Comments on the pharma industry

I think the problem in pharma is similar to "Moneyball" - people are pursuing the wrong goals and measuring success incorrectly. Health care should be a holistic, systemic effort. It's about measuring quality of life enhancements, longevity, and other social goods vs. opportunity costs. I guess that is similar to the NHS but of course their system has flaws too. But if we really measured health care properly, and priced drugs and services based on that, the industry would look radically different. Now we just have fragmented players each pursuing their own narrow profit motives, and the invisible hand breaks down (well that theory was never meant to characterize our complex, computerized, global, accountability-lacking modern economy anyway). Academics just want to publish so they can get grants (that are getting harder to come by due to austerity). Drug and device makers just want to develop positive NPV projects and milk monopoly rents. Physicians just want to prescribe more high-margin treatments. Insurers just want to place the right bets. So of course we have inefficiencies. Though drugs are not the biggest culprit for our current healthcare mess, and it's probably more due to unnecessary diagnostics, procedures (esp. end-of-life), and implanted devices. We have a treatment-based, consumption system when it should be a prevention-based one.

I know gov-sponsored enterprises don't have a great track record, but I would propose something like that - not that I know anything about health policy. But like how the gov mandates that vaccine and antiviral makers have a sufficient stock of affordable product in case of an outbreak, they could take it a bit further and manage their own drug development org. Otherwise the market doesn't price healthcare properly and you get shortages. It's kind of obscene for the US that spends so much on health to have to ration, and we're not talking about Viagra here: http://www.npr.org/blogs/health/2011/10/04/140958404/shortages-lead-doctors-to-ration-critical-drugs. So like how the FDIC backs up commercial banks, maybe a nonprofit federal drug org could back up the pharma industry by producing sufficient quantities of generics. I know Asian firms are doing that now, but might as well consolidate into a single point of sale and keep jobs here if it's affordable? It's also a national security issue. Then this org could reinvest its excess cash into research to compete with the big pharmas and put price pressure on them too. But of course the conservatives would never allow such a "threat to the free market."

I would also hold academics more accountable, as the "Inside Job" documentary implicated academic economists for pumping up optimism during the credit bubble. For academics and MDs who have relationships with pharmas, if their published research is used in drug dev't and the drug turns out to fail later (esp. during expensive clinical trials), then those researchers should have to surrender some of their grant $ or other compensation. I know this is also impractical and fraught with issues, the general idea I'm getting at is to hold the upstream guys accountable for downstream results. I know research on paper may look great but then fail in practice through no fault of their own. But there can't be this total detachment. That's why some universities are even building their own drug dev't infrastructure. They discover the IP, they know it the best, so why not keep the dev in-house? Plus it keeps the research team focused on practical issues. I am not sure how to do this best, but basically there has to be some way to punish researchers for "bad projects", otherwise the current incentive structure just encourages them to pump out all sorts of pie-in-the-sky, diarrhea-of-the-brain, quantity-over-quality findings. This is exacerbated by the glut of bioscience PhD's getting pumped out of schools (esp. from Asia) - and often they are uncreative and under-qualified, but the school just needs to get rid of them after 6 years (so many of them can't get PI jobs and end up taking the jobs of BS and MS level people, thereby blunting the career dev of people like me). They are permitted to publish crap, since there is also a glut of stupid journals out there who are happy to fill their pages with something and make some money (you probably have seen the same in your field?). Then they over-sell them as the next wonder drug, and we end up wasting billions on a stupid idea. It's better and cheaper to kill bad projects early, and punish bad researchers so they really have to stake their careers on only the best projects. Of course you can tell that I'm a little (or a lot) jaded from R&D, but I think I have a point. And I haven't even gotten into the data fraud issue...

http://wenchwisdom.blogspot.com/2011/12/this-just-in-scientists-elusive-goal-to.html 

I think the patent system needs to be reformed too. Monopolies are rarely ever in the public's best interest. Yeah pharma bitches that if they don't get exclusivity, it's not "cost effective" for them to research new drugs, you know the usual blackmail shit. Even if we threw out our generous IP laws tomorrow, I guarantee you that it would still be profitable for someone to develop a diabetes or Alzheimer's drug, because like we see in semiconductors and other products, there is still value in being first-to-market and leading the learning curve. I do agree though that the FDA clinical approval process can be reformed and probably simplified (though how can we do that when the GOP cuts funding to the agency? I think they just want to gut regulators and let the industry "self monitor"). But like other industries, there is a big established infrastructure of paper pushers who stand to lose from reforms, so they will fight for the status quo. It's not an easy fix by any stretch. I can identify some problems, but I am not sure how to fit all the pieces together to make a better solution. Well if I did know, I would be set for life. :)