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Economics & the Drugs Debate

R.M.B. Senanayake is an esteemed friend from whose knowledge of economics I derive edification from time to time. Although he probably disagrees with the "economic interpretation of human history", the perspective he brings to bear on the drugs debate is essentially an economic one. I suspect that the science of economics is even less precise and more controversial than the science of medicine. As evidence of this I cite the fact that Sir Winston Churchill once complained that when he asks England’s six leading economists a question he gets seven answers – two from Mr. Keynes. In the 18th century Adam Smith, whose brand of laisser faire economics RMBS seems to favor, advocated that anyone should be free to practise medicine. He said that it should be left to the consumer to judge who is or who isn’t a good doctor. It must be from some such perspective that RMBS made his contribution to the debate. Ominously, he titled it: "Playing with the health of patients…" (The Island 1 April).

Information Gap

RMBS refers to what economists call "the asymmetric information gap" about medical matters that exist between a doctor and a patient. What is the consequence of this gap? His answer is this: "So the patient is in no position to decide between generic and branded drugs. He will have to depend on his doctor. By insisting on generics alone the government will be interfering in a situation where it thinks that it has better knowledge than the doctor".

Myth about R & D

Next, basing himself on information "culled from a medical website" (unspecified) RMBS says that typically a drug company has to invest about US$ 800 million in Research and Development to produce a "brand name drug" and that it has to recoup its investment during the limited patent period of the drug. The implication is that the exorbitant prices of branded drugs are justified.

Essentials

Boiled down to its essentials, RMBS has made three points.

1. The doctor (necessarily) knows more about drugs than the patient.

2. The government (necessarily) knows less about drugs than the doctor.

3. Typically, because the R&D costs of a branded drug amount to about US$ 800 million, branded drugs must (necessarily) be more expensive than generics in order to recoup the huge investment during the limited patent period of the drug.

Responses

I will respond to each of these points in turn and welcome refutations from anyone because I know that I don’t have all the practical answers to the questions raised in this complex and confusing debate.

As to RMBS’s first point, it is not necessarily true that every practising doctor knows more about drugs than every patient. If the patient himself happens to be a clinical pharmacologist or a highly qualified pharmacist, they are definitely more knowledgeable about drugs than the average practising doctor (often tutored only by smartly dressed drug peddlers). What RMBS must realize is that in modern scientific medicine "practising doctors" are expected to practise medicine strictly according to what is set forth in current standard text-books. These are written by teams of competent, research oriented specialists. Gone are the days when a doctor could say, "I know what is best for my patient" and expect a court of law to accept that doctrine as an unarguable defence of his practise if things go wrong. Fortunately things don’t go wrong very often because as the distinguished pharmacologist J.H. Gaddum, (Prof. Bibile’s PhD mentor in the University of Edinburgh) insightfully said, "Patients may recover in spite of drugs or because of them".

"Kept" Doctors

Although the "consumer" is in no position to judge who is or who isn’t a good doctor nowadays, it is neither necessary nor even desirable for the public to depend entirely on the doctor when it comes to a choice between generics and branded drugs. After all, the doctor may well be one who is -- in Gamini Seneviratne’s devastatingly accurate characterization – "kept" by drug companies to prescribe their brands. RMBS may care to know what a standard text-book of Clinical Pharmacology has to say about the public in this matter: "It is unreasonable to expect the public to trust the medical profession (in collaboration with the pharmaceutical industry) to the extent of leaving to them all drug matters",(Clinical Pharmacology by P.N. Bennett & M.J. Brown; 9th edition, page 8). Thus, RMBS’s stance of depending solely on his doctor in the choice of medicinal drugs is a cop-out unworthy of a person of his intellectual sophistication. He should remember that he no Simple Simon.

"The Government"

RMBS’s assertion that "the government" necessarily knows less about drugs than the doctor is, I fear, based more on ideology than on a detailed examination of what is meant by "the government" in this context. As it happens the government’s view on medicinal drugs in the context of Sri Lanka is based on the facts and opinions supplied by the best qualified professionals and other relevant stakeholders in the country. The third and latest revision (October 2006) of the List of Essential Medicines (all listed by their generic names) has been compiled by a team of over 30 experts including professors of pharmacology and representatives of some 18 professional colleges and associations. So when RMBS categorically declares that "the government" knows less about medicinal drugs than his doctor, he does not know what he is really doing. May I tell my friend that he is therefore entitled to forgiveness in accordance with what Jesus Christ said on the cross: "Father forgive them for they do not know what they are doing".

Truth about R&D

Concerning the costs of research of R&D, RMBS appears to have swallowed, hook, line and sinker what he has culled from an unspecified website. On this matter I should like to refer readers to the authority of Dr. Marcia Angell, MD (who is not a Bibile acolyte or an unrepentant Samasamajist). In the introduction to her book called "The Truth About the Drug Companies" published in 2004, she makes three startling points.

"First, R&D is a relatively small part of the budgets of the big drug companies – dwarfed by their vast expenditures for marketing and administration… The prices drug companies charge have little relationship to the costs of making the drugs and could be cut dramatically without coming anywhere close to threatening R&D.

Second, the pharmaceutical industry is not especially innovative… Only a handful of truly important drugs have been brought to the market in recent years, and they were mostly based on tax-payer funded research…

Third, the industry is hardly a model of American free enterprise. To be sure it is free to decide which drugs to develop… and it is free to price them as high as the traffic will bear, but it is utterly dependent on government granted monopolies."

Rotten

I know RMBS as a man whose thinking is both evidence-based and informed by ethical considerations. So let me focus his attention once again on some facts citedduring this debate by Dr. K. Balasubramaniam in The Island of 25 Feb 2008. He pointed out that in our country about 50% of outdoor patients are treated in the state sector and 50% in the private sector. By and large the same specialists treat both groups and the outcomes are much the same. In 2002 the cost of medicines for outdoor patients in the state sector which uses SPC drugs was Rs. 516 million; in the private sector it was Rs. 16,882 million. Thus, to obtain a similar outcome in the private sector, by the same specialists, it cost about 33 times more. We can all surely see how much more it cost in foreign exchange in the private sector to humor the geese which lay the golden eggs for drug companies. The ethical economist in RMBS must perforce admit that this is no laughing matter, and that something is rotten in the state of medicinal drug use in Sri Lanka.

Carlo Fonseka

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