RE: [SCORAI] Innovation in Pharmaceutical industry

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Halina Brown

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Sep 14, 2019, 8:22:23 PM9/14/19
to Joe Zammit-Lucia, Philip Vergragt, sco...@googlegroups.com

Following Philip’s suggestion I use a different heading.

 

Dear Joe,

Thank you for your thoughtful response. And of course it is a very complex issue. At this point I just want to give more precision to my “problem statement” so we communicate better. When I say that we cannot afford to treat everybody at the very high prices set by big pharma I am not referring to the drugs already existing and whether we should ration them (we should not). I mean the invention of new drugs, not yet existing, for as yet unknown disease. Essentially, I am talking about the pace of discovery.

 

Increasing the pace of new discoveries is generally considered to be an absolute good. But I question it. If given a choice of whether to make the existing drugs available and affordable to all, or introducing new drugs that will be affordable to only a few, I would choose the former. Since we as a society are increasingly looking at the latter situation in the foreseeable future, I would not be so concerned with the prospect of a slower pace of discovery under the conditions of publically owned pharmaceutical industry, as long as it can dramatically reduce social costs. A utilitarian view.

 

Unfortunately, the incentives for the big pharma to introduce new drugs, including the role of venture capital, are pushing in the opposite direction.

Halina

 

From: Joe Zammit-Lucia [mailto:jo...@me.com]
Sent: Saturday, September 14, 2019 7:14 PM
To: Halina Brown <HBr...@clarku.edu>
Cc: Philip Vergragt <pver...@outlook.com>; sco...@googlegroups.com
Subject: RE: [EXT] RE: [SCORAI] public amenities instead of basic income

 

Dear Halina,

You are right to question what we can afford or not afford. 

 

That’s a complex question in terms of how society wishes to spend its money. Do we want to spend more on education, healthcare, UBI, unemployment benefit, defense, culture and the arts, and the endless other things that we could spend money on. 

 

And how does ‘society’ make those decisions? 

 

And what is the best method for financing all of these things - public through the tax system? Private? Some kind of combination? 

 

And knowing that we cannot afford to make all these innovations available to everyone all the time, what mechanism of rationing should we use? And how do we justify it to those people whose child, for instance, could be cured of a severe disease but someone somewhere decides the treatment is not affordable? 

 

I would suggest that reducing these complicated questions for which no easy answers exist to equating pharmaceutical innovation with bankrupting the economy or that it’s all due to investors wanting easy returns may not do justice to the issues involved. 

 

Maybe I read different things than you do, but in my world these questions are constantly being discussed and argued over - and not just by moral philosophers. 

 

Best

 

Joe

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Dr Joe Zammit-Lucia

 

+31 646 86 21 76

 

radix.org.uk                                   amazon.co.uk    amazon.com

 

       

 

On Sep 14, 2019, at 9:31 PM, Halina Brown <hbr...@clarku.edu> wrote:


Thank you Philip, for these comments. I would go a step further with my critique of innovation in the pharmaceutical industry. We all take the concept of innovation as an absolute good. But is it really an absolute good if it bankrupts the economy? Do we really have enough money as a society to pay a million or two dollars per person for the future yet unknown cures to some yet unidentified diseases? This is not a new question among moral philosophers but I do not hear it being discussed at all in the public forum. There is a reason why most of the costs of bringing new pharmaceuticals to the market is covered by venture capital: the expectation of quick and huge returns to the investors and shareholders.

Halina  

 

From: Philip Vergragt [mailto:pver...@outlook.com]
Sent: Saturday, September 14, 2019 10:09 AM
To: jo...@me.com; Halina Brown <HBr...@clarku.edu>
Cc: 'sco...@googlegroups.com' <sco...@googlegroups.com>
Subject: [EXT] RE: [SCORAI] public amenities instead of basic income

 

Dear Joe, and all,

With the danger of being labeled as a retro 60s or 70s adept, I’d like to discuss the drive for more and more innovation. First, I think that it would be useful to consider public-private partnerships with strong and clear rules as to profits and ethical research. Next, biomedical research takes us with the speed of light towards cloning humans and gene-editing and whatever these new technologies are being called, without a viable discussion about the desirability of that all, and about possible negative side effects. That takes me straight to Joe’s point about innovation. While I see the benefits of biomedical innovation and we all benefit from it in our personal lives, I would like to propose that we do not take “more innovation is better” for granted; just like we are questioning economic growth and unbridled consumerism. Innovation should be led by social consensus, not by profit making.

I agree that most innovation comes from smalls start-ups; and it is not easy to regulate that; but the implementation comes through buying up of small start-ups by large corporations; and there is the possibility for public intervention and regulation.

Warm regards,

Philip

 

From: 'Joe Zammit-Lucia' via SCORAI [mailto:sco...@googlegroups.com]
Sent: Friday, September 13, 2019 12:45 PM
To: Halina Szejnwald Brown
Cc: sco...@googlegroups.com
Subject: Re: [SCORAI] public amenities instead of basic income

 

Dear Halina,

With respect, I find the paper circulated to be well off base. 

 

Public ownership of pharmaceutical research and development was tried in the 60s and 70s in some countries. It was an absolute disaster. Innovation stalled amid the public bureaucracy and lack of real incentives to innovate. Bureaucracies don’t innovate, they mainly spend their time justifying why they should get bigger budgets. 

 

The authors clearly have no idea of the dynamics of pharmaceutical innovation most of which now comes from agile startups funded by the financial markets rather than big pharma. This is emerging as the only way in which the high risk nature of pharmaceutical research and the need for global availability of innovation can be sustained. The idea that government monopoly (with all the inevitable political shenanigans that it involves) can carry this sort of risk profile is laughable. 

 

I also personally find the retrograde discussion of pitting private vs public a tiresome throwback to the 1970s. I thought we were done with all that and that most people had moved on to an understanding that a mixed economy works best provided we keep working towards refining the incentive structures - which are currently out of whack - and can get better but will never be perfect. 

 

The issue of healthcare funding and access is a very valid one but one that is proving to be highly intractable in most countries. Would be great if there were some magic bullet but there isn’t. 

 

And it’s not just the difficulty of trying to work out appropriate pricing for drugs (an impossibility) but also gets one into what should doctors, nurses and everyone else get paid? What is the right price for an MRI scanner? Should governments be building those too? And everything else? 

 

I have no easy answers I’m afraid. And, sadly, neither does anyone else. 

 

Beware those selling snake oil.

 

Best

 

Joe

 

 

Dr Joe Zammit-Lucia

 

+31 646 86 21 76

 

radix.org.uk                                   amazon.co.uk    amazon.com

 

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On Sep 13, 2019, at 2:20 AM, Halina Brown <hbr...@clarku.edu> wrote:

Dear SCORAI’ers,

Some of you may find the attached document about the public alternative to Big Pharma interesting. It is a fine report issued by the Next System Project in the US. The proposal in it focuses on the US but it can be just as well applied in other advanced economies with a strong research sector.

https://thenextsystem.org/medicineforall?mc_cid=9bc87732e4&mc_eid=e81c2d3d7d

 

I find this proposal to be an important alternative to guaranteed basic income proposals. I have always been uncomfortable with the idea of guaranteed basic income because I see it as a massive indirect subsidy for the private sector that wants people to spend money on more and bigger stuff. This sector will surely devise the cleverest of ways to extract that extra income from citizens.

At the risk of sounding awfully patronizing, I believe that many people will spend that extra income not on better housing, live necessities, education for their children or other such “wise” choices, but on other things.

 

A better solution, other than distributing cash, is to create access to affordable high-quality housing, high quality free education, low cost or free healthcare, and low cost or free medicines, etc. This is why I find this report interesting.

 

Halina S. Brown
Professor Emerita of Environmental Science and Policy
Clark University
Worcester, MA 01610
http://halinasbrown.com

Associate Fellow
Tellus Institute
2 Garden Street, Cambridge MA 02438

http://tellus.org


Co-founder and Member of Executive Committee
Sustainable Consumption Research and Action Initiative, SCORAI
www.scorai.org

 

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Joe Zammit-Lucia

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Sep 15, 2019, 3:41:38 AM9/15/19
to Halina Szejnwald Brown, Philip Vergragt, sco...@googlegroups.com
Dear Halina,

Thanks for this. 

If I understand you correctly, the argument you are putting forward is that we should slow down the pace of drug innovation because we can’t afford to pay for it. 

This is an interesting approach. I’ll need to think about it further. 

I would make a couple of initial comments. 

The first is that it’s not that we can’t afford it is that we have chosen not to afford it because we choose to spend our money elsewhere. 

The second is why the focus on pharmaceuticals? Why not, for instance, shut down half our universities because we can’t afford so much education? And then we can put that money towards better health care for all. On what basis are you putting health care, and particularly pharmaceutical expenditure, (still a very small proportion of total health care expenditure)  at the bottom of your priority list? Also given that we know, in utilitarian terms, that every dollar spent on new drugs delivers more healthcare benefit than almost any dollar spent anywhere else in the healthcare system? 

Could it be that your objections are primarily based on the fact that pharma is private not public and therefore somehow less deserving? 

I believe there is a reasonable discussion to be had about how we deal with new drugs that produce very significant benefit at Hugh cost to only a very small group of people because they are targeted at somewhat uncommon diseases. That discussion rages constantly in my world. 

Finally, you seem to suggest that socially we’re better off not making things available at all if few people can afford them. This is a question of ideology which is therefore a highly personal choice and not subject to productive discussion of which is ‘right’ or ‘wrong’. It’s the socialist/communist perspective that equality should trump everything else. So we should level everything down and we’re better off nobody having a benefit rather than only some having it. 

My own perspective is that that approach has been shown to have failed. It does not result in the much vaunted equality. It results in a shift in privilege from those with money to those with political and bureaucratic power. Some may prefer that, others not. But full equality is a delusion. 

Finally, how are we going to stop innovation? If one country tried it, innovative power would simply move elsewhere. I’m afraid it won’t absolve us from having to make difficult choices. 

Best

Joe

Dr Joe Zammit-Lucia

+31 646 86 21 76

radix.org.uk                                   amazon.co.uk    amazon.com

       


On Sep 15, 2019, at 1:22 AM, Halina Brown <hbr...@clarku.edu> wrote:

Following Philip’s suggestion I use a different heading.

 

Dear Joe,

Thank you for your thoughtful response. And of course it is a very complex issue. At this point I just want to give more precision to my “problem statement” so we communicate better. When I say that we cannot afford to treat everybody at the very high prices set by big pharma I am not referring to the drugs already existing and whether we should ration them (we should not). I mean the invention of new drugs, not yet existing, for as yet unknown disease. Essentially, I am talking about the pace of discovery.

 

Increasing the pace of new discoveries is generally considered to be an absolute good. But I question it. If given a choice of whether to make the existing drugs available and affordable to all, or introducing new drugs that will be affordable to only a few, I would choose the former. Since we as a society are increasingly looking at the latter situation in the foreseeable future, I would not be so concerned with the prospect of a slower pace of discovery under the conditions of publically owned pharmaceutical industry, as long as it can dramatically reduce social costs. A utilitarian view.

 

Unfortunately, the incentives for the big pharma to introduce new drugs, including the role of venture capital, are pushing in the opposite direction.

Halina

 

From: Joe Zammit-Lucia [mailto:jo...@me.com]
Sent: Saturday, September 14, 2019 7:14 PM
To: Halina Brown <HBr...@clarku.edu>
Cc: Philip Vergragt <pver...@outlook.com>; sco...@googlegroups.com
Subject: RE: [EXT] RE: [SCORAI] public amenities instead of basic income

 

Dear Halina,

You are right to question what we can afford or not afford. 

 

That’s a complex question in terms of how society wishes to spend its money. Do we want to spend more on education, healthcare, UBI, unemployment benefit, defense, culture and the arts, and the endless other things that we could spend money on. 

 

And how does ‘society’ make those decisions? 

 

And what is the best method for financing all of these things - public through the tax system? Private? Some kind of combination? 

 

And knowing that we cannot afford to make all these innovations available to everyone all the time, what mechanism of rationing should we use? And how do we justify it to those people whose child, for instance, could be cured of a severe disease but someone somewhere decides the treatment is not affordable? 

 

I would suggest that reducing these complicated questions for which no easy answers exist to equating pharmaceutical innovation with bankrupting the economy or that it’s all due to investors wanting easy returns may not do justice to the issues involved. 

 

Maybe I read different things than you do, but in my world these questions are constantly being discussed and argued over - and not just by moral philosophers. 

 

Best

 

Joe

Dr Joe Zammit-Lucia

martin.hensher

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Sep 15, 2019, 11:14:33 PM9/15/19
to SCORAI
Thanks for this great thread (admittedly complex!).  A couple of observations from my perspective (health economics and health policy, and having worked in several different countries but not in the USA).

Joe is right that these questions (affordability, rationing etc) have been widely debated for many years in health economics, medical ethics etc.  there are many partial solutions, all fairly context specific, depending on societal values that have usually already been expressed - most crucially whether or not a country will offer universal health coverage to its people.  But no system can evade the affordability question.

But what has been debated less, and which is of great importance for sustainable consumption, is how beneficial medical technologies (current and still-to-be-invented) actually are.  Health care is an essential good, and most of those reading this already owe their survival directly or indirectly to modern healthcare.  But what is becoming clearer in recent years is that a lot of the interventions we give people frequently provide them little benefit, and expose them to harm.  Drugs or procedures that are highly effective in one group of patients (usually those who are quite severely ill) tend to be given to more and more people (who are increasingly less sick); unsurprisingly, these show dimishing marginal benefits.  Yet the risk of adverse effects (drug side effects, healthcare acquired infections etc) tends to have a constant risk - so people get less and less benefit for a constant risk profile.  This problem of overtreatment and overdiagnosis is now beginning to get the attention it deserves.  For those of you lucky enough to live in the USA, estimates of the scale of overtreatment and unnecessary care are converging on about 30% of total US health spend; maybe 20% in other OECD countries.  Given that healthcare drives ~10% of US greenhouse gas emissions, that means maybe 3% of GHG (30% of 10%) are driven by non-beneficial healthcare.

So - ironically - we may be better placed to measure harmful overconsumption in health care (which we all agree is still a basic need and a human right) than we are in other, less “essential” areas of consumption.

On pharma, for what it’s worth.  Both Big Pharma and Joe’s agile start-ups have walked away from antibiotic development- the biggest area of need we face, as antimicrobial and antibiotic resistance marches onwards.  They have left this to governments; they should not get any cut of any future profits.  A publicly owned national pharma utility in most countries is probably going to be essential to fill this void, and would have great value in providing some resilience and competition in this sector. The start ups are mainly clustered in the quest for precision and genomic medicine - thin pickings to date on the whole (cancer drugs that buy you another few weeks), and when they do strike lucky, prices rise to match.  

Is nationalising pharma the answer?  I don’t know.  But if the current ecosystem of pharma and biotech is the solution, I’m not sure I know what the question is...

Martin

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Joe Zammit-Lucia

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Sep 16, 2019, 12:26:16 PM9/16/19
to martin....@utas.edu.au, SCORAI
Dear Martin

Thanks you for providing this perspective which is comprehensive and reflects much of the debate that has been going on for, as you say, many, many years.

You make a number of statements that reflect a certain set of values. I suggest that we should be careful in presenting values that we ourselves may buy into as unchallengeable fact. For instance the statement that health care is a human right. You and I might see it that way, but we should be wary because such statements raise inevitable issues: how much health care is a human right and how much not? what counts as health care and what counts as interventions that we would choose not to class as such. As you know these are highly contested questions.

Health economics has brought a lot of useful insights to many health care questions. But, as you well know, health economics is not value free. It is simply a form of codification of an underlying set of values. In my opinion, those values still are, and will forever remain, contested. For many years we have risked hiding value judgements in formulae and equations that gives them the semblance of objectivity and a 'scientific' veneer whereas they are what they are - value judgements and the decision that flow from their codification.

So when you make statements like new treatments providing 'little' or 'marginal' benefits - who is to be the judge of that? Who is the judge of whether your quoted 30% of US health care spend is 'unnecessary'? And from whose perspective?

Your implication that providing a few additional weeks of life for cancer patients is not worth the cost may be a reasonable perspective for a publicly funded system to take but may well not be shared by some patients themselves or their families.

The canned answer is to call it the 'societal' perspective - which really means the perspective of those who happen to have power in society at any particular time.

My point here is not to contradict what you are saying. Just to point out that these statements are based on value judgements that are never universally shared and we should be wary of presenting them as unchallengeable fact or ever stop questioning them because they have become received wisdom among certain professional classes.

That doesn't mean that we don't have to make decisions just because these things are always contestable. But they do raise other questions about appropriate structure of health care systems, funding models, availability of choice and, politically, whether one buys into the statist model where these decisions are made by the state on behalf of everyone or alternative models where individuals should be given as much personal choice as possible within practical limitations. These are ideological and political questions not technical or economic ones. And they cannot be solved by technical analysis.

Your example of antibiotics for multi-resistant organisms is a very important one. The incentive systems we have built (financial, social and political - because, in spite of some existing perspectives, it's not all just about the money) means that the industry will not touch it. What we now realize is that if the industry won't touch it, nobody else has the skills and capability of doing something about it. People have been grappling for how to resolve this specific issue for years - with no results as far as I can see.

Your point about high failure rates from genomic research and high prices when people strike lucky is absolutely correct. That's the nature of things. You can either put your money on black or red and double your money if you win; or choose to put your money on zero and get a much bigger payout for the risk you've taken. But nobody would ever out their money on zero if they only got a double your money payout with a multiple of the risk. And that equation doesn't change whether it's private investors for the government or anyone else who is putting down their money. It's just a question of who can best afford those levels of risk. My view is that only the highly diversified global financial system can possibly take, or should be taking, those sorts of risks.

No current system is perfect. And no future system will ever be perfect either. But we are learning and we are making slow and halting progress. I suggest we avoid falling for the lure of the illusory magic bullet.

Best

Joe



Dr Joe Zammit-Lucia

+31 646 86 21 76

radix.org.uk                                   amazon.co.uk    amazon.com

       


Joe

Dr Joe Zammit-Lucia

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Joe Zammit-Lucia

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Sep 16, 2019, 12:41:58 PM9/16/19
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Dear Halina

Fair enough if you'd like to take that perspective.

Someone who has a child with a currently incurable disease might take a different view. And it is also possible that the long term care costs of looking after people with such incurable diseases are actually much higher than an 'expensive' new drug that might be curative.

Best

Joe



Dr Joe Zammit-Lucia

+31 646 86 21 76

radix.org.uk                                   amazon.co.uk    amazon.com

       


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Rahul Goswami

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Sep 17, 2019, 4:34:10 AM9/17/19
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Dear Halina and others, ref drugs and innovation, what is the status of
traditional medicine in the USA (I am guessing several in this
discussion are in USA)? From what we in Asia see, much of the 'west'
legislatively discriminates against traditional medicinal knowledge and
practice. These sciences - ayurveda, Chinese traditional medicine, etc -
are kept out of both public and private healthcare systems. Regards, Rahul
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