Orphan Drugs--Posner's Response to Comments

An amazing number of comments, some however needlessly incivil. A very interesting comment suggests that, if seven years of exclusivity are enough to induce substantial expenditures on developing orphan drugs despite their small market, we should reexamine the need for the 20-year patent term. An even more radical possibility would be to jettison patent protection in favor of some variant of the Orphan Drug approach, a form of intellectual property protection that is much simpler than patent protection. But I recognize the force of the criticisms of the Act in the excellent comment by "SteveSC." Another comment asks whether the alternative uses to which resoiurces would be put if there were no Orphan Drug Act would contribute as much as or more than to social welfare; the commenter says that "it does not seem that a drug like Viagra is nearly as useful as say, one treating cancer." This proposition has great intuitive appeal, but it is (speaking of useful) useful to distinguish between the utilitarian and economic perspectives. Economists generally measure the welfare effects of a new product by willingness to pay rather than by subjective satisfaction (pleasure, happiness, freedom from pain, etc.). From that standpoint, a drug like Viagra that has a huge potential market might be more "valuable" than a drug that treated a cancer from which only a tiny number of people suffer. I am not suggesting that the economic criterion of welfare should be the only one employed by government. But I insist on the relevance of the economic perspective--and here I quote the commenter who said "It is in fact appropriate to ask--ad absurdum--whether an Act resulting in pharmaceutical companies spending billions to find a cure for a disease whose only victim were Bill Gates, instead of spending them on research that might benefit thousands of even millions of Americans, would in fact have negative benefits [for] the rest of us." No offense intended to Mr. Gates; it is nevertheless a worthwhile question.

Comments

[lincoln]

Professor Posner
I haven't read the comments for the orphan drugs and their patent protection yet,so please excuse me if these comments are redundant.First,re 'Viagra vs anti cancer drugs,I feel Americans are much more likely to spend money for wants vs. needs.(I realize that's not a profound statement,but patients feel extorted when they have to pay for medications;much more so than even gasoline.).It may be they feel they have no choice and that fuels their resentment.
Secondly,there has been literature for about 5 years about Viagra's use for toddlers with right sided heart failure.iIbelieve there was an article in the WSJ in late October about it.It literally is a life saver.(Of course,we were snickering about the effects of high dose Vigara when the males reach 12-13 years old .I don't know the trade name the sildenafil is marketed under when used for pediatric/cardiac purposes.
Finally,my thanks to you and your partner for having us as guests on your site.

[lincoln]

Judge Posner,
One more comment.There was a classic sci-fi short story encapsulating plague,economic and emotional costs and choosing between bad choices.Its title is "The Cold Equations".If you would like to read it,I'll send you a copy.and I'd recommend it to people who think there's always an easy answer..

[CH]

smart comment by Sylvain Galineau. nice to see some clear thinking in the comments section.

[Sylvain Galineau]

Actually, allow me one more on the relativity of rarity angle.

I believe we can safely assume that the Act's incentives do have limits. There could be, for instance, a patient population size under which its benefits will not induce the allocation of private R&D dollars. For the sake of argument, let's assume it is 50,000. If only 28 Americans share your pain, tough luck. One could imagine a succesful public campaign - one or two well-known and well-liked celebrity can do a lot - to expand its incentives to reach those diseases that affect 25,000 to 30,000 people. Later on, we might expand them further to reach another unserved population. And so on, until we reach our hypothetical Bill Gates Syndrome. At which point one can only wonder what is left for cancer, malaria, flu vaccines and the like.

Advocates of the Act will of course argue that providing incentives for private labs to research treatments for 'diseases of one' is neither their objective nor the Act's. Fair enough. It's only meant as a logical argument.

But I think that's where the dividing line in the debate resides in this debate, as in so many others. For any set of incentives, there is a point of diminishing return. Those who favor the Orphan Drug Act will, as a matter of course, assume that we have not reached it, passionately or even dismissively insisting we are not even close. Its opponents will of course assume, with no more evidence, that we are past it. The former can count on, and will use, the support of those who have benefited from the Act, in no small part to make the other side appear cold and heartless. The other guys will of course take pains to exploit the slightest anecdotal evidence of waste, dysfunction or corporeate favoritism to make them appear as pawns of a lobby. We are all familiar with the pattern, I think.

The rest of us, meanwhile, simply ask where the heck that point of diminishing return is. Of course, neither side wants anyone to ask. We don't know and therein lies their opportunity. The question ought to be asked nonetheless. Maybe there is no useful or practical answer. But that should be established by means other than rhetorical assertions and anecdotes, whether real or hypothetical.

[Sylvain Galineau]

(It's not 28, it's 28,000 - sorry)

[Sally J]

The question ought to be asked nonetheless. Maybe there is no useful or practical answer.

We know one thing for sure: without the Act, people die. Pretend that isn't true all you want.

[Sylvain Galineau]

Just like with the Act, other people may be dying who otherwise wouldn't, quite possibly in much larger numbers. You may also pretend they do not exist 'all you want'. Or maybe you happen to possess an innate understanding of who deserves to wait and die, and who gets help now. I don't. And I'm not sure the government does either; or that I would want them to make the call in these terms.

Be it as it may, that's still not the issue as I am arguing it. Americans shouldn't die with no help simply because the number of people who share their pain is a small proportion of the population. The opposite is true as well: they should not be neglected simply because it is less profitable to treat them than addressing a disease that affects a smaller number.

Neither option is attractive. Nor is the pretense by both parties to this kind of argument that their 'side' of the equation is the more noble one, as if that death was worth less than this other one by virtue of mere statistics. Are people with a deadly and incurable disease more deserving to die because their ailment affects a million instead of 100,000 ? Can this line of reasoning lead anywhere except a frustrating moral impasse ?

Such arguments will always be appealing to both sides for obvious reasons, and they will quite naturally attempt to steer the debate towards their own favorite emotional swamp. This approach is, however, unlikely to yield much except hot air. One would think this would be clear by now.

Some of us want to know how we can achieve an optimal balance between these competing and perfectly valid concerns, without getting embroiled into judging whose death is more important. That suggesting there might such a thing, or even asking how it could be found, is anathema to the most vocal partisans/opponents is perfectly obvious. Whether their displeasure is relevant or helpful in figuring out the answer is, as usual, not certain.

[Sally J]

Americans shouldn't die with no help simply because the number of people who share their pain is a small proportion of the population. The opposite is true as well: they should not be neglected simply because it is less profitable to treat them than addressing a disease that affects a smaller number.

There are no people on your side of the equation, because you have no proof any money would flow to anyone on the other side. You're simply making it up.

[ben]

Sally J

Posner argued money would flow to the other side, as you put it:

Resources for medical research are finite. The Orphan Drug Act sucks large research expenditures into creating treatments for rare diseases. Without the Act, those resources would be channeled by the market into other investments that might produce a higher social return. The English economist Arnold Plant pointed out many years ago that if the law protects some monopolies, as by granting patents or equivalent intellectual-property protection, the profit opportunities that such protection creates (Ceredase generates an estimated 25 percent annual rate of return on investment for its producer, Genzyme Corp.), which are not generally available in the economy, may attract into the monopoly markets resources that would produce greater consumer welfare if invested in production in competitive markets.

[logicnazi]

Thanks for your interesting comments on this issue Judge Posner. It is always refreshing to hear people who can talk about issues like this without getting caught up in ultimately harmful 'emotional swamps' as one commentator nicely put it.

Anyway I just wanted to defend Viagra from all those people who dismiss it as frivolous. Ultimately Viagra improves quality of life for those who take it no differently than medicine which alleviates chronic pain or other unpleasent but non-fatal conditions.

Unless one believes that those recieving government aid should only be given the minimum amount of money to eat nutritous gruel and shouldn't be allowed to purchase a twinkee or any kind of clothes besides a sack it is hard to see why it is okay to pay to increase quality of life here but not with Viagra. Ultimately the government and individuals make the choice every day to allow people to die in exchange for increased quality of life. Every TV that is bought, every dollar spent on morphine is a dollar not being used to save the poor in Africa. Government money spent on the arts of literature is government money that isn't being used to give someone the best availible medical care possible.

I don't think one can consistantly support our societal choices not to live a completely austere lifestyle and devot every availible resource to saving life unless one accepts that sometimes life needs to be traded off against quality of life. These deciscions don't seem to be controversial when quality of life comes in form of freedom from other types of disability (glasses, drugs to prevent hearing loss etc..) so why should they be such a big deal with Viagra? I submit that Viagra is just another way to improve quality of life and the public uncomfortability with it is more due to a lingering puritanical charachter than any reasoned position. If we are going to be objective about the matter I see no reason to regard Viagra as any different than morphine, a reasonable expense to increase quality of life.

[Sally J]

Without the Act, those resources would be channeled by the market into other investments that might produce a higher social return.

The above quote is Posner's, Sylvain: It is true money would go elsewhere. The point is it could go to government pork and private-sector porn, i.e., investments with a lower social return. There is no proof it would flow to other disease research, i.e., investements with a higher social return, as you claim. So: we know that if it flows elsewhere those who benefit from the Act will be harmed; and we have no guarantees of any benefits from the money flowing in the opposite direction. That is a certain loss, e.g., peopel with Guacher's who die, in exchange for nothing else but risk. Your support gambling with people's lives, and you don't even realize it.

[ben]

Sally

Proof is the wrong standard for policymaking because, given any uncertainty, that standard supports the status quo no matter what it is or how inferior compared with alternatives.

Further, you are gambling with people's lives with or without the Act. There are unseen thousands or millions of patients that may have been treated under alternative policy settings.

Obviously, these are difficult choices for policy makers, but the approaches you have advocated for thinking about whether current policy settings are optimal are at best unhelpful.

[Sally J]

Proof is the wrong standard for policymaking because, given any uncertainty, that standard supports the status quo no matter what it is or how inferior compared with alternatives.

Why does that make it the wrong standard? You are rejecting conservatism out of hand. Cannot government be conservative? Isn't it better to have gradual change as opposed to radical disruption? What is wrong with governnment having an inherent bias toward order, stability, and thus the status quo?

[Sally J]

Why is the conveniently ill-defined and negative-sounding 'pork' a more likely outcome than Health, Education, Social Security, Medicare or Medicaid ?

This only proves the point that we don't know where the money will go if the Act is canceled, but we know exactly what it is doing right now. Right now it is saving lives. If we take it elsewhere, there is the risk it won't save lives, and the lives it was saving in the first place won't be saved. Such result is a guaranteed loss and nothing else but risk.

[Sally J]

We do not even need to argue about evidence here; the argument is patently absurd.

You only say you don't need any evidence because you don't have any evidence. You're presuming, which is a fallacy. You have no idea what will be done with the money.

[Sylvain Galineau]

Typo : Never mind that I was still not asking whether the Act achieves...Never mind that I was still not asking whether the Act should be repealed yet...

Otherwise done.

[Sally J]

2. The Fire Department saves lives too. Yet no one suggests we should pay them whatever they want while schools crumble because disturbing the status quo might have consequences.

Actually, fire fighter's unions suggest this.

[Sally J]

The only reason Sally picked porn and pork instead of cancer drugs and Medicare - even though the latter are vastly more likely as spending alternatives - is that they make her argument appear much stronger than it is due to the very negative perceptions associated with both items.

The only reason you presume the reinvestment will be toward other drugs research is to manufacture wholesale the idea that other people who could be dying might be negatively impacted by the Act's continuance. My argument is mocking yours. You have no proof that would happen.

[Sally J]

Unspent research budget dollars never go to porn or anything outside the company. They are reallocated to other projects.

Never? Never? There are no phamarcuetical companies owned by parent companies with other investments outside of the pharamceutical industry? Are you stark raving mad?

[W]

Sylvain: That private research budgets will go to porn, or that federal money can only go to pork - when more than 98% of the budget is *not* pork - is typical of the fearmongering pressure groups routinely use.

This was actually one of my original points. It appears in the first post of mine that you attacked. My point was that no revocation of the ODA could go through precisely because of how it would be demagogued. I see you have finnaly grown so desperate as to fall back on my "worthless" argument.

[Sylvain Galineau]

W, I never argued with that part of your argument, nor did I ever deem it 'worthless' or anything else since I never argued with it. You know full well what our argument was about. Nice try.

[W]

I certainly know that it won't be invested in porn, I also know that the odds of some or all the public money involved being diverted on pork are no lower or higher than the for any other chunk of federal budget money i.e. less than 2%.

This is technically a fallacy. Even if only 2% of the budget is pork, you have no way of knowing that the monies from the ODA will be equitably distributed across the entire budget. All of the former ODA monies might go to the 2% of the budget that consists of pork. All of it might go toward good stuff, as well. There is no way to know. But there certainly is no guarantee that 98% of the ODA monies will go to good stuff and exactly 2% will go to pork. That IS a fallacy of presumption, Sylvain.

Sally is right.

[Sylvain Galineau]

Presuming that all or 98% of the money is more likely to be spent outside pork is not a fallacy; it's a perfectly reasonable assumption, given the facts.

Presuming, without one shred of evidence, that all ODA money will go to pork-barrel spending, is however, fallacious, biased and completely self-serving, given the obvious prejudice of the person making the argument.

Never mind that where the money might go is completely irrelevant to the topic at hand. This does not need to be established to argue the costs and benefits of the Act.

Interesting that you would fall into supporting the very demagoguery you alleged opposed earlier.

[W]

Presuming that all or 98% of the money is more likely to be spent outside pork is not a fallacy; it's a perfectly reasonable assumption, given the facts.

No, it isn't. It is a fallacy of presumption. Reasoning backwards from past facts is begging the question. The point is we don't know how the money will be distributed or where it will go. We do not know. You simply presume that away, which is a fallacy.

[W]

Presuming, without one shred of evidence, that all ODA money will go to pork-barrel spending, is however, fallacious, biased and completely self-serving, given the obvious prejudice of the person making the argument.

No one has done that. I made the argument that there is a 50/50 chance. It could go to pork, it might not. We don't know. So presuming that it will go somewhere good, so as to "manufacture" offsetting benefits to the repeal of the Act, is fallacious.