11 February 2016

The Tyranny of Average Cost, part the ninth

The Tyranny of Average Cost™ has morphed into a bugbear in these endeavors. One place where the Tyranny is manipulated to the benefit of the few with cost to the many is Pharma. I've mentioned a few times that Pharma has been pushing Orphan Drugs, based on periodic reporting. Orphan drugs, by FDA fiat (from statute), allow Pharma to charge monopoly pricing on, allegedly, small diseases.

Now comes some numbers confirming the anecdote.
Last year, the agency received a record 472 requests from companies to have their medicines designated as orphan drugs. And the FDA agreed to award 354 designations, which was a 22 percent increase over 2014.

The justification for the Orphan Drug Act amounts to bowing to The Tyranny of Average Cost™.
In a recent paper in the American Journal of Clinical Oncology, a team of researchers argued that drug makers are exploiting loopholes that allow them to widen the market for such drugs and distorting the original purpose of the law.

Ya think? The not always understood gotcha: once approved, a drug company can "educate" physicians to use any drug for any purpose. There are restrictions on how such "education" is implemented, but they're not much of a barrier. Rats manage to get through the teeniest crack.

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