Against patents

The case against patents

Some months ago, a WP blog hightlighted a paper by Boldrin and Levine with a straightforward title. Now you can read it at the Journal of Economic Perspectives. The summary is in the first paragraph:

The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity. This disconnect is at the root of what is called the “patent puzzle”: in spite of the enormous increase in the number of patents and in the strength of their legal protection, the US economy has seen neither a dramatic acceleration in the rate of technological progress nor a major increase in the levels of research and development expenditure.

A risky statement unless there is a clear support from research. However, once you continue reading you'll have arguments to be convinced about it. The impact on pharmaceutical industry is analysed in detail:

There are four things that should be born in mind in thinking about the role of patents in the pharmaceutical industry. First, patents are just one piece of a set of complicated regulations that include requirements for clinical testing and disclosure, along with grants of market exclusivity that function alongside patents. Second, it is widely believed that in the absence of legal protections, generics would hit the market side by side with the originals. This  assumption is presumably based on the observation that when patents expire, generics enter immediately. However, this overlooks the fact that the generic manufacturers have had more  than a decade to reverse-engineer the product, study the market, and set up production lines. Lanjouw’s (1998) study of India prior to the recent introduction of pharmaceutical patents there indicates that it takes closer to four years to bring a product to market after the original is introduced—in other words, the fifi rst-mover advantage in  pharmaceuticals is larger than is ordinarily imagined. Third, much development of pharmaceutical products is done outside the private sector; in Boldrin and Levine (2008b), we provide some details. Finally, the current system is not working well: as Grootendorst, Hollis, Levine, Pogge, and Edwards (2011) point out, the most notable current feature of pharmaceutical innovation is the huge “drought” in the development of new products.

And the proposal is a controversial one:

we could either treat Stage II and III clinical trials as public goods (where the task would be financed by National Institutes of Health, who would accept bids from firms to carry out this work) or by allowing the commercialization of new drugs—at regulated prices equal to the economic costs of drugs—if they satisfy the Food and Drug Administration requirements for safety even if they do not yet satisfy the current (overly demanding) requisites for proving efficacy.

The last sentence sounds far from what should be a "fair" regulatory process in pharmaceuticals. Anyway, it seems that we have entered in a new perspective on patents and more scholars will be supporting it in the future.  I'm close to this perspective, but the details are important, as usual.

Overvaluing expensive drugs

A research from University of York has concluded that NICE is overvaluing expensive treatments because its cost threshold - the price at which a treatment is deemed good value for the NHS - is set too high. The threshold value per quality-adjusted life year (QALY) - a measure of the health benefits of a treatment - should be lowered from £30,000 to just £18,317, their analysis found. It suggests the NHS may be wasting money on treatments that are not as good value as first thought. Professor Sculped said:

It is crucial that the cost effectiveness threshold is seen as representing health forgone as the additional costs of new technologies are imposed on the fixed budgets of local commissioners. For decisions made by NICE and many policy options considered by the NHS and DH, this is the key to establishing the value for money of new services.

This is a strong criticism against QALYs, let's see if it has some impact in the near future. Fortunately, the British have the opportunity to debate on it. Nearer here, the press is saying now that 30% of drugs requested for approval were rejected (7 out of 24). No details available, no website, no transparent process. That's alleged democracy, southern style. NTA=Nothing to add.

PS. If you don't want to read the article, have a look at this presentation. I suggest you save it, it may be useful for the future.

PS. As you can see from my blog, in one week, two officials have said different numbers of rejected drugs for public funding (2 vs 7). Does this make any sense? Is there anybody asking for an explanation in Parliament?

PS. Follow the controversy on DSM-5 at BBC News.

PS. Check here how our drug prices have converged to the european average.

PS. Must read: Uwe Reinhardt blog.

PS. Interesting article on 20 years of economic evaluations of cancer.

El valor de les proves diagnòstiques

Can and Should Value Based Pricing Be Applied to Molecular Diagnostics?

Cal dir que la distància entre preu i valor en cada mercat és ben diferent. Penseu per un moment en una prova diagnòstica. La informació que ofereix pot capgirar el curs de la malaltia, i fins i tot assegurar la supervivència. El preu que en paguem s'acosta previsiblement més al cost que al valor que representa.
Fa poc que els de l'Office of Health Economics han publicat un article que ens ofereix una perspectiva en aquest sentit.
El resum:

Current pricing and reimbursement systems for diagnostics are not efficient. Prices for diagnostics often are driven by administrative practice and expected production cost. The purpose of this paper is to discuss how a value based pricing (VBP) framework that is being used to ensure efficient use and price of medicines also could be applied to diagnostics. Diagnostics not only facilitate health gain and cost savings, but also provide information to inform patients’ decisions on interventions and their future “behaviours”. For value assessment processes, we recommend a two-part approach. Companion diagnostics introduced at the launch of the drug should be assessed through new drug assessment processes considering a broad range of value elements and a balanced analysis of diagnostic impacts. A separate diagnostic-dedicated committee using VBP principles should review other diagnostics lying outside the companion diagnostics-and-drug “at-launch” situation.

A data d'avui em costa assenyalar quin és el mecanisme de preus òptim per a les proves de laboratori, ni sé si existeix com a tal un mercat que permeti aquesta formació de preus. En absència de mercat competitiu, aleshores cal pensar més aviat en mecanismes d'assignació adhoc, subhastes i preus de transferència interns. Per tant el que diuen a l'article cal considerar-ho com una primera aportació. Ells mateixos assenyalen que no resoldran teòricament l'aportació de valor en la combinació diagnòstic-teràpia. I per aquest motiu que cal seguir refinant l'anàlisi.

PS. Llegeixo a les comunicacions AES, frases com aquesta:  "La introducción de tests genéticos en el tratamiento de pacientes con cáncer de mama es una opción eficiente". O aquesta altra: "El extra coste del test genético se ve compensado con ahorros potenciales de la reducción de eventos coronarios en pacientes
de alto riesgo no identificados con el método estándar". I només em pregunto sobre el que significa realment,  si té sentit i res més, i aquí ho deixo.

PS. Un gran record per un dels grans emprenedors del país: Josep Maria Rubiralta. va saber situar la seva empresa entre les 10 més grans del món en diagnòstic. El seu llegat ens ensenya que la capacitat d'innovació i adaptació esdevenen la clau de l'èxit.

PS. Quan en un país hi ha un jutge que per 60.000 euros deixa anar a tres presos i no passa res, i quan en un país el president del tribunal suprem utilitza fons públics per al seu ús de cap de setmana i es considera que no hi ha intenció d'ús inapropiat, és una confirmació de la inseguretat jurídica de la que n'he parlat en diverses ocasions.

PS. A la King's Fund trobareu informació sobre com va anar l'International Integrated Care Summit.

PS. Avui és el dia que ens informen que l'any que ve també hi haurà recessió, i fins quan?

Preus raonables per a rics i pobres

Setting Cost-Effectiveness Thresholds As A Means To Achieve Appropriate Drug Prices In Rich And Poor Countries 

Sempre ens molesta que ens aixequin la camisa. Volem pagar un preu que es relacioni amb el valor que ens aporta i que sigui fruit de la lliure disponibilitat a pagar de cadascú. Però, això sabem que no és del tot així en molts mercats, hi ha problemes de tota mena i el més important el d'informació. Quan estem assegurats desapareix la barrera del preu i aleshores són les asseguradores públiques i privades que compren per nosaltres. A elles tampoc els interessa que els aixequin la camisa, però alhora volen garantir accés. I ja hi som. Com fer-ho?
La Patricia Danzon, Adrian Towse i  l'Andrew Mulcahy analitzen què està passant al món amb els preus dels medicaments i fan una proposta a HA (finançada per Lilly). Transcric un paràgraf clau:

Examining drug pricing, we found that in rich countries, insurance coverage can make consumers insensitive to price, which means that manufacturers' prices are largely unrestrained unless payers intervene. In middle- and low-income countries, where most consumers pay for drugs out of pocket, we found that the poorest countries face the highest prices, relative to their mean per capita income. We recommend that countries and payers set their own cost-effectiveness thresholds to reflect how much they are willing to pay for "health gain"-in other words, for a measured improvement in the health of a person or a population. Adopting this approach broadly should lead to appropriate price differences across and within countries, benefiting consumers and manufacturers alike.

A l'interior de l'article veureu l'èmfasi en un llindar cost-efectivitat per tal de fixar preus. Bé, aquest és un tema complicat. Crec que ens cal tenir-ho present però no sé si la seva aplicació ha de ser totalment prescriptiva o si cal que sigui només indicativa. Les febleses metodològiques d'aquest llindar són conegudes i cal anar en compte. Per tant, ens convé mesurar el valor que aporten els medicaments, i relacionar-ho amb el preu, però també cal tocar de peus a terra i admetre les limitacions.

PS. Salaris raonables per a docents universitaris. La decisió de reduir un 44% el sou als professors associats és molt més que el 5% que s'ha reduit als metges de la sanitat pública. És això una reducció salarial raonable?. Ho deixo dit aquí i qui ho vulgui llegir pot consultar LV. La mesura és per avui, l'impacte serà a llarg temini.

PS. La festa s'ha acabat però hi ha elements que encara volen continuar ballant amb els nostres impostos i els polítics els ajuden. Un altre exemple, la venda de la CAM

Raonable i necessari

Aquesta vegada el Journal of Economic Perspectives ve carregat de valent. Molts temes d'interès relacionats amb la salut.
Avui em referiré a l'article d'en Chandra, Jena i Skinner sobre efectivitat comparada. El text s'ha de llegir sencer i destacaria l'elevada expectativa que dispositen en l'avaluació de l'efectivitat comparada malgrat no hi hagi cost-efectivitat. Comparteixo totalment la seva perspectiva.
Aquesta és la seva posició:

We argue that comparative effectiveness research still holds promise. First, it sidesteps one problem facing cost-effectiveness analysis—the widespread political resistance to the idea of using prices in health care. Such resistance is not just from political interest groups, but also from voters, who even in lab settings often dislike rationing based on cost effectiveness (Nord, Richardson, Street, Kuhse, and Singer, 1995). Second, there is little or no evidence on comparative effectiveness for a vast array of treatments: for example, we don’t know whether proton-beam therapy, a very expensive treatment for prostate cancer (which requires building a cyclotron and a facility the size of a football fifi eld) offers any advantage over conventional approaches. Most drug studies compare new drugs to placebos, rather than “headto- head” with other drugs on the market, leaving a vacuum as to which drug works best (Nathan, 2010). Simply knowing what works and what doesn’t will improve productive effifi ciency by shedding medical practices that are unsafe at any price.

Aquí no tenim ni això encara que la llei tímidament demana avaluar utilitat terapèutica i ningú es preocupa per ara d'aplicar-la. Cal trobar un patró per mesurar aquelles prestacions que són raonables i necessàries.