6 ms·

Obstacles to Developing Cost-Lowering Health Technology: The Inventor’s Dilemma

28 points by wormold 11y ago

angersock 11y ago
Oh dear christ. A lot of the medical devices that could actually help people are well within the ability of even a small team of undergrads to produce--and many do! It's the sheer fuckheadedry of the market and regulatory environment and capture of the FDA and insurers that basically make bringing anything to bear a tedious, hair-graying experience.
- WalterBright 11y ago
  You might like "Regulation of Pharmaceutical Innovation" by Sam Peltzman, who analyzes this effect with statistics.
- pinaceae 11y ago
  totally, who needs the FDA. a little thalidomide is good for you, nothing like untested and unproven stuff to shove into your veins. let's also abolish the FAA, air travel needs to be freed from the shackles of safety. because innovation and disruption and stuff.
  - angersock 11y ago
    How many things have you gotten through the FDA, friend? The fact is, and it's well-documented, that there are many scientifically unsubstantiated claims and procedures being done, that there is a vast paucity of decent software, that patients are being injured and maimed and killed and empoverished. And yet, there are these super-strict market-approval processes and weird regulatory requirements on where and how you can open hospitals (which is how they killed a lot of abortion clinics in Texas, by the way) and a cartel-enforced supply-shortage of trained physicians. Things are fucked. The interactions of the government and the not-quite-free-market have produced this sort of perverted and broken system.
hmahncke 11y ago
100% correct in my experience with medical device VCs.
worik 11y ago
FFS Solution 6: Nationalise the pharmaceutical industry and get health experts deciding priorities
- aswanson 11y ago
  Sure. Creating an even greater bureaucracy unanswerable only to themselves with guaranteed taxpayer cashflow is certain to produce pure innovation.
- davidw 11y ago
  Even in places like Italy with government paid health care, this does not happen. What does happen is that the health care system is in some ways a monopsony and thus has a lot of negotiating power.
wehadfun 11y ago
Here is article about the pain of dealing with Medical Industry [0] http://www.washingtonmonthly.com/features/2010/1007.blake.html http://www.washingtonmonthly.com/features/2010/1007.blake.ht...
ucha 11y ago
I like the example of the MI and stroke reducing polypill. However, if the only reason why this pill's not sold is because it delivers a low return on investment due to the high cost of the clinical trials, why aren't countries where medical research is less privatized stepping in? Surely, this miracle pill would be tested and ultimately sold in Cuba and some European countries with excellent medical facilities where the public sector shares a larger part in healthcare costs. What's preventing this?
- ams6110 11y ago
  Um, the high cost of the clinical trials is not due to privatized medical research. the cost of the large clinical trials required for FDA approval It is FDA regulations, not privatized medical R&D.
  - ucha 11y ago
    I didn't say that the cost was high because of private medical search. Only that a private pharmaceutical company will not want to have negative returns regardless of the origin of the costs.
    - a3n 11y ago
      Yes, a public good, which a country can decide to acquire and provide or not.
srunni 11y ago
> Although the polypill could produce substantial public health benefits, people in the United States are unlikely to find out anytime soon. This is because the pill’s price is so low (≤$1 per tablet) and the cost of the large clinical trials required for FDA approval is so high, it is unattractive to investors. Here are two great articles on this topic by Ben Roin of MIT: Unpatentable Drugs and the Standards of Patentability: http://dash.harvard.edu/bitstream/handle/1/10611775/Unpatentable%20Drugs%20and%20the%20Standards%20of%20Patentability%20-%202009.pdf http://dash.harvard.edu/bitstream/handle/1/10611775/Unpatent... Solving the Problem of New Uses: http://dash.harvard.edu/bitstream/handle/1/11189865/Solving%20the%20Problem%20of%20New%20Uses%20.pdf http://dash.harvard.edu/bitstream/handle/1/11189865/Solving%...
coldcode 11y ago
What were the drugs they wanted to combine?
shard 11y ago
If there's $300B in annual costs due to health care expenditures and lost productivity which can be reduced with a $1/day drug, it seems like the medical insurance industry should be very interested in such a drug. Is the medical insurance industry unable to carry out the research or pay a research lab to do the work? Or are there other reasons they don't do this kind of research?
- DougWebb 11y ago
  What makes you think the Medical Insurance Industry is interested in reducing medical costs? They benefit from higher costs. If medical costs were much lower, fewer people would need/want insurance. Premiums would have to be lowered, which means less cash coming into the insurance company, and claims would be fewer and/or smaller which means less cash flowing through the insurance company. Cashflow is where the insurance company makes its profit. The other profit center is captured premiums: money people pay in that they never get back out. The insurance company doesn't care how high your medical bills are or how much you wind up paying for them; the company only cares about reducing its share as much as possible. Lowering the overall cost doesn't alter the payment distribution, so the insurance company has no inventive to lower overall costs. If there was a pill you could take which would allow you to pay a larger proportion of your medical costs, without reducing your premiums, the insurance company would be all over it.

28 points by wormold 11y ago

Oh dear christ. A lot of the medical devices that could actually help people are well within the ability of even a small team of undergrads to produce--and many do! It's the sheer fuckheadedry of the market and regulatory environment and capture of the FDA and insurers that basically make bringing anything to bear a tedious, hair-graying experience.

WalterBright 11y ago
You might like "Regulation of Pharmaceutical Innovation" by Sam Peltzman, who analyzes this effect with statistics.
pinaceae 11y ago
totally, who needs the FDA. a little thalidomide is good for you, nothing like untested and unproven stuff to shove into your veins. let's also abolish the FAA, air travel needs to be freed from the shackles of safety. because innovation and disruption and stuff.
- angersock 11y ago
  How many things have you gotten through the FDA, friend? The fact is, and it's well-documented, that there are many scientifically unsubstantiated claims and procedures being done, that there is a vast paucity of decent software, that patients are being injured and maimed and killed and empoverished. And yet, there are these super-strict market-approval processes and weird regulatory requirements on where and how you can open hospitals (which is how they killed a lot of abortion clinics in Texas, by the way) and a cartel-enforced supply-shortage of trained physicians. Things are fucked. The interactions of the government and the not-quite-free-market have produced this sort of perverted and broken system.

hmahncke 11y ago

100% correct in my experience with medical device VCs.

worik 11y ago

FFS Solution 6: Nationalise the pharmaceutical industry and get health experts deciding priorities

aswanson 11y ago
Sure. Creating an even greater bureaucracy unanswerable only to themselves with guaranteed taxpayer cashflow is certain to produce pure innovation.
davidw 11y ago
Even in places like Italy with government paid health care, this does not happen. What does happen is that the health care system is in some ways a monopsony and thus has a lot of negotiating power.

wehadfun 11y ago

Here is article about the pain of dealing with Medical Industry [0] http://www.washingtonmonthly.com/features/2010/1007.blake.html http://www.washingtonmonthly.com/features/2010/1007.blake.ht...

ucha 11y ago

I like the example of the MI and stroke reducing polypill. However, if the only reason why this pill's not sold is because it delivers a low return on investment due to the high cost of the clinical trials, why aren't countries where medical research is less privatized stepping in? Surely, this miracle pill would be tested and ultimately sold in Cuba and some European countries with excellent medical facilities where the public sector shares a larger part in healthcare costs. What's preventing this?

ams6110 11y ago
Um, the high cost of the clinical trials is not due to privatized medical research. the cost of the large clinical trials required for FDA approval It is FDA regulations, not privatized medical R&D.
- ucha 11y ago
  I didn't say that the cost was high because of private medical search. Only that a private pharmaceutical company will not want to have negative returns regardless of the origin of the costs.
  - a3n 11y ago
    Yes, a public good, which a country can decide to acquire and provide or not.

srunni 11y ago

> Although the polypill could produce substantial public health benefits, people in the United States are unlikely to find out anytime soon. This is because the pill’s price is so low (≤$1 per tablet) and the cost of the large clinical trials required for FDA approval is so high, it is unattractive to investors. Here are two great articles on this topic by Ben Roin of MIT: Unpatentable Drugs and the Standards of Patentability: http://dash.harvard.edu/bitstream/handle/1/10611775/Unpatentable%20Drugs%20and%20the%20Standards%20of%20Patentability%20-%202009.pdf http://dash.harvard.edu/bitstream/handle/1/10611775/Unpatent... Solving the Problem of New Uses: http://dash.harvard.edu/bitstream/handle/1/11189865/Solving%20the%20Problem%20of%20New%20Uses%20.pdf http://dash.harvard.edu/bitstream/handle/1/11189865/Solving%...

coldcode 11y ago

What were the drugs they wanted to combine?

shard 11y ago

If there's $300B in annual costs due to health care expenditures and lost productivity which can be reduced with a $1/day drug, it seems like the medical insurance industry should be very interested in such a drug. Is the medical insurance industry unable to carry out the research or pay a research lab to do the work? Or are there other reasons they don't do this kind of research?

DougWebb 11y ago
What makes you think the Medical Insurance Industry is interested in reducing medical costs? They benefit from higher costs. If medical costs were much lower, fewer people would need/want insurance. Premiums would have to be lowered, which means less cash coming into the insurance company, and claims would be fewer and/or smaller which means less cash flowing through the insurance company. Cashflow is where the insurance company makes its profit. The other profit center is captured premiums: money people pay in that they never get back out. The insurance company doesn't care how high your medical bills are or how much you wind up paying for them; the company only cares about reducing its share as much as possible. Lowering the overall cost doesn't alter the payment distribution, so the insurance company has no inventive to lower overall costs. If there was a pill you could take which would allow you to pay a larger proportion of your medical costs, without reducing your premiums, the insurance company would be all over it.