Tag Archives: FDA

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MILE / U.S. Transhumanist Party Interview with Ira Pastor of Bioquark, Inc.

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The New Renaissance Hat

G. Stolyarov II

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Gennady Stolyarov II, Chairman of the U.S. Transhumanist Party, was honored to interview entrepreneur and pharmaceutical industry veteran Ira Pastor for MILE – the Movement for Indefinite Life Extension – the U.S. Transhumanist Party, and the Nevada Transhumanist Party. The hour-long conversation delved into a variety of interrelated subject areas, including regeneration and repair mechanisms in animals, potential applications in humans, development of substances and treatments that could achieve victories against diseases and lead to longer lifespans, political and regulatory implications for the development of such substances, the importance of awareness of this research within the broader society, and even a “moonshot” project called ReAnima for repairing traumatic injury to organs and tissues that would otherwise cause irreversible death in accident victims.

This interview took place on Saturday, February 11, 2017, at 10 a.m. U.S. Pacific Time.

Read about Bioquark here.

Read about Mr. Pastor here.

Join the U.S. Transhumanist Party for free here.

Visit and like the MILE – Movement for Indefinite Life Extension – Facebook page here.

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Discussion on Life-Extension Advocacy – G. Stolyarov II Answers Audience Questions

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Categories: Philosophy, Transhumanism, Tags: , , , , , , , , , , , , , , , , ,

The New Renaissance Hat

G. Stolyarov II

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Gennady Stolyarov II, Chairman of the U.S. Transhumanist Party, answers audience questions regarding life-extension advocacy and possibilities for broadening the reach of transhumanist and life-extensionist ideas.

While we were unable to get into contact with our intended guest, Chris Monteiro, we were nonetheless able to have a productive, wide-ranging discussion that addressed many areas of emerging technologies, as well as trends in societal attitudes towards them and related issues of cosmopolitanism, ideology, and the need for a new comprehensive philosophical paradigm of transmodernism or hypermodernism that would build off of the legacy of the 18th-century Age of Enlightenment.

Become a member of the U.S. Transhumanist Party for free. Apply here.

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Horror: Pirate Contacts Lenses! – Article by Andrew Quinlan

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Categories: Economics, Politics, Science, Tags: , , , , , , , , , , , , ,

The New Renaissance Hat
Andrew Quinlan
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This Halloween, scores of consumers have purchased nearly 100,000 pairs of “counterfeit, illegal, and unapproved” colored contacts for costumes, all of which have been seized by “Double Vision,” an FDA-led consumer safety campaign.

Not surprisingly, optometrists and their favored lens manufacturers like Johnson & Johnson are using this news hook as a means of inciting fear. They are now stepping on the gas of their congressional lobbying efforts so that their bill, The Contact Lens Consumer Health Protection Act (CLCHPA), is passed into law.

The CLCHPA’s objective is to rid the country of the free market reforms brought about by The Fairness in Contact Lens Consumer Act (FCLCA), a 2003 bill that opened the contacts lens industry to free market competition for the first time.

Before the passage of this bill, eye patients had virtually no rights, while optometrists had almost total control over the sale of contact lenses. Doctors were not obligated to give patients copies of their prescriptions. As a result, they could mandate specifically where patients were allowed to purchase lenses. This usually meant that consumers had no choice but to purchase Johnson & Johnson’s Acuvue lenses—eye doctors’ favored brand—directly from optometrists at inflated retail costs.

The Republican-controlled Congress’ 2003 FCLCA legislation stopped this government-created monopoly by enforcing consumer rights. It forced doctors to give patients copies of their prescriptions and gave them only an 8-hour window to file complaints regarding third-party sale requests, halting the process of “pocket vetoing” valid sales.

As a result, consumers were left with far more buying options. With barriers to entry significantly curtailed, third-party lens sellers like Walmart, Costco, and 1-800 Contacts had a much easier time selling contacts. This, in turn, led prices for contact lenses to spiral downward, allowing over 41 million Americans to purchase more than $7 billion worth of contact lenses every year.

Eye Safety?

Enraged, optometrist associations and contact lens vendors like Johnson & Johnson immediately began lobbying Congress to change the law. For the past decade, they have been claiming that these third-party vendors are jeopardizing the eye safety of millions of Americans. Specifically, they have expressed concern that these lenses pose a risk of developing keratitis, an eye infection affecting the cornea.

For these reasons, members of the medical lobby drafted the CLCHPA, a new bill that will greatly increase regulations in the contact lens industry, making it extremely difficult for third-party lens vendors to stay in business.

The bill is a solution in search of a problem. It will re-capture the contact lens industry and propel prices upwards, all while failing to increase safety even the slightest degree.

It is ridiculous that some doctors are correlating buying contact lenses from reputable third-party companies like Costco, Walmart, and 1-800 Contacts with purchasing them illegally from a Halloween street vendor.

For one, the lenses sold by third-party sellers are federally regulated. You still need a prescription to purchase contact lenses from online sellers (although numerous studies, as well as practices in other nations, have shown that even prescriptions are not necessary), and doctors still have the ability to strike down each sale if there is a legitimate health concern.  

In a letter written to the CLCHPA’s authors, Dr. Paul B. Donzis, a professor of ophthalmology at UCLA, made clear that buying contacts from online sellers poses no danger.  “Based on…authoritative scientific articles, it appears that online sales of contact lenses have not contributed to any increase in the incidence of contact lens related injury,” he said.

Moreover, the medical studies match the doctor’s rhetoric. A 20-year epidemiologic study conducted by Doctors  Schein, Stapleton, and Keay, published in 2007 by the medical journal Eye & Contact Lens, found that there has not been any increase in microbial keratitis since the online contact industry sprouted up and began providing more and better affordable choices for consumers.

The empirical data is as clear as day: no one is at risk from purchasing lenses from third-party contact lens vendors. The only risk that third-party vendors pose is to the market share of the crony medical lobby.

This Halloween, Congress should not be duped by the false claims coming from the mouths of the medical lobby. Congress is tricked often enough. This time, they should give American families a treat by reading through these prominent medical studies and striking down the anti-consumer Contact Lens Consumer Health Protection Act (CLCHPA) once and for all.

quinlan

Andrew Quinlan

Andrew F. Quinlan is co-founder and president of the Center for Freedom and Prosperity (@CFandP).

This article was originally published on FEE.org. Read the original article.

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One Bill Could Massively Improve Access to Lifesaving Drugs – Article by Alex Tabarrok

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Categories: Economics, Science, Tags: , , , , , , , , , ,

The New Renaissance HatAlex Tabarrok
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Reciprocity is an effective and common-sense idea

Senators Ted Cruz (R-Texas) and Mike Lee (R-Utah) have just introduced a bill that would implement an idea that I have long championed: making drugs, devices, and biologics that are approved in other developed countries also approved for sale in the United States.

Highlights of the “Reciprocity Ensures Streamlined Use of Lifesaving Treatments Act (S. 2388), or the RESULT Act,” include:

  • Amending the Food, Drug and Cosmetic Act to allow for reciprocal approval of drugs, devices and biologics from foreign sponsors in certain trusted, developed countries including EU member countries, Israel, Australia, Canada and Japan.
  • Encouraging the FDA to expeditiously review life-saving drug and device applications, this legislation would provide the FDA with a 30-day window to approve or deny a sponsor’s application….
  • The HHS Secretary is instructed to approve a drug, device or biologic if the FDA confirms the product is:
    • Lawfully approved for sale in one of the listed countries;
    • Not a banned device by current FDA standards;
    • There is a public health or unmet medical need for the product.
  • If a promising application for a life-saving drug is declined Congress is granted the authority to disapprove of a denied application and override an FDA decision with a majority vote via a joint resolution.

In explaining why he introduced the bill, Senator Cruz argued:

We continue to lose far too many of our loved ones to the “invisible graveyard,” as economist Alex Tabarrok has described: lives that could have been saved but for a bureaucratic barrier that rejects medical cures and innovation…

The bill I am introducing takes the first step to reverse this trend. It provides for reciprocal drug approval, so that cures and medical devices that are already approved in other countries can more expeditiously come to the U.S.

This post first appeared at Marginal Revolution.

Alex Tabarrok is a professor of economics at George Mason University. He blogs at Marginal Revolution with Tyler Cowen.

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Fast-Tracking Safe Drugs without Sacrificing Scientific Rigor – Article by Alex Tabarrok

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The New Renaissance HatAlex Tabarrok
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Here’s how to do it

In a post earlier this year, I noted that Japan has significantly liberalized its approval process for regenerative medicine. Writing in Forbes, Bart Madden and Nobelist Vernon Smith outline a similar proposal for the United States.

Recently, Japanese legislation has implemented the core Free To Choose Medicine (FTCM) principles of allowing not-yet-approved drugs to be sold after safety and early efficacy has been demonstrated; in addition, observational data gathered for up to seven years from initial launch will be used to determine if formal drug approval is granted. …

FTCM legislation in the U.S. would create a dual track system (see figure below) that preserves the existing FDA clinical trial process while offering patients an alternative. Patients, advised by their doctors, would be able to contract with a drug developer to use not-yet-approved drugs after Phase I safety trials are successfully completed and one or more Phase II trials have demonstrated continued safety and initial efficacy.

The resulting early access could make FTCM drugs available up to seven years before conventional FDA approval, which entails Phase III randomized control trials and a lengthy FDA review before the FDA makes an approval decision. …

bartgraph

The heart of the dual track system is the Tradeoff Evaluation Drug Database (TEDD) which would be available to the public through a government-supervised web portal. TEDD would contain all treatment results of FTCM drugs including patients’ health characteristics and relevant biomarkers, but no personal identification.

This open access database would be a treasure-trove of information to aid drug developers in making better R&D decisions consistent with fast-paced learning and innovation. …

Today’s world of accelerating medical advancements is ushering in an age of personalized medicine in which patients’ unique genetic makeup and biomarkers will increasingly lead to customized therapies in which samples are inherently small. This calls for a fast-learning, adaptable FTCM environment for generating new data.

In sharp contrast, the status quo FDA environment provides a yes/no approval decision based on statistical tests for an average patient, i.e., a one-size-fits-all drug approval process.

I hold the Bartley J. Madden Chair in Economics at the Mercatus Center, so I am biased, but this is an important proposal. Japan is leading the way and similar ideas are being discussed in Great Britain, but as the most important pharmaceutical market in the world, the United States has an outsize influence on world drug development. We need to lower costs and speed new drugs to market.

This post first appeared at Marginal Revolution.

Alex Tabarrok is a professor of economics at George Mason University. He blogs at Marginal Revolution with Tyler Cowen.

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Is the FDA Too Conservative or Too Aggressive? – Article by Alex Tabarrok

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The New Renaissance HatAlex Tabarrok
September 21, 2015
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I have long argued that the FDA has an incentive to delay the introduction of new drugs because approving a bad drug (Type I error) has more severe consequences for the FDA than does failing to approve a good drug (Type II error). In the former case at least some victims are identifiable and the New York Times writes stories about them and how they died because the FDA failed. In the latter case, when the FDA fails to approve a good drug, people die but the bodies are buried in an invisible graveyard.

In an excellent new paper (SSRN also here) Vahid Montazerhodjat and Andrew Lo use a Bayesian analysis to model the optimal tradeoff in clinical trials between sample size, Type I and Type II error. Failing to approve a good drug is more costly, for example, the more severe the disease. Thus, for a very serious disease, we might be willing to accept a greater Type I error in return for a lower Type II error. The number of people with the disease also matters. Holding severity constant, for example, the more people with the disease the more you want to increase sample size to reduce Type I error. All of these variables interact.

In an innovation the authors use the U.S. Burden of Disease Study to find the number of deaths and the disability severity caused by each major disease. Using this data they estimate the costs of failing to approve a good drug. Similarly, using data on the costs of adverse medical treatment they estimate the cost of approving a bad drug.

Putting all this together the authors find that the FDA is often dramatically too conservative:

…we show that the current standards of drug-approval are weighted more on avoiding a Type I error (approving ineffective therapies) rather than a Type II error (rejecting effective therapies). For example, the standard Type I error of 2.5% is too conservative for clinical trials of therapies for pancreatic cancer—a disease with a 5-year survival rate of 1% for stage IV patients (American Cancer Society estimate, last updated 3 February 2013). The BDA-optimal size for these clinical trials is 27.9%, reflecting the fact that, for these desperate patients, the cost of trying an ineffective drug is considerably less than the cost of not trying an effective one.

(The authors also find that the FDA is occasionally a little too aggressive but these errors are much smaller, for example, the authors find that for prostate cancer therapies the optimal significance level is 1.2% compared to a standard rule of 2.5%.)

The result is important especially because in a number of respects, Montazerhodjat and Lo underestimate the costs of FDA conservatism. Most importantly, the authors are optimizing at the clinical trial stage assuming that the supply of drugs available to be tested is fixed. Larger trials, however, are more expensive and the greater the expense of FDA trials the fewer new drugs will be developed. Thus, a conservative FDA reduces the flow of new drugs to be tested. In a sense, failing to approve a good drug has two costs, the opportunity cost of lives that could have been saved and the cost of reducing the incentive to invest in R&D. In contrast, approving a bad drug while still an error at least has the advantage of helping to incentivize R&D (similarly, a subsidy to R&D incentivizes R&D in a sense mostly by covering the costs of failed ventures).

The Montazerhodjat and Lo framework is also static, there is one test and then the story ends. In reality, drug approval has an interesting asymmetric dynamic. When a drug is approved for sale, testing doesn’t stop but moves into another stage, a combination of observational testing and sometimes more RCTs–this, after all, is how adverse events are discovered. Thus, Type I errors are corrected. On the other hand, for a drug that isn’t approved the story does end. With rare exceptions, Type II errors are never corrected. The Montazerhodjat and Lo framework could be interpreted as the reduced form of this dynamic process but it’s better to think about the dynamism explicitly because it suggests that approval can come in a range–for example, approval with a black label warning, approval with evidence grading and so forth. As these procedures tend to reduce the costs of Type I error they tend to increase the costs of FDA conservatism.

Montazerhodjat and Lo also don’t examine the implications of heterogeneity of preferences or of disease morbidity and mortality. Some people, for example, are severely disabled by diseases that on average aren’t very severe–the optimal tradeoff for these patients will be different than for the average patient. One size doesn’t fit all. In the standard framework it’s tough luck for these patients. But if the non-FDA reviewing apparatus (patients/physicians/hospitals/HMOs/USP/Consumer Reports and so forth) works relatively well, and this is debatable but my work on off-label prescribing suggests that it does, this weighs heavily in favor of relatively large samples but low thresholds for approval. What the FDA is really providing is information and we don’t need product bans to convey information. Thus, heterogeneity plus a reasonable effective post-testing choice process, mediates in favor of a Consumer Reports model for the FDA.

The bottom line, however, is that even without taking into account these further points, Montazerhodjat and Lo find that the FDA is far too conservative especially for severe diseases. FDA regulations may appear to be creating safe and effective drugs but they are also creating a deadly caution.

Hat tip: David Balan.

This post first appeared at Marginal Revolution.

Alex Tabarrok is a professor of economics at George Mason University. He blogs at Marginal Revolution with Tyler Cowen. 

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Japan Liberalizes Gene Therapy and Regenerative Medicine – Article by Alex Tabarrok

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The New Renaissance HatAlex Tabarrok
September 17, 2015
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Japan is liberalizing its approval process for regenerative medicine:

Regenerative medicines in Japan can now get conditional marketing approval based on results from mid-stage, or Phase II, human trials that demonstrate safety and probable efficacy.

Once lagging behind the United States and the European Union on approval times, there is now an approximately three-year trajectory for approvals, according to Frost’s Kumar. That compares with seven to 10 years before. …

Around the world, companies have also faced setbacks while pushing such treatments. In the U.S., Geron Corp., which started the first nation-approved trial of human embryonic stem cells, ended the program in 2011, citing research costs and regulatory complexities. …

While scientists globally have worked for years in this field, treatments have been slow to come to market. But there is hope in Japan that without the political red tape, promising therapies will emerge faster and there will be speedier rewards.

Japan is liberalizing because with their aging population treatments for diseases like Alzheimer’s and Parkinson’s disease are in high demand.

Under the new system, a firm with a gene or regenerative therapy (e.g. stem cells) can get conditional approval with a small trial. Conditional approval means that the firm will be able to sell its procedure while continuing to gather data on efficacy for a period of up to seven years. At the end of the seven-year period, the firm must either apply for final marketing approval or withdraw the product.

The system is thus similar to what Bart Madden proposed for pharmaceuticals in Free to Choose Medicine.*

Due to its size and lack of price controls, the US pharmaceutical market is the most lucrative pharmaceutical market in the world.

Unfortunately, this also means that the US FDA has an outsize influence on total world investment. The Japanese market is large enough, however, that a liberalized approval process if combined with a liberalized payment model could increase total world R&D.

Breakthroughs made in Japan will be available for the entire world so we should all applaud this important liberalization.

This post first appeared at Marginal Revolution.

* Editor’s note from the Foundation for Economic Education: There may well by a direct connection here. According to Madden, an early version of his proposal in Free to Choose Medicine was published in a booklet by the Heartland Institute, which was then translated and distributed in Japan by a Japanese free-market think tank.

For more on free markets in medicine, see Bart Madden’s article “The Pathway to Faster Cures” in the autumn print edition of the Freeman and on The Rational Argumentator.

Alex Tabarrok is a professor of economics at George Mason University. He blogs at Marginal Revolution with Tyler Cowen. 

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The Pathway to Faster Cures – When It Comes to Life-Saving Drugs, We Need More Than Modest Reform – Article by Bartley J. Madden

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The New Renaissance Hat
Bartley J. Madden
May 26, 2015
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Rob Donahue used to ride horses. He was a modern-day cowboy until he was stricken with amyotrophic lateral sclerosis (ALS). Now his muscles are weak. He can’t ride horses anymore. And his condition is worsening quickly. ALS will degenerate Donahue’s neurons and nervous system, and he will probably die in less than five years.

Another ALS sufferer, Nick Grillo, is trying to change all that. He’s put together a petition on Change.org to urge the FDA to fast-track approval of a new drug, GM-604, that would help people like Donahue and others like him.

“People can’t wait five, ten, 15 years for the clinical trial process,” said Grillo. “Things need to happen much quicker.”

But ALS is just one illness, and GM-604 is just one medicine. There are thousands of Americans suffering — many with terminal illnesses — while waiting on the FDA approval process.

Paradigm change

A paradigm change is essential because FDA culture has led to a situation where it costs an average of $1.5 billion and 12 or more years of clinical testing to bring a new drug to market. Medical innovation cannot thrive when only very large firms can afford to research and develop new drugs.

Another problem is that the FDA’s first goal is not to maximize innovation, but to minimize the chances that an FDA-approved drug leads to unanticipated adverse side effects and negative publicity. In particular, the FDA’s efficacy testing requirements have resulted in an ever-increasing load of money and time on drug developers. We can’t count on FDA bureaucrats to fix the broken system they created.

Even Congress, whose cottage industry is to regulate, admits that the current FDA system is a roadblock to fast-paced innovation. Congress’s own 21st Century Cures Initiative has led to many good ideas for delivering medical treatments, but even if successful, these ideas would bring only incremental improvements.

Americans deserve a bold plan to achieve genuine large-scale change enabling us to live longer, healthier, and more productive lives. And most importantly, we need a mechanism for allowing patients to exercise choice consistent with their own preferences for risk.

Congressional hearings: the missing seat at the table

The missing seat at the table is for someone who represents freedom — that is, the right of patients, advised by their doctors, to make informed decisions as to the use of not-yet-FDA-approved drugs.

Freedom in response to suffering and subjugation is a powerful rallying call. The Women’s Right to Vote constitutional amendment in 1920 and the Civil Rights Act of 1964 were not about incremental improvements; each was a paradigm change that brought forth a different and better future.

Absent from the congressional hearings over health care, however, has been a freedom agenda, specifically one designed to eliminate the FDA’s monopoly on access to new drugs.

Venture capitalists, where have you gone?

We hear very little about those who suffer and die because they were not able to access drugs stuck in the FDA’s testing pipeline, or about drugs that were never brought to market because FDA procedures made the development costs too high. There is an invisible graveyard filled with people who have died because of drug lag and drug loss.

The FDA’s deadly over-caution is why venture capitalists shy away from investing in biopharmaceutical startup firms. Venture capitalists are willing to take big risks on ideas that may fail. But failure due to regulatory risk is just too big a hurdle to overcome. Capital providers have other opportunities, even if those opportunities don’t involve cures for disease.

High costs and slow innovation are the hallmark of a monopoly. And, as medical science continues its rapid pace of innovation, the cost of lost opportunities for better health will increase even faster. The solution is to introduce consumer choice and competition.

Free to choose medicine

Three self-reinforcing principles are needed to bring rapid innovation to the biopharmaceutical marketplace.

First, we need a free-to-choose track that operates independently of the FDA and runs alongside the conventional FDA clinical testing track — a competitive alternative. After a new drug has successfully passed safety trials and shows initial effectiveness in early clinical trials, a drug developer could request that the drug be available for sale. Such an arrangement would allow for new drugs to be available up to seven years earlier than waiting for a final FDA approval decision.

Second, free-to-choose treatment results, including patients’ genetic data, would be posted on an open-access database. Patients and their physicians would be able to make informed decisions about the use of approved drugs versus not-yet-approved drugs. The resulting treasure trove of observational data would reveal, in real time on the Internet, which subsets of patients do extremely well or poorly using a particular new drug. This broad population of users — in contrast to the tight similarity of clinical trial patients — would better inform the biopharmaceutical industry, yielding better R&D decisions and faster innovation.

Third, some drug developers would want to provide free-to-choose drugs in order to quickly demonstrate that their drugs were effective, thereby enhancing the ability to raise needed capital. For patients who need insurance reimbursement and for developers seeking formal FDA recognition of their drugs’ safety and effectiveness, another kind of incentive is needed. That is, FDA observational approval would be based on treatment results reflected in observational data posted on the open-access Internet database.

In the foreword to my 2012 book, Free to Choose Medicine: Better Drugs Sooner at Lower Cost, Nobel Laureate economist Vernon Smith wrote, “These three design components for patient/doctor control of medical treatment are both innovative and soundly based. With this conceptual blueprint, legislation could be crafted to promote both expanded consumer choice and the discipline of choice to the long-term benefit of society.”

Opposition

FDA proponents would bolster the fear that “unsafe” drugs could flood the marketplace. But the FDA cannot define what is “safe.” Only patients with their unique health conditions, treatment profiles, and preferences for taking risk can define what is safe for them. That is what freedom is all about: individual choice. Keep in mind that the likely large number of free-to-choose patients with widely varying health conditions would yield uniquely useful safety data superior to safety readouts from clinical trial data.

The free-to-choose medicine plan is voluntary and would not disturb those who want to use only approved drugs. A reasonable implementation schedule would first allow the new system to be used by patients fighting a life-threatening illness, as they are the ones most in need of access to the latest drug advancements.

Biopharmaceutical firms likely to oppose such a plan would include larger firms who consider their expertise in dealing with the FDA bureaucracy as an especially valued competitive advantage over their smaller competitors. We should expect support from firms with a high level of scientific skill, but limited skill and resources in dealing with FDA bureaucracy. Nevertheless, even those firms initially opposed should question their current business models, which produce sky-high prescription drug prices and the very real chance that government at some future point will impose price controls. Why not set into motion an alternative that can lead to radically lower development and approval costs with concomitant lower prescription drug prices while maintaining industry profitability levels?

Trial lawyer organizations will be expected to contribute mightily to defeat any freedom-based legislation. They do not want Americans legally taking personal responsibility by way of voluntary contracts, even if there are life-saving benefits to be had.

Patients are the ultimate beneficiaries of competition, and they are a powerful force for those who want a fundamental restructuring of the FDA. Right-to-try state laws are designed to allow those dealing with life-threatening illnesses access to not-yet-approved drugs. These laws’ enormous popularity indicates that a well-run campaign could generate similar support at the federal level for free-to-choose medicine.

Freedom should be part of the national debate on 21st century medical legislation. For that to happen, we need to give freedom lovers and chronic sufferers a seat at the table.

Every American should have the right to make informed decisions that can improve health or save lives. Freedom is not something to fear; it is the best route forward to a more innovative, efficient, and humane medical system.

Bartley J. Madden is a founder of Tomorrow’s Cures Today.  His website is www.LearningWhatWorks.com.
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This article was originally published by The Foundation for Economic Education.

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Mr. Stolyarov Cited in The Heartland Institute’s Articles on E-Cigarettes, Medicaid Estate Recovery, and Doctors Withholding Treatment

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Categories: Announcements, Politics, Tags: , , , , , , , , , , , , , , , , ,

The New Renaissance Hat
G. Stolyarov II
May 17, 2015
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My remarks have been cited in three new articles from The Heartland Institute regarding health policy issues.

* FDA Moves to Regulate E-Cigarettes – Article by Matthew Glans

As a nonsmoker, I do not have any attraction to e-cigarettes, but I am opposed, on both moral and practical grounds, to any attempts to restrict them. This article by Matthew Glans cites my remarks with regard to recent FDA attempts to limit the availability of e-cigarettes to young people.

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Excerpt:

FDA’s push to regulate e-cigarettes may invite unintended health consequences, says Gennady Stolyarov, editor-in-chief of The Rational Argumentator. Although many nonsmokers have absolutely no attraction to e-cigs or tobacco products of any sort, for some individuals, e-cigs may work as a substitute for traditional tobacco products or as a part of a transitional approach toward the cessation of smoking.

E-cigs lack the high levels of more than 40 carcinogenic byproducts found in traditional tobacco smoke, and they also minimize the harm caused by secondhand smoke, says Stolyarov. If somebody wishes to smoke, it is better for that person’s health and the health of others if the person smokes an e-cigarette.

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* California Seizes Estates of Deceased Medicaid Patients – Article by Kenneth Artz

This article by Kenneth Artz cites my remarks in opposition to the Medi-Cal “estate recovery” program, whereby California Medicaid recipients’ homes can be expropriated from them upon their deaths.

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Excerpt:

Stolyarov says the estate recovery program is an example of an extremely hardhearted government program that forces people to suffer because of family members’ prior debts or health care needs.

“A person should not lose the family home because one of his or her deceased parents had little or no income and took recourse to Medicaid to pay for treatments for terminal cancer or another terrible disease,” Stolyarov said. “This is especially true given the fact most Medicaid recipients have no easy way of knowing their estates are put in jeopardy when they sign up for the program.”

This situation also sends a cautionary message about socialized health care arrangements purporting to provide “free” medical care, Stolyarov says.

“There is always a cost, and there are always strings attached when any aspect of health care is centrally planned,” said Stolyarov.

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* Dutch Doctors Withholding and Withdrawing Treatment from the Elderly – Article by Kenneth Artz

It is essential to treat all medical patients as human beings with decision-making autonomy, whose lives are worth living. In particular, a decision to shorten life by forgoing medical treatment should never be made by anyone except the patient him/herself. This article by Kenneth Artz cites my remarks regarding a recent study in the Journal of Medical Ethics is that withholding treatment from certain patients (particularly the elderly) appears to be becoming a default decision by doctors in the Netherlands in many cases – rather than a decision deliberately opted into by patients.

While people ought to have a right to voluntarily refuse medical treatment, it is also the case that they should have the right to insist on any and every measure that could possibly prolong their lives, even if their chances are remote. If a patient wishes to try a treatment that has a remote chance of succeeding, but where the alternative is a certain death, that patient’s desires should not be overridden by a central authority or even a medical expert.

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Excerpt:

It is extremely important to respect the liberty of patients to make choices regarding their medical care and the aggressiveness with which they want to fight for their lives, says Gennady Stolyarov, editor-in-chief of The Rational Argumentator.

“What is disturbing about the findings of this study is that withholding treatment from certain patients—particularly the elderly—appears to be becoming a default decision by doctors in many cases, rather than a decision deliberately opted into by patients,” Stolyarov said. “The culture of medicine should always be guided by the premise that taking action to save life is the default, and only the patient should be able to make a different decision.”

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Advancing Pharmaceutical and Medical Technology Does Not Depend on Patents – Article by Nathan Nicolaisen

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The New Renaissance Hat
Nathan Nicolaisen
January 1, 2014
Recommend this page.
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Pharmaceutical drug manufacturers are often regarded as the successes of the intellectual property regime. It is assumed that their willingness to take risks by investing heavily in R&D is justified by the awarding of patents over their lifesaving discoveries. Proponents of intellectual property claim that without patents many lifesaving drugs would not exist. They assert that generic drug manufacturers would diminish profit margins and dissipate the original manufacturer’s market share and innovation would come to a virtual standstill. Further, manufacturers once willing to create new drugs will no longer do so without sufficient returns on investment. Research into the matter suggests, however, that patent protection may not be required for medical advances.

Unpatented Medical Technologies

The notion that unpatented medical technologies are not feasible is historically false. Surveys of important medical breakthroughs provide insight into whether patents are absolutely necessary and conducive to innovation in medicine. In 2006, the British Medical Journal challenged its readership to submit a list of the most noteworthy medical and pharmaceutical inventions throughout history. The original list contained over 70 different discoveries before being narrowed down to 15. The list goes as follows in no particular order: penicillin, x-rays, tissue culture, ether anesthetic, chlorpromazine, public sanitation, germ theory, evidence-based medicine, vaccines, the pill, computers, oral rehydration therapy, DNA structure, monoclonal antibody technology, and smoking health risk. Of these discoveries, only two of them have remotely anything to do with patents, chlorpromazine and the pill.[1] In another survey conducted by the United States Centers for Disease Control the results are strikingly similar. Of the ten most important medical discoveries of the twentieth century, none of them had anything to do with patents.[2]

Natural Market Advantages and Trade Secrecy

Contrary to popular belief, large pharmaceutical companies may maintain significant market share advantages after the introduction of generics through the help of natural barriers to entry. Large pharmaceutical companies have a first-mover advantage and an established internal and external structure that competitors, large and small, do not. Regardless of how fast competitors can manufacture a generic drug (never mind the fact that they must hire new labor, train new employees, buy raw materials, establish suppliers, organize logistics, create a marketing and advertising plan, and set up competitive shelf space), it can be extremely difficult to make a dent in the market dominance of an already-established drug. Competition data from India suggests that it takes approximately four years for generic drugs to enter the market.[3] In addition, the Congressional Budget Office calculated that an original drug manufacturer could still maintain a market share of more than 20 percent after the introduction of generics. Expanding the scope of research beyond pharmaceutical drugs, a survey of R&D labs and company managers revealed that between 23 percent and 35 percent believe a patent is an effective way of getting a return on investment. At the same time 51 percent believe trade secrets to be an effective way of ensuring returns.[4]

The Truth about R&D Costs and Generic Drugs

Pharmaceutical drug manufacturers enjoy large margins in spite of large R&D. The claim that R&D for pharmaceuticals is high is not unfounded. The cost to bring a new drug to market varies between estimates of $402 million on the lower end and $800 million on the upper end.[5],[6] Regardless of high R&D costs, drug companies still command high margins. For the past two decades pharmaceutical drugs have been one of the most profitable industries in the United States, never dropping below third place.[7] The profitability of pharmaceuticals can be explained away under the assumption that people are living longer and consuming more pharmaceutical drugs. It may also be suggested that the human population is less healthy than in the past and the demand for pharmaceutical drugs is inelastic. But, analysis of the profit margin on pharmaceutical drugs and lack of any serious innovation suggests that this is not always the case.

The pharmaceutical industry globally maintains about a 25 percent operating margin as opposed to 15 percent for consumer goods. In the United States, this number achieved its zenith at almost 35 percent. The high margin on the drugs may not be due directly to high R&D costs, either. As of 2006, the ratio of R&D to sales revenue was about 0.19.[8] Further, the top 30 pharmaceutical firms in the world incur costs for promotions and advertising that are nearly double the costs of R&D. This is not to imply that there is a perfect amount of R&D spending each firm must do, rather it is to show that the inability to recoup R&D costs is greatly exaggerated.

Generic drugs are not just manufactured by small companies that seek to ride on the coattails of the giants. It is believed that generics add nothing innovative to the realm of lifesaving drugs, they merely manufacture competing drugs that are already in the public domain; the real innovation comes from the companies willing to invest in research and development. The National Institute of Health Care Management conducted a survey of drugs that received approval from the FDA from 1989 to 2000 with revealing results. Just over half the drugs in the survey, 54 percent, were using active ingredients that were already in use in the market. Of the drugs that were approved by the FDA, 23 percent were given a priority rating on the basis that they were a sufficient clinical improvement compared to existing alternatives. As a corollary, 77 percent of the approved drugs did not exhibit any kind of significant clinical improvement.[9] In other words, these drugs are functionally generic drugs, offering no kind of advantage over existing treatments. Large drug companies are ironically engaging in the kind of behavior they abhor by developing functionally generic drugs while wasting valuable R&D resources.

Conclusion

In a truly free market, whoever has the resources to manufacture an invention is permitted to do so, and the firms that enter the market first with a new drug enjoy a significant advantage. Moreover, the fact remains that the best way to protect an idea is to keep it a secret, which is why the trade-secret method remains effective. The federal government, however, has made it profitable to conclude that the best way to protect an idea is twisting the wrists and shoulders of one’s competitors with government force. Yet in spite of overwhelming federal-government intervention, innovation and ingenuity prevail, even if to a lesser degree.

Nathan Nicolaisen is a senior at Luther College in Decorah, Iowa studying business management and mathematics. 

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Notes

[1] This means that the inventions were not patented, due to some previous patent, or discovered out of desire to obtain a patent. Michele Boldrin and David K. Levine, Against Intellectual Monopoly, (Cambridge University Press, January 2010), 258, 259.

[2] ibid, 259.

[3] ibid, 266

[4] ibid, 186

[5] $402 million is in 2000 dollars. James Bessen and Michael J. Meurer, Of Patents and Property, Boston University Shool of Law, 2008), http://object.cato.org/sites/cato.org/files/serials/files/regulation/2008/11/v31n4-4.pdf

[6] $800 million is in 2000 dollars. Michele Boldrin and David K. Levine, Against Intellectual Monopoly, (Cambridge University Press, January 2010), 241.

[7] ibid, 256

[8] ibid, 255

[9] ibid, 261

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