Scott Alexander on Drug Prices

Here is a fasten to an informative article by Scott Alexander in c~tinuance drug prices.  SA covers a haphazard of ground and you will catch out why the discussion by politicians, the media, and, possibly, you and your friends is largely misguided.

SA considers outcomes without more through 2060, ignoring that a sink growth rate of effectiveness for drugs leads to a estranged higher long term savings and life expectation shortfall than he notes.  I apprehend this makes his conclusions conservative, in the sensation that the life expectancy shortfall besides than offsets the cost savings – ~ the agency of a lot.

Here are a not many excerpts.
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Generic drugs are overpriced for the cause that we’re morons who can’t come up with a decent regulatory regime. Brand-remembrance drugs are overpriced because of a deliberate judgment to overprice them to encourage investigation.

The economic argument goes: the else profitable new drugs are, the in addition incentive a company has to cause them. If we didn’t recompense pharmaceutical companies for inventing new drugs, afterward they wouldn’t go through the $2.5 billion, ten-year hassle of seeking FDA approval through no guarantee of success. The way we reward them is by giving them a twenty-year exclusive possession when they can charge lots of wealth without anybody telling them not to.

But I suspect now I have to. So. Lit re-examination time. I searched the economics the muses for studies, models, and arguments used to calculate whether price regulation would decrease deaden with narcotics development, and if so, how the benefits and risks balanced through. Here’s what I’ve got:

So ~ means of my count, there are eight-and-a-half studies concluding that price regulation would give pain to new drug innovation, and one-moiety of a study concluding that it wouldn’t. I’ve tried to get clear of all the studies sponsored by the pharmaceutical industry from this list, but I puissance have missed some, and I am eternally skeptical of anything that says anything the pharmaceutical toil approves of even I can’t token the money directly.

One source I effect trust is RAND, a think tank which is generally well-respected and considerably objective (despite the name, they are not associated by Ayn Rand or Rand Paul). InRegulating Drug Prices: US Policy Alternatives In A Global Context, they set down in black and white:

In other words, such prices would exist good in the short term taken in the character of we get all the currently-existing drugs in the place of very cheap:

But bad in the a ~ time-term as pharmaceutical innovation declines and we be the subject of fewer interventions available to protect our soundness:

Given the value they place without ceasing human life, they argue that this wealth-for-life-years trade is pure negative:

All of this sounds manner of boring and economics-y when you read it like this, and perhaps your eyes are glazing over. So hindrance me put this in context. In 2060 there will probably be 420 million Americans and 523 the masses Europeans. And suppose that whatever changes we secure in drug regulations today last according to one human lifespan, so that everybody has a peril to be 55-60. So around a billion people each losing with respect to 0.7 years of their life equals 700 very great number life-years. Since some people live in countries outward the US and Europe [citation needed] and they in like manner benefit from First-World-invented medications, let’s make cylindrical this up to about a billion life-years missed.

What was the worst thing that for aye happened? One strong contender is Mao’s Great Leap Forward, in that ineffective agricultural reforms and very active purges killed 45 million people. Most of these populace were probably already adults, and lifespan in Mao’s China wasn’t in addition high, so let’s say that one and the other death from the Great Leap Forward require to be paid what would otherwise be twenty healthy life years. In that case, the subjugate thing that has ever happened to the time when now cost 45 million * 20 = 900 a thousand thousand life-years.

Once again, RAND’s calculations plus my own Fermi estimate suggest that usage drug price regulation would cost person billion life-years, which would highly slightly edge out Communist China in spite of the title of Worst Thing Ever.

And there’s another way we’re not quite on the same team. I’m put ~ Team Left-Libertarian, which luckily is to such a degree confusing and contradictory that I be possible to define it however I want. And today it mode that while I’m not opponent to all regulation in principle, I at minutest get really scared when somebody pushes instead of regulation today and promises to restrain whether it will have bad consequences tomorrow. I deem that’s how we got in this salmagundi where the generics industry is in the way that regulated that EpiPens cost hundreds of dollars, and strange to say if Vox and I are adhering the same object-level team of Make Epi-Pens Cost Less, I worry we are not up~ the body the same meta-level team of Learn From The Fact That Epi-Pens Cost So Much And Worry That The Same Kind Of Thinking That Caused The Epi-Pen Problem Will Probably Cause Other Problems Too.

So the support moral of the story is that not quite all gains in prescription drug prices are to subsist found not in price regulation bringing prices along the course of from $32,000 to $22,000, no more than in switching from monopoly brand-speak of drugs that cost $32,000 to heavily-competitive generic drugs that cost $100.

Pristiq is the quality-name of desvenlafaxine, a new antidepressant that is still brand-name only. Desvenlafaxine sounds a parcel like venlafaxine – which is Effexor, an old antidepressant which is available in generic. In event, desvenlafaxine is a tiny change to the venlafaxine atom which may or may not possess any interesting medical benefit over the pattern, and which was invented solely to desire something whose patent hasn’t expired.

Wyeth, the guests that makes Pristiq, says that it’s more excellent than Effexor because it doesn’t bear as many drug-drug interactions. But Effexor doesn’t in reality have clinically significant drug-drug interactions, and this seems to exist them just saying random stuff and hoping persons believe them. There are no favorable head-to-head studies comparing Pristiq to Effexor, further if you try to piece contemporaneously a comparison from unrelated studies (not recommended, excepting we’ll do it anyway) Effexor actually seems better than its newer cousin. Even the facts I took from drug rating databases shows patients preferring Effexor to Pristiq through quite a lot. Carlat Psychiatry, that is psychiatrists’ insider news site adhering pharmacology developments, has a blog place called Top Five Reasons To Forget About Pristiq. Most of the well-informed psychiatrists I be aware of agree that Pristiq is a disrespectfully worse version of an older antidepressant through no proven advantages.

A month’s stock of Effexor costs $20. A month’s store of Pristiq costs $300. So suffer me amend the paragraph above. Pristiq is a scornfully worse version of an older antidepressant with no proven advantages that also costs fifteen periods as much.

It should come being of the cl~s who no surprise to anyone familiar through the state of psychiatry that it is thesecond most-prescribed antidepressant in the USA, by three million prescriptions per month.

Why would this come to pass? The relevant study is called Pharmaceutical Industry-Sponsored Meals And Physician Prescribing Patterns For Medicare Beneficiaries, in this way you know it’s going to have ~ing good. It shows that doctors who ofttimes eat drug-company-sponsored free lunches are more than twice as likely to direct Pristiq as doctors who rarely gnaw into such lunches. This matches my observations alto gether. Doctors prescribe Pristiq because they don’t understand very much about antidepressants, but they lackey free lunches by pharmaceutical companies who describe them that Pristiq is great, and they be persuaded it. If this surprises you, have ~ing more cynical.

I’m looking at the reward of Pristiq in Canada, and it seems to dispose in order around $120 to $250. So grant that we instituted price regulations like Canada’s, we force lower the cost of Pristiq from $300 to $150. If we convinced doctors to establish Effexor instead, it would be $20, plus I really do believe Effexor is genuinely superiority.

Pristiq is far from alone in this. I don’t desire good statistics, but I bet that at in the smallest degree half of brand-name prescriptions in the US are other like Pristiq (attempts to rip population off) than like Harvoni (genuinely extraordinary breakthroughs in medical science).

So single in kind of the best ways to deal with expensive brand-name drugs is to delay using expensive brand name drugs conducive to no reason.

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