Ultimately returns in every industry tend towards zero. If we made it cheaper to develop new drugs it would extend the lifespan of the industry somewhat but not indefinitely. At some point diminishing returns take over and investment must go down.
The current regime in the USA didn't happen for nothing. It's well-known now that pharma companies had long been exploiting the file drawer effect and p-hacking to inflate the apparent safety and efficacy of their drugs in their FDA filings. The decision a couple decades ago to cut that off did dramatically reduce the rate at which drugs win approval, and that's a very good thing.
This provides what to me is compelling evidence that the efficacy requirement by the FDA is wasteful.
Amount of homeotherapy currently on the shelves bring "penalties imposed by the marketplace on sellers of ineffective drugs" into a sharp contrast... People will take pure water if you tell them it works.
EDIT: But I suppose a complex measure of: removing efficacy requirements AND banning advertising to both consumers and doctors AND mandating pre-regisration of trials might lead to more drugs on the market with companies using efficacy trials to compete with each other and doctors selecting best drugs based on cost/benefit/harm analysis.
I'm sure there are loopholes that would be promptly exploited in this scheme given enough incentive though.
To be fair, if you tell them it works, people will take pure water and show noticable improvments over non-treatment. Personally I just take the placebo effect directly though.
I often see vague complaints about the regulations, but no one seems to have specific suggestions about how to lower drug development costs while still protecting patients.
Specific suggestion: get rid of efficacy requirement, keep safety requirement. Let doctors decide what works, as they currently do for off-label uses just fine.
Less extreme are antibiotics which can also have bad side effects, but are useful drugs because they actually kill bacteria. If they did not, the side effects would be unacceptable.
Or should the government make that decision for on-label uses and doctors make that decision for off-label uses? That's the status quo. Whatever argument you have for one half of that is an argument against the other half.
This is exactly how doctors determine what works, with or without the government. See the off-label discussion in the link above.
I'm not suggesting that current regulation by the FDA isn't flawed, or that it doesn't need an overhaul, but I think it's clear that there should be some proof that efficacy studies were done before a drug becomes widely available, especially when the potential damage done by a failed treatment is so high. The current opioid crisis has completely eroded any faith that the pharmaceutical industry is capable or willing to regulate itself.
Tons of drugs have been approved, only to be later pulled off the shelves. So despite the massive cost, delays, etc. the process has failed at least 35 (!) times:
https://prescriptiondrugs.procon.org/fda-approved-prescripti...
If nobody is marketing, that definitely might increase return on capital.
If you pass a law banning drug marketing, you may be able to get the same health outcomes with less overhead. Of course, this ignores all the hypothetical cases where marketing helps, like increasing awareness of a beneficial treatment that was not previously well known.
This does not explain the increase in cost of insulin, which was invented in 1923.
It's newer formulations that are expensive, and those are still protected by patents.
> In the United Kingdom 1,000 iu costs the NHS £7.48, while in the United States this amount is about $134.00.
Perhaps the market is not designed for this sort of endeavor (drug research). Let government stand in where the market has failed.
Meanwhile, what has the government done? The trip from DC to New York on Amtrak is slower today than it was in 1960. In 1980, DC’s Metro had self driving trains. They had to shut that down in 2009 due to lack of maintenance and the unions. Spending on public education, adjusted for inflation, per student since 1960. But achievement hasn’t budged one inch. If the drug industry has failed, what words are in the English language for what the government has done?
Meanwhile, what has the government done?
Exactly that: "NIH funded the majority of support for HIV/AIDS, infectious disease and oncology research." https://www.thebalance.com/who-funds-biomedical-research-266...
The market works great until it doesn't. The interstate system, and the military are 2 prime examples where the market is never going to provide a solution. Affordable medical care for everyone is another.
As to municipal internet—its great until it’s not. Maryland has municipal cable systems that were built a couple of decades ago, and they have struggled to keep up with the DOCSIS upgrade treadmill. Additionally, what problems exist with broadband in the US are largely government created. Comcast has no data caps almost everywhere in Maryland, because it’s in competition with Verizon. The only place that’s not true is Baltimore—where the city legally prevented Verizon from coming in and competing with Comcast. Verizon wanted to wire up Baltimore—the city wouldn’t allow it to do so.
Speaking more generally, DC Metro was snazzy at first too, but was unable to maintain the system long term. It’s interesting you focus on the price point: is $50 sustainable? Charging too little is actually a big problem. A subway ticket in London can cost 2-3x as much as one in New York, despite the two systems being very similar in age and size. Unsurprisingly, the London subway is doing fine and the New York subway is falling apart.
I would posit that the only thing that is a bigger failure than the public school system, is the private school system.
It's numbers look good, but that's largely because private schools are more expensive, and also opt out of educating problem students.
serious question - does a profitable private passenger railroad company that actually owns/maintains tracks, stations, etc exist without subsidies anywhere at all in the world? And Amtrak itself is nominally public-private and was formed in reaction to purely private railroads collapsing..
> In 1980, DC’s Metro had self driving trains. They had to shut that down in 2009 due to lack of maintenance and the unions.
even if the trains were self driving, for the 10y or so I lived there before this, there was still a conductor, so not sure if this is really a good argument..
Hong Kong, Japan. But my point is narrower than that. I’m not saying governments in general cannot run decent train service. I’m saying Americans cannot. We’re culturally defective in that respect.
> even if the trains were self driving, for the 10y or so I lived there before this, there was still a conductor, so not sure if this is really a good argument..
They had a conductor for safety. But the self driving trains made the ride very smooth and allowed tighter headways. Even after 10 years, Metro conductors cannot properly stop at stations. To avoid overshooting the platform, they stop way short, and then jerkily inch into position. When I was growing up, headways on the orange line were 6 minutes and the WMATA trip planner was accurate. Today, it’s 8 minutes, because they can’t sustain the 6 minute headways. And they had to revise the trip planner a few years ago to increase the predicted travel time between stations. If you look at Metro advertising from the 1980s, station to station trip times today are 30-50% longer.
That's not to say there's on place for the private sector there, but there is massive friction between a profit motive in drug research and you know, building a more healthy society. See the "new Adderalls" like Vyvanse that offer no benefits over Adderall, but Adderall's patent is up so it can be made by generics and isn't as profitable anymore.
But again, market-based solutions are just not appropriate for essential health care. You would pay ANYTHING to not die - there's no price elasticity of demand.
Every other developed country has figured out that this is simply immoral.
Cost goes down with increased productivity. Competition sometimes brings that, sometimes it doesn't.
Economics can be complex!