Vaccines by the numbers
08 Dec 2015 Leave a comment
in health economics, politics - Australia, politics - USA Tags: anti-vaccination movement, antiscience left, conspiracy theories, conspiracy theorists, cranks, Leftover Left, New Zealand Greens, quackery, vaccinations, vaccines
More will quietly die waiting if Pharmac is politicised @AndrewLittleMP @annetterongotai
07 Dec 2015 2 Comments
in health economics, politics - New Zealand
https://twitter.com/KevinHague/status/673665100637560832
Green Party health spokesman Kevin Hague is right on the money when he says that Pharmac should not be politicised.
The promise of the opposition leader Andrew Little to fund an extremely expensive semi wonder drug from melanoma turned down for Pharmac funding was as unwise as it was well-meaning. The decision of the Labor Party to launch an online petition to fund the drug was unwise to the point of ghoulishness.

The leader of the opposition has promised to spend $200,000 per a drug that doesn’t work 66% of the time, but helps 34% of patients and cures 6% of patients. The average increase in life expectancy as a result of taking this new drug is about 18 months.
The limited last stage of cancer funding that was turned down was to cost $30 million: that is nearly 4% of Pharmac’s $800 million budget. Funding for the entire 2000 melanoma patients who might benefit from this new drug would cost more than half the entire Pharmac budget for a year – just one drug would cost this much!
Remember too that there are plenty more of these expensive semi-wonder drugs coming down the pipe.
There is rationing in every area of government. There is always some poor bastard just over the other side of the line and all too often he has a sad story to tell.

In the health sector there always be someone who’s lifesaving drug was almost funded but was not, who was second on the organ donation waiting list or would have lived if the waiting list for surgery at the local public hospital was just that little bit shorter.
The proper response of ministers and parliament is to decide how much to allocate to each area, the rules whereby this funding is distributed and then appoint high-quality people to administer those rules. Fairness in this type of rationing is adherence to the rules laid down in advance by ministers and parliament.
Naturally, everyone be horrified if a politician was deciding who got the next kidney transplant. There are be outrage if a patient moved up the hospital waiting list because of political intervention.
It is the case of the seen and the unseen: it is obvious that someone misses out if there is politicisation of the kidney transplant waiting list or hospital waiting lists.
It is not so obvious that someone else’s drug is funded less generously or not at all if another drug with better publicists and lobbyist moves up the list for funding.
The reason why there is a separation of powers in medical rationing is to stop these injustices – to stop favouritism. Politicians fund the system and hire experts to administer it impartially.
Gordon Tullock wrote a 1979 New York Law Review book about avoiding difficult choices. His review was of a book by Guido Calabresi and Philip Bobbitt called Tragic Choices. This book was about tragic choices involved in the allocation of kidney dialysis machines (a “good”), military service in wartime (a “bad”), and entitlements to have children (a mixed blessing).
Tullock argued that we make a decision about rationing resources through the following steps:
- how much resources to allocate,
- how to distribute the allocated resources, and
- how to think about the previous two choices, which may have been very personally unpleasant to make because some had to miss out with tragic consequences for them.
To reduce the personal distress of making these tragic choices, Tullock observed that people often allocate and distribute resources in a different way so as to better conceal from themselves the unhappy choices they had to make. This includes funding drugs that have been refused by Pharmac if their supporters can mount a good publicity campaign.
Critically for our purposes here, Tullock argue that they do this even if this less personally distressing system of allocation and distribution means the recipients of these choices as a group are worse off and more lives are lost than if more open and honest choices about there are can only be so much that can be done to save lives. By less personally distressing, Tullock meant less personally distressing to the people making the decisions.
Campaigns to fund drugs remind the public of the specific individuals and groups who missed out on a potentially life-saving new drug. If the campaign presses the right buttons, the new drug is funded to make them go away and stop reminding politicians and the public of the tragic consequences of health budget rationing.
Hear no evil, see no evil. Politicians and the public are willing to pay to not be reminded of the tragic consequences of rationing in the health and pharmaceuticals budget.

Resources are reallocated and redistributed in a way that the political decision makers are less likely to find out that some patients missed out. Kevin Hague is absolutely right when he says
If $30Mn is spent every year on Keytruda, it won’t be available for other people with different conditions, on drugs for which it says it has better evidence of health gain. One of the missing parts of the debate is the voice of those whose lives will be saved, extended or otherwise improved because the medicines they need can be funded.
Hague with the chief executive of a district health board when there is a concerted public campaign to fund a breast cancer drug. Long courses of Herceptin had been turned down for Pharmac funding. The National Party campaigned in a subsequent election for the funding of this drug despite knowing the reservations of Pharmac about its cost effectiveness.
The trick is funding the drug sought by patients complaining about missing out by allocating less resources to many different current and future funding areas. These must be areas of funding where patients don’t know they are missing out or are waiting longer and perhaps living shorter lives as a result.
This concealment of the tragic choices involved in how the health system must allocate and distribute pharmaceutical funding is playing out before our very eyes this week.
Andrew Little by promising to fund and John Key by saying he might consider funding this particular semi-wonder drug does not increase the size of the Pharmac budget.
Unless the Pharmac budget is increased, someone else misses out on their lifesaving drug but we will never know who they are. Because they cannot complain because they do not know they have been disadvantaged by such political machinations, their political angst is not taken into account in the brutal political calculus of concealing of the tragic reality of medical rationing.
There is talk of an early access scheme. All that means is additional funding that could have gone to Pharmac’s next on its waiting list goes to politically sexier new drugs with less promise to save lives. If there is no additional funding, an early access scheme would institutionalise the politicisation of the tragic choices Pharmac must make every week.
Everybody is better off if ministers and the parliament face up to making tragic choices in drug funding and the rest of the health sector. Covering that up by funding whatever new drug gets in the media makes the issue go away for the next few news cycles but more patients die because they are moved down the waiting list for life-saving healthcare.
Some reasons not to eat organic food
06 Dec 2015 Leave a comment
in economics of information, economics of media and culture, health economics Tags: agricultural economics, food snobs, organic farming, Twitter left
Prohibition ended this day 1933
05 Dec 2015 Leave a comment
in economic history, economics of regulation, health economics, politics - USA Tags: alcohol prohibition, alcohol regulation, meddlesome preferences, nanny state, prohibition era
December 5th 1933 – The night they ended Prohibition http://t.co/OCxvyNfVIR—
Old Pics Archive (@oldpicsarchive) April 11, 2015
The paradox of body shapes and body mass indexes
04 Dec 2015 Leave a comment
in health economics Tags: life expectancies, obesity
Cut drug lags with Free To Choose Medicine @annetterongotai @dbseymour @PeterDunneMP
03 Dec 2015 Leave a comment
in economics of regulation, health economics, politics - New Zealand, politics - USA, Sam Peltzman

Bart Madden and Vernon Smith outlined a brilliant proposal charted above to shorten lags in the availability of life-saving medicine based on reforms in Japan:
Recently, Japanese legislation has implemented the core FTCM [Free to Choose Medicine] principles of allowing not-yet-approved drugs to be sold after safety and early efficacy has been demonstrated; in addition, observational data gathered for up to seven years from initial launch will be used to determine if formal drug approval is granted. In order to address the pressing needs of an aging population, Japanese politicians have initially focused on regenerative medicine (stem cells, etc.).
Source: Give The FDA Some Competition With Free To Choose Medicine – Forbes via A Dual-Track Drug Approval Process.
This process would release the relevant data behind the drug including its clinical trials on a web portal so that patients and their doctors can work out whether a new drug is suitable to them given their genetic markers. Madden and Smith explain the operation of the web portal for Free to Choose Medicine (FTCM) as follows:
Doctors would be empowered to use their medical knowledge and in-depth knowledge of their patients similar to how they decide on off-label use for approved drugs, i.e., for uses that the FDA has neither tested nor approved but, in the opinion of doctors, are likely to be beneficial to patients. To gain early access, patients would purchase the drug from developers and consent to doctor and developer immunity from lawsuits except in the case of gross negligence or willful misconduct.
Off label use of medicines arises because the current Food and Drug Administration (FDA) process for drug approval has several phases. Phase 1 tests for the safety of the drug. Later phases are about whether the drug has its predicted effects. That should not be a concern of the FDA or its superfluous New Zealand equivalent Medsafe.
If a new drug isn’t better than the existing competition, that’s a problem for its investors for backing the wrong horse. It’s up to its investors and potential buyers to work out for themselves whether a new drug is more effective than the existing options. That’s a commercial decision, not a decision from regulators.
https://twitter.com/Carolynyjohnson/status/667696845615968257
Once a drug is approved by the FDA for particular uses, doctors and researchers often discover that a drug has other clinical applications.

Source: Pharma Marketing Blog
Rather than go through another round of FDA approvals, doctors simply prescribe that drug despite the fact it is not approved by the FDA for that particular clinical use. This is what is called off label prescription.
A number of US states have passed hopelessly unconstitutional Right to Try legislation that authorises the prescription of new drugs not approved by the FDA.
The Free to Choose Medicine proposal is similar to Right to Try legislation. Free to Choose Medicine would allow doctors to make their own prescription choices for their patients as long as the new drug has been shown to be safe. That is, it has passed Phase 1 of the FDA drug approval process. Phase 1 is about drug safety.
In 1962, an amended law gave the FDA authority to judge if a new drug produced the results for which it had been developed. Formerly, the FDA monitored only drug safety. It previously had only sixty days to decide this. Drug trials can now take up to 10 years.
https://twitter.com/MaxCRoser/status/627581135355310080
Sam Peltzman showed in a famous paper in 1973 that the 1962 amendments to US Federal drug approval laws reduced the introduction of effective new drugs in the USA from an average of forty-three annually in the decade before the 1962 amendments to sixteen annually in the ten years afterwards. No increase in drug safety was identified.
Peltzman found that the unregulated market quickly weeded out ineffective drugs prior to the 1962 law change in the USA. The sales of ineffective new drugs declined rapidly within a few months of their introduction.
Doctors stop prescribing medicines that don’t work. Patients complain quickly about medicines that don’t work. What matters is they had the chance to try this drug.
If economists have a bitter drinking song, a battle cry that unites the warring schools of economic thought all, it would be “how many people has the FDA killed today”. Many drugs became available years after they were on the market outside the USA because of drug approval lags at the FDA. The dead are many. To quote David Friedman:
In 1981… the FDA published a press release confessing to mass murder. That was not, of course, the way in which the release was worded; it was simply an announcement that the FDA had approved the use of timolol, a ß-blocker, to prevent recurrences of heart attacks. At the time timolol was approved, ß-blockers had been widely used outside the U.S. for over ten years. It was estimated that the use of timolol would save from seven thousand to ten thousand lives a year in the U.S. So the FDA, by forbidding the use of ß-blockers before 1981, was responsible for something close to a hundred thousand unnecessary deaths.
Free to Choose Medicine is an excellent way to break the regulatory deadlock over drug lags. Free to Choose Medicine should be adopted in New Zealand. Any new drug that has passed the phase 1 drug safety part of regulatory approval processes in any one of the USA, UK, Australia, Canada or Germany should be lawful to prescribe in New Zealand. New drugs should not have to go through the superfluous processes of Medsafe.
The existing drug regulatory regime is based upon making the drug safe for the average patient. That has been swept aside by pharmaceutical innovation as Madden and Smith explain:
Today’s world of accelerating medical advancements is ushering in an age of personalized medicine in which patients’ unique genetic makeup and biomarkers will increasingly lead to customized therapies in which samples are inherently small. This calls for a fast-learning, adaptable FTCM environment for generating new data.
In sharp contrast, the status quo FDA environment provides a yes/no approval decision based on statistical tests for an average patient, i.e., a one-size-fits-all drug approval process. In a FTCM environment, big data analytics would be used to analyze TEDD [Tradeoff Evaluation Drug Database] in general and, in particular, to discover subpopulations of patients who do extremely well or poorly from using a FTCM drug.
Global deaths from indoor and outdoor pollution
03 Dec 2015 1 Comment
in applied welfare economics, energy economics, environmental economics, health economics, transport economics, urban economics Tags: air pollution, indoor pollution, The Great Escape
A specialty drug for a year costs more than most household incomes
02 Dec 2015 Leave a comment
in health economics Tags: creative destruction, drug lags, drug prices, entrepreneurial alertness, patents and copyrights
Homeopathy explained
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in economics of information, economics of media and culture, economics of regulation, health economics Tags: consumer fraud, cranks, homeopathy, quackery, Quacks
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in applied welfare economics, economics of regulation, health economics Tags: anti-vaccination movement, expressive voting, GMOs, gun control, political psychology, risk risk trade-offs




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