as I could issue licenses for people to use my land, so the counties should have the right to issue licenses, or restrict trade, for market purposes. Patents would be like an advertising license, and the county would only buy patented products, etc.
The best example of the folly of the Precautionary Principle is that aspirin would not be approved today. People die due to side effects or overdosage. Drug companies can make painkillers that are far, far safer than aspirin and which would save lives but they aren’t safer than the current guidelines. So people die in the name of safety. It’s enough to give you a headache.
If you want to know why drug development is getting more expensive and less successful, I suggest In the Pipeline, the blog of pharmaceutical chemist Derek Lowe.
Lowe often comments on the immense difficulty of:
* discovering what actually causes various ailments
* finding underlying processes that can be affected by drugs
* finding a compound which affects such a process in useful way
* can actually get into the place where the target process happens
* actually does affect the target process in vivo, not just in vitro
* but doesn’t also affect other processes in bad ways
The last step is a real project-killer, because (as we’re learning more and more) genes and enzymes and proteins operate in an incredible tangle of cross-functional interactions. Everything seems to do several different things in several different processes.
He’s cited studies of drug development around the world, which show that success, at every stage, is becoming less probable. These studies extrapolate to 100% failure in the not-very-far future.
One needs to explain why drugs are more expensive in the US than equally bureaucratic Europe.
One plausible suspect is US tort laws, with their potential for catastrophic damages and low barriers to speculative cases. Precaution against lawsuits affects everyone in the supply chain: researchers and manufacturers, providers of medical insurance, and prescribing medics. But the buck stops with the drug companies.
The effects of FDA regulations (especially after the changes made in 1962) were exposed by Milton Friedman.
They are even included in his best selling book “Free To Choose” (back in 1980).
Yet people go about asking why meds are so expensive and why new cures are not being developed as they used to be…..