Healthy Skepticism Library item: 2590

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Rubin P.
The New England Journal of Medicine - To whom is it accountable?
2000 Jun 27;

Abstract:

Angell’s editorial is puzzling. 15 of the 20 cited references were from the popular press, only three from refereed professional journals. Angell criticizes excess promotional spending. The relative amounts spent on research and promotion are of little relevance to efficient resource allocation. Angell does not explain why this industry should be treated differently, nor does she suggest another way of providing information about drugs. “Me too” drugs often have reduced side effects or better dosing properties, and they provide the major competition for patented drugs. Angell recommends requiring manufacturers to demonstrate that new drugs are substantially better than anything available. This would extend the value of existing patents and increase prices. Angell claims the industry enjoys extraordinary protections and subsidies. One alleged benefit is “large tax breaks”, which all industries can deduct. Her proposal that some small fraction of revenue should be used for social purposes is a proposal for differential tax. If “social purposes” deserve public funding, normal tax revenues should be used. Another alleged “subsidy” is patent protection, but inventors of anything enjoy government-granted monopolies. Greater investment is deterred by the risk of massive government intervention. Polemics like Angell’s fuel this risk and increase prices. Anything that reduces earnings reduces R&D incentives and therefore new medicines. Angell’s claim that price controls would not “stifle innovation and frighten investors” is in never-never land. When Angell wants economic analysis, she should consult an economist.

Keywords:
*analysis regulation of promotion me toos patents subsidies price controls REGULATIONS, CODES, GUIDELINES: DIRECT GOVERNMENT REGULATION VOLUME OF AND EXPENDITURE ON PROMOTION