Recently, someone sent me a draft paper on this topic. My reaction is this.
1. I think that the default position of economists would be that while government may have a legitimate role in keeping unsafe drugs off the market, the best approach for dealing with ineffective drugs would be to help promote and disseminate research.
2. This default position is badly compromised, however, by the prevalence of third-party payments for medical treatment. Both government insurance programs and private insurance companies want clear guidance for when they can deny payment for a treatment. That implies that official government determination of the efficacy of treatments is going to be welcomed both by government programs and by private insurance companies. That in turn makes it difficult to extricate the FDA from ruling on efficacy.
I’m not sure about #1. Look at the supplements industry. Or the many cancer patients that are desperate enough to try a “treatment” that doesn’t work and has nasty side effects. Maybe if the marketing of these “treatments” were highly regulated…
If you thought proving efficacy was “challenging” and its costs (including the unseen) too high relative to its benefits, wait till most of the marginal value in medicine comes from personalized medicine…
It is my view that the arrival of personalization capabilities will push this forward. It simply won’t make any sense anymore (if it ever did) to label something “effective” or not.
There’s a place for a ruling, but I don’t see why a lack of efficacy should stop something that’s proven to be safe from being used at all. Even by a person who understands the risks, is paying their own money, and has consulted with a doctor.
Bear in mind that even in today’s medical sector, people can and do pay for unapproved treatments out of pocket. I would think the same should apply for drugs.
On the larger issue, technological progress requires trying things and seeing how they go. If something is safe, then people using it creatively is going to lead to lots of knowledge that the rest of us can benefit from.
Yeah. Effectiveness and cost-effectiveness should be handled separately.
Where personalized medicine comes in is that it is even crazier to say “this treatment isn’t cost effective because if we had to treat everyone with it then it would only be effective in a small identifiable percentage, thus it isn’t cost effective.”
How much of this allegedly crazy cost of cancer drugs is that the cost of the drug that they thought might be defrayed across X actually ends up having to be paid by X/Y?
You start out hoping that Avastin will treat breast cancer. It doesn’t do well in the trial. Turns out it is great for some brain cancers. Thus treating brain cancer with it is a lot per head, so to speak.
Cost effectiveness will drive this further by putting a value on them and if you can’t determine who might benefit from it, the value will be low. There will be as much interest in tests to determine benefit as treatments themselves. Blank checks will no longer be forthcoming.
Yeah, and this is a bad thing, at least to an extent, and maybe to a very large extent. To a first approximation, you never know who is going to benefit from a treatment.
There are kludges like paying for outcomes, but these are only kludges.