Here is another example of inadequacy / inefficiency in the pharmaceutical market.
Cancer X is very aggressive and even when it is diagnosed at very early stage and surgically removed, the recurrence rate is something around 70% in 5 years. When cancer returns or when a patient has advanced stage, the mean survival time is only 6 months.
Pharmaceutical company Y has recently discovered a new anticancer drug. According to state-of-art preclinical experiments, the drug inhibits spread of cancer and kills cancer cells very effectively. Top scientists at company Y expect that when applied in adjuvant settings for 4 months after the surgical operation, the drug would reduce the cancer recurrence rate to 30%. Even when the drug is given to patients with advanced stages of cancer, the drug is expected to prolong the life of patients twice.
Driven by the desire to bring the drug to the market as early as possible, executives at company Y initiate the fastest clinical trial. A study in the adjuvant setting (4 weeks after the operation) require several years to complete in order to show that drug has an advantage over the standard of care. A study in advanced stage cancer required much less time, so there is some benefit in getting to market for advanced cancer and to extend survival from 6 to 12 months.
However, once the drug is at the market against advanced disease, clinical trial and eventual approval of the drug as adjuvant would undermine total sales because of the two-fold reduction in the number of relapsed patients who need to take the drug every single day until the end of their life.
This is efficient (drug company gives the most profit per dollar invested) but inadequate (drug company could save way more patients by going into adjuvant therapy) market situation. I would say that the root of inadequacy is a conflict in what is a goal of a pharmaceutical company. I would expect pharmaceutical company to sell drugs and not mortgage derivatives, but as a company, its main objective is the maximization of the profits for investors. So, probably there should be a composite measure of QALY and profits that should be used to evaluate adequateness and effectiveness of the market.
Here is another example of inadequacy / inefficiency in the pharmaceutical market.
Cancer X is very aggressive and even when it is diagnosed at very early stage and surgically removed, the recurrence rate is something around 70% in 5 years. When cancer returns or when a patient has advanced stage, the mean survival time is only 6 months.
Pharmaceutical company Y has recently discovered a new anticancer drug. According to state-of-art preclinical experiments, the drug inhibits spread of cancer and kills cancer cells very effectively. Top scientists at company Y expect that when applied in adjuvant settings for 4 months after the surgical operation, the drug would reduce the cancer recurrence rate to 30%. Even when the drug is given to patients with advanced stages of cancer, the drug is expected to prolong the life of patients twice.
Driven by the desire to bring the drug to the market as early as possible, executives at company Y initiate the fastest clinical trial. A study in the adjuvant setting (4 weeks after the operation) require several years to complete in order to show that drug has an advantage over the standard of care. A study in advanced stage cancer required much less time, so there is some benefit in getting to market for advanced cancer and to extend survival from 6 to 12 months.
However, once the drug is at the market against advanced disease, clinical trial and eventual approval of the drug as adjuvant would undermine total sales because of the two-fold reduction in the number of relapsed patients who need to take the drug every single day until the end of their life.
This is efficient (drug company gives the most profit per dollar invested) but inadequate (drug company could save way more patients by going into adjuvant therapy) market situation. I would say that the root of inadequacy is a conflict in what is a goal of a pharmaceutical company. I would expect pharmaceutical company to sell drugs and not mortgage derivatives, but as a company, its main objective is the maximization of the profits for investors. So, probably there should be a composite measure of QALY and profits that should be used to evaluate adequateness and effectiveness of the market.