All the drugs we have ever invented and will ever invent are more useful than we can know today. We are always discovering new uses. There are those who give this no thought (to the detriment of patients), those who strive to value this phenomenon, & some who are alive b/c of it!
I recently read a fascinating interview published by @endpts with physician/patient @DavidFajgenbaum, who discovered treatment for his own #castlemandisease with support of @ChanZuckerberg. It was a once novel, now generic transplant drug. endpts.com/sp/lessons-for…
The ability to do more with all we have invented, including many drugs whose mortgages we have paid off & which are now inexpensive generics, is not factored into the way health economists at organizations like @icer_review value drugs. That’s a problem I explored here:
Turns out economists (@JulianReif et al) @nberpubs have quantified that oversight, pointing out that omitting this “insurance value of medical innovation”, as conventional methods do, has resulted in ICER underestimating value of drugs by 30-80%. nber.org/papers/w21015
So if conventional cost effectiveness analysis (CEA) says that a $60k drug doesn’t offer enough value to be cost effective at that price & really should be under $30k, then factoring in missing “insurance value” could reverse the judgment & declare the drug cost effective.
But that’s not the only oversight. Economists (including same as above) have also pointed out that @icer_review’s failure to factor in that drugs go generic overestimates their cost to society by 40-75%.
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The long term value of our generic drug mountain, a vast armamentarium, & our need to appreciate it before we slow/cease its expansion w/price controls, is one of the central points of my book: amazon.com/dp/1733058915/
Making sure all drugs go generic is how we get a ton of currently unappreciated value from them. It’s the price control we’ve long had & all we need. For some complex drugs, we’ll need a novel regulation that I discuss in the book and other writings (contractual genericization).
The other key point in my book is that we need to reform insurance & expand it to all Americans so the modest 1.3% of GDP ($271B) that funds the drug industry is spread over a working, healthy population. The $61B paid out of pocket by the sick is too much for many, it’s clear.
But $61B is modest for a country as wealthy as America. We spend $800B on just healthcare paperwork. Even the Congressional Budget Office @USCBO has found that making drugs more affordable by lowering OOP costs would save Medicare more $ by preventing ER visits & other services.
The point is drugs don’t have to be unaffordable to Americans or really anyone in the world. The cost of keeping the biotechnology industry seeded with ideas from basic science (thank u @NIH) & fueled to develop those ideas and its own into drugs is tiny...
...& the value is much greater than appreciated by myopic health economists beloved by Congress. We should be guided by our hearts & broader-minded economists in tackling sustained affordability. If you follow me, there’s a good chance that you already know this... but...
I’m disappointed that there is so little understanding and coverage of these concepts in our national media, whether @WSJ, @TheEconomist, @washingtonpost, etc. These concepts should be taught in school, certainly American ones.
Biomedical innovation is an American export. We’re awesome at it & our inventiveness in this field has not yet been exported or ceded to other countries, though China is making admirable strides. As patients, it should be all the same to us who invents our treatments and cures.
I’ll be eternally grateful to anyone who helps me keep my kids healthy. I bet every member of Congress would share that sentiment. But why can’t America remain a leader in biotech & make countries compete with us...
...instead of throttling ourselves back with price controls to achieve affordability that could have been solved with insurance reforms? We’re smarter than price controls, and you might be able to steer America to a better way. What can you do?
If you know Washington staffers, send this to them. If you know members of Congress, print this out for them. If you know CBO folks, give them the papers I linked to. If you teach a course on biotech, have your students read my book to immunize them against facile arguments.
If you know patients who can’t afford medicines, refer them to patient assistance programs online for drugs they need. That can help until Congress passes needed reforms. If you are a scientists, especially @NIH, stand up to tell (write!) Congress that you don’t make drugs...
...you prove concepts that then require a thriving industry to turn them into actual medicines. Thank you to my colleague Jessica Sagers for calling scientists to that action. timmermanreport.com/2020/02/as-a-s…
If you are in insurance, don’t fight out-of-pocket reforms. And if you are in the biotech industry, know that you are doing some of the most important work on earth. Hopefully you’ll be so lucky as to hear patients tell you that and maybe they will also tell Congress.
