Trade-offs between publicity and secrecy in drug regulation

Secret-Public Voting in FDA Advisory Committees
Secrecy and Publicity in Votes and Debates

Most of us can remember the withdrawal of antiinflamatory drug Vioxx in 2004. And some of us still wonder about the FDA responsibility and its experts committees on that sad affair.

Criticism reached a peak in February 2005 following the work of a committee set up to determine whether or not two of Pfizer’s anti-inflammation medicines, CelebrexR and BextraR , should remain on the market and whether Merck’s anti-inflammation drug VioxxR could be approved again for marketing. The vote – a close one, slightly in favor of the highly controversial BextraR and VioxxR – surprised the informed public and raised suspicions, leading The New York Times to commission a study on committee members’ financial ties. It turned out that ten members (out of thirty-two) had financial ties with one or more drug companies, most with Pfizer (Harris and Berenson 2005; CSPI 2005). As the critics saw it, this was a sign that advisory committees themselves, like FDA’s top management before them, had come under the influence of the drug industry.

After that, the FDA changed its rules for voting to simultaneous and visual methods rather than oral. This option avoids the anchoring effect of first voters. But secret voting was never contemplated.
This is exactly the issue that is addressed in a chapter of the book Secrecy and Publicity in Votes and Debates and now that everybody backs transparency, it's a good moment to stop and read this chapter at least.

So although public voting may be preferred because it allows external actors to monitor expert behavior, secret voting may appear desirable as a means of preventing conformism among experts. Thus, the value of the voting method may depend on of the audience considered: other voters or external actors. There is, however, one procedure that reconciles the benefits of publicity and secrecy, and that is to vote secretly but reveal who voted how after the vote count has been recorded. This method, used in Dominican monasteries in the thirteenth century in a process called the scrutinium (Gaudemet 1979, p. 326) and recommended by Bentham (1999, p. 106), may be termed, following Jon Elster (2013), “secret-public voting.”

 The FDA 2007 reform replaced public voting with secret-public voting, but it also  replaced oral voting, which left ample opportunity for individual members to express
themselves, with “manual” followed by digital voting, which precludes all such expression.

These statements prompt many questions about how our close advisory committees are taking decisions. I don' know any detail about it. And details are important, specially if there are lives at stake.

Clap your hands

This is exactly what we have to do after reaching 150.000 visits to this blog!. Thank you so much for your interest!

Today just listen to Parov Stelar: Clap your hands

Clap your hands!
And you swing out wide.
Stomp your feet!
You swing out wide.
Do a bump!
And you swing out wide.

Truck a little bit.
Beat it out and
make it!
Everybody's happy when they're doing the jive.



Platforms, a business model (2)

A long long time ago Michael Porter wrote Competitive Strategy a book that has been used as the bible of strategy.

Porter’s model identifies five forces that affect the strategic position of a particular business: the threat of new entrants to the market, the threat of substitute products or services, the bargaining power of customers, the bargaining power of suppliers, and the intensity of competitive rivalry in the industry. The goal of strategy is to control these five forces in such a way as to build a moat around the business and thereby render it unassailable.
Thus, when a firm can erect barriers to entry, it can keep competitors out, and entrants with substitute products cannot storm the castle. When a firm can subjugate suppliers, competition among them weakens their bargaining power so the firm can keep its costs low. When a firm can subjugate buyers by keeping them relatively small, disunited, and powerless, the firm can keep its prices high.
In this model, the firm maximizes profits by avoiding ruinous competition for itself but encouraging it for everyone else in the value chain. Advantage is found in industry structures that create a protective moat—one that enables the firm to segment markets, differentiate products, control resources, avoid price wars, and defend its profit margins.
For decades, companies have studied the five forces model and used it to guide their decisions about which markets to enter and exit, what mergers or acquisitions to consider, what sorts of product innovation to pursue, and what supply chain strategies to employ.

Now platforms add a new perspective,

Enter platforms. Many of the insights embodied in the five forces, resource-based, and hypercompetition models remain valid, but two new realities are now shaking up the world of strategy.
First, firms that understand how platforms work can now intentionally manipulate network effects to remake markets, not just respond to them. The implicit assumption in traditional business strategy that competition is a zero-sum game is far less applicable in the world of platforms. Rather than re-dividing a pie of more-or-less static size, platform businesses often grow the pie (as, for example, Amazon has done by innovating new models, such as self-publishing and publishing on demand, within the traditional book industry) or create an alternative pie that taps new markets and sources of supply (as Airbnb and Uber have done alongside the traditional hotel and taxi industries). Actively managing network effects changes the shape of markets rather than taking them as fixed.
Second, platforms turn businesses inside out, moving managerial influence from inside to outside the firm’s boundaries. Thus, a firm no longer needs to seize every new opportunity on its own; instead, it can pursue only the best opportunities while helping ecosystem partners seize the others, with all partners sharing the value they jointly create.13
These two new realities add a dramatic layer of complexity to business competition. Platform strategy resembles traditional strategy much the way three-dimensional chess resembles the traditional game.14 Within the ecosystem, the lead firm negotiates dynamic tradeoffs involving competition at three levels: platform against platform, platform against partner, and partner against partner.

These are excerpts from the book "Platform revolution" a must read if you want to understand what's going on in value creation in a connected world. In chapter 12 you'll find some comments on health sector, very succint and general.

A prescription for pharmaceutical expenditure, is there any one?

Pharmaceutical Expenditure And Policies

If you want to know what's going on in OECD countries on pharmaceuticals, just read this paper. The challenges are huge, and policy answers are delayed. My impression is that beyond the standard approach (the one in the paper), somebody should start talking about priorities for research and innovation according to health needs and potential benefit from recent advances in basic science. There is a need for a dialogue between firms and governments about it. Just a signaling game, saying how much are willing to pay for new innovations if they fit with health needs and potential benefit.

PS.Drug prices: Tweaking the formula excellent article in FT

Income and longevity, almost all you need to know

The Association Between Income and Life Expectancy in the United States, 2001-2014 

The estimates of impact of income on longevity are now available for US. And the results are clear. The summary of the article in 4 statements:

First, higher income was associated with greater longevity throughout the income distribution.The gap in life expectancy between the richest 1% and poorest 1% of individuals was 14.6years (95% CI, 14.4to 14.8years) for men and 10.1 years (95% CI,9.9 to 10.3 years) for women.

Second, inequality in life expectancy increased over time. Between 2001 and 2014, life expectancy increased by 2.34 years for men and 2.91 years for women in the top 5%of the income distribution, but by only 0.32 years for men and 0.04 years for women in the bottom 5%(P < .001 for the differences for both sexes).

Third, life expectancy for low-income individuals varied substantially across local areas. In the bottom income quartile, life expectancy differed by approximately 4.5 years between areas with the highest and lowest longevity.Changes in life expectancy between 2001 and 2014 ranged from gains of more than 4 years to losses of more than 2 years across areas.

Fourth, geographic differences in life expectancy for individuals in the lowest income quartile were significantly correlated with health behaviors such as smoking(r = −0.69,P < .001),but were not significantly correlated with access to medical care, physical environmental factors, income inequality, or labor market conditions. Life expectancy for low-income individuals was positively correlated with the local area fraction of immigrants (r = 0.72, P < .001), fraction of college graduates (r = 0.42, P < .001), and government expenditures (r = 0.57, P < .001). 

Differences are huge. Confronting the issue from a policy perspective is not that easy. Individual health behaviors are the key to understand what's going on.

PS. Inequality on income or wealth?. This could be the next article...

Josep Segú
Encants Nous, oli sobre tela, 80 × 220 cm

European health regulation on lab tests, the final round? (2)

Last week, Theranos clinical lab has received more bad news. Though the final resolution is still pending, all available informations raise concerns about the acuracy of such lab.Could this happen in Europe? My feeling is that the outdated and obsolete regulation could replicate the story.
In Europe, in vitro diagnostics regulation was decided 18 years ago!. The last proposal debated two years ago in the Parliament got no final agreement. I have explained the inefficiency of european parliament formerly. Health care safety and quality deserves better regulation and specially in lab tests.
Beyond safety issues, the value of lab tests require deeper assessment. Current proposals are not taking into account properly this issue. Now is the moment to introduce it in the final proposal, otherwise it will forgotten for the next two decades.

PS. Have a look at this article: A Systematic Review of Health Economic Evaluations of Diagnostic Biomarkers

Manhattan i Queens (Fragment), oli sobre tela, 60 × 150cm

Next week Josep Segú starts its exhibition at Sala Parés

Platforms, a business model

Platform scale

Platform Scale (n): Business scale powered by the ability to leverage and orchestrate a global connected ecosystem of producers and consumers toward efficient value creation and exchange.

The new hype on business models is around platforms. Well, this is not new, a decade ago David Evans wrote Catalyst Code but its impact was limited. Now "Platform scale" and "Platform revolution" are the two required business books. If you want to understand the economic foundations go to "Platform Economics".
The topic requires more elaboration than a post in a blog. How this trend affects health care in practice remains to be seen.

The Platform Manifesto
1. The ecosystem is the new warehouse
2. The ecosystem is also the new supply chain
3. The network effect is the new driver for scale
4. Data is the new dollar
5. Community management is the new human resources management
6. Liquidity management is the new inventory control
7. Curation and reputation are the new quality control
8. User journeys are the new sales funnels
9. Distribution is the new destination
10. Behavior design is the new loyalty program
11. Data science is the new business process optimization
12. Social feedback is the new sales commission
13. Algorithms are the new decision makers
14. Real-time customization is the new market research
15. Plug-and-play is the new business development
16. The invisible hand is the new iron fist

 The book