More and more medical journals are running articles by doctors on the cost of developing and using new drugs.
I have no idea if and how these articles are peer-reviewed. My guess is that they are not, otherwise the journals would not allow articles to be published that rely on discredited economic papers or authors or use a framework to measure cost and value that is questionable at best, shoddy at worst.
In my opinion such articles are written with a very clear agenda: attack drug prices as being too high because the cost of developing new drugs is in fact quite low and 2) because they offer very little clinical benefit compared to older medicines. I have no problem with articles that make that case. I do have a problem when the articles are intellectually and methodologically suspect. People trust medical doctors more than most other professionals. But that trust is abused when doctors pose as economists to further a political agenda.
There are four hallmarks of such pseudo-economic analysis. I will discuss each on in detail in separate blogs. Any article published in a peer-reviewed journal that contains these elements should be rejected if submitted, retracted if published. There is little difference between authors relying upon these methods or analyses and Andrew Wakefield who used similar approaches to conclude that a measles vaccine can cause autism.
1. Relying upon the one discredited source to make your case.
Best example is Hagop Kantarjian use of Donald LIght's assertion that it only costs 4 percent of what most studies have estimated as the cost of bringing a new chemical entity to market. Kantarjian claims it is only $25 million. That's based on an earlier estimate of drug development costs by Joseph DiMasi of $802 million per new chemical entity. Kantarjian has also co-authored articles with Light.
But Light's claim has been rejected by several studies that have shown studies asserting the cost of drug development is much lower than $2-6 billion are all flawed: " they inappropriately mix median values reported for individual drugs with what are mean values for the costs of clinical failures and preclinical fixed costs, and for which the concept of a median has no meaning; they misconstrue the nature of the corporate income tax and incorrectly consider manufacturing tax credits; they use discount rates that are meant for other contexts but that are inappropriate here; they treat line extension approvals as separate and independent units of observation alongside their original approvals; and they grossly misstate the meaning of and misuse figures in our paper on industry-reported data on expenditures on self-originated drugs, licensed-in drugs, and already-approved drugs.
In short, every one of Light and Warbuton's adjustments are invalid. Furthermore, two peer-reviewed papers by current and former FTC economists, also not cited by Light and Warburton, validate our work using other methods and public data (Adams and Brantner, 2006, 2010). They find that R&D costs are likely as high or higher than (DiMasi's) estimates." (See DiMasi JA, Hansen RW, Grabowski HG. Reply: Extraordinary claims require extraordinary evidence. Journal of Health Economics 2005;24(5):1034-1044. and DiMasi JA, Hansen RW, Grabowski HG. Reply: Setting the record straight on setting the record straight: response to the Light and Warburton rejoinder. Journal of Health Economics 2005;24(5):1049-1053.)
A prima facie analysis of Kantarjian's assertion suggests how absurd it is without having to waste time refuting it. If it only cost $25 million to bring a new drug to market why aren't hundreds of companies developing them. It costs up to $140 million to develop a hot new video game for XBox360 or P3 Playstation platforms. Yet the medical journals such as Blood publish these claims as if they were reliable. Why not continue to publish articles citing Andrew Wakefield's article claiming vaccines caused changes in the gut that caused autism??? Kantarjian uses Light like anti-vaxxers use Wakefield. The only difference is, Kantarjian gets published and Wakefield is discredited.
Tomorrow I will discuss the misuse and abuse of the assertion that cancer drug prices defy market forces because prices only go up, not down.