March 14, 2010

Cost, Care and Efficient Markets

The Philadelphia Inquire has an interesting front page story on a promising MS treatment. The story’s plot goes like this: researchers find a very promising treatment based on an existing generic drug. Finding the money to do the clinical trials is next to impossible. This is because there is no ability to patent the already generic drug so there is no big pay off for the treatment. 

To the type 1 community this is somewhere between a conspiracy theory that explains why there is no cure and eerily similar to some a certain possible type 1 treatments. I don’t much by the conspiracy theory of strip companies maliciously keeping a cure form the market. I do wonder about an industrialized health care system that has no mechanism for funding the investment in significant cost and life saving alternative.

In a market driven system the cost of innovation are in theory rewarded by exclusive rights under patents.  Where in that is there a process for efficiency. In classic supply and demand economic payers would demand lower cost alternative and the market would supply them. That assumes efficient markets. However the need for safety requires scientific trials. They cost huge piles of cash that are barriers to market entry.

One means of reducing those barriers are the not for profit organizations dedicated to finding cures. In the Inquirer’s story it is the National MS Society that steps up to fund one step of the trials.

I find it interesting to look this case to help clear my thinking about how JDRF works on type 1 diabetes. I am not as emotionally invested in MS. The detachment helps me more rationally value means of addressing the market barriers that have slowed the MS research reported in the Inquire story. 

That in turn makes me value the mechanism that do just similar things in the diabetes community. Specifically JDRF’s IDDP. In many cases these are funding trials with from profit companies. I have seen cries of concern over JDRF working with help for profit companies. Better that than the anguish of  the trials not happening.

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