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Ben Domenech on Pharmaceutical Development

I hadn't realized that conservative blogger Ben Domenech worked at the Department of Health and Human Services during the Bush administration. But he did, and while there, he got a firsthand look at the role that the National Institute of Health, and the government more generally, plays in medical research. This topic is frequently distorted and oversimplified in the blogosphere, so his post is really worth a read.

By Ezra Klein  |  July 31, 2009; 10:26 AM ET
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hate to be pedantic but it's the National Institutes of Health, i.e. the middle word is plural.

check it (them) out:

Posted by: wapomadness | July 31, 2009 10:41 AM | Report abuse

OK, my head just exploded. Twice.

First explosion: when Ezra said "[Ben Domenech's] post is really worth a read."

Second explosion: when I clicked through, and damned if Ezra wasn't right. Domenech's post really IS worth a read.

This must be a sign of the approaching End Times.

Posted by: rt42 | July 31, 2009 10:50 AM | Report abuse

you know I came in here to bash Domenenech as I've seen him write some pretty god awful things but that article is spot on, Megan has absolutely no idea what she is talking about.

I do basic research at one of these fancy pants universities with a direct government grant. Half of my work is figuring out the mechanisms of disease, and the other half is designing high throughput screens to find relevant drugs for targeting said diseases. And if I'm successful, Pharma will swoop in and figure out how to make it useful for the largest amount of people. Which works really well! There is a very nice symbiotic relationship going on between the two.

And the thought that scientists cannot go back and forth is absurd, it happens all the time!

Posted by: slapshot57B | July 31, 2009 10:53 AM | Report abuse

There's a number of outdated stereotypes with this piece, which is common of pharma criticism, but most of those issues are not related to the question at hand.

The reality, is that they are making the same distinction, but ascribing different values to each half.

McArdles calls NIH/academic research "theoretical innovation," and pharma research "product innovation." Domenech calls the former "basic research," and the latter "productization research." They're making the same splits-- but arguing over which half provides the lion's share of innovation.

Both halves are necessary. My take? Let's get away from the "he said, she said" and put your money where your mouth is. Who does that? Licensing deals from the big pharma companies that happen every day of the week. Those NIH projects? They'll typically get $1-3 million plus a promise of royalties if a drug is really developed from their research. A drug that's gone through product development at a small biotech? That'll get a $10-50 million upfront with better royalty terms. Again, they both have value. In a simplified sense, the $1-3 million was generated from a simple idea, the $10-50 million was based on the $1-3 million idea. Innovation happens at both levels, in different ways. I'd have written Megan's piece differently (neither side really has a good neough understanding here), but the general point is directionally correct.

Perhaps more importantly, there's a much more sophisticated discussion on innovation versus price control happening in the UK as we speak. NICE, the model for rational drug pricing, is revisiting whether they are restricting innovation. The takeaway from their findings? Probably yes, which is why they have proposed loosening restrictions on cost-effectivess standards.

Posted by: wisewon | July 31, 2009 11:41 AM | Report abuse

Is that the same Ben Domenech that was fired from the Washington Post for plagiarism? I'm currently trying to get a job with the government. Did he put plagiarist on his resume when applying for the job? Did it help?

Posted by: flounder2 | July 31, 2009 11:54 AM | Report abuse

The takeaway here is that McArdle's piece was a shoddy piece of thinking that sounds reasonable on paper but is not supported by reality. Not unlike much of conservatism, actually.

Posted by: davestickler | July 31, 2009 12:13 PM | Report abuse

This is not on topic, but related:

Alan Sager of BU has spent his career studying drug companies. He has found that spend about 11% of their budget on R & D, about 19% on profit and about 34% on “marketing”. These are rough figures, and they vary from year to year.

Marketing has two purpose, one directed toward users and one directed towards physicians. Since physicians have the ultimate control (they write the prescriptions), the effort towards them is the larger.

Basically what they want patients to do is to get their physicians to prescribe drugs they do not need. Clearly physicians will prescribe drugs they need without marketing. This is the purpose of the odious ads we are bombarded with on TV, radio, and print media as well as in the mail and on the NET. When I was young, these were illegal and it is my understanding they could be made illegal again by act of Congress. Drug advertising to patients is illegal in all other countries except possibly New Zealand and Canada.

Drug marketing to physicians is enormous and multifaceted. The purpose here is to get physicians to use new expensive drugs in cases where older cheaper drug do as well if not better. Sometimes the newer drugs also have bad side effects that have not yet been discovered or have been concealed by the companies, e.g. Vioxx. It would take a book to examine all the techniques used by the companies. Let me mention some. There are the “pushers” that haunt doctors’ offices. One of my doctors requires them to give their spiel in the waiting room so I have been able to hear them twice. What is immediately obvious is that these people are totally unqualified. You can read about them here,

We could probably eliminate them by requiring they had some qualifications such as a degree in pharmacology, or biochemistry, or whatever.

The most scandalous techniques involve payments to physicians. The industry is constantly telling us the have reformed this practice which is the followed in a little while by news of yet more outrages. I’ll leave it at that except to recommend you read

which give you a good feeling for the morals of the drug companies.

It seems clear we could cut drug prices by a third by eliminating most of the money spent on marketing. This need not impact R & D or even their profit and would have a beneficial effect on the health care of the country. This would save about $100 Billion a year. In addition, there would be saving from the use of cheaper drugs and the elimination of unnecessary ones.

Posted by: lensch | July 31, 2009 12:34 PM | Report abuse

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