Adam Smith Institute

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We're going to have to abolish drug licencing you know

Yes, I do mean health type drugs, not fun type ones, for the latter a system of licensing would be a tremendous step forward from the current position. But for health type drugs we really are going to have to abandon drug licensing. Or at he very least, our current system of licensing them.

The reason is that currently we've a system which, however bad it is, however many people it kills by keeping new drugs off the market through the expense of getting a license, is aimed solely and purely at mass market drugs. If, as we move to more personalised medicine, we stop having mass market drugs then we cannot have a drug licensing system which is set up only for those mass market drugs that no longer exist.

If each drug takes $1 billion to reach the market and 10 million people use it over its patent protected lifetime, then each patient contributes, on average, $100 to the development of that drug. If we keep shrinking the denominator, then the economics become more difficult. Taken to the extreme of personalized medicine, with one specific drug for each person, we cannot expect that one person to cover the $1 billion development cost. Even if the development cost drops to $1 million per new drug, the economics won't work.

I think the average development cost would need to drop to $10,000 per drug to be reasonable. To reach this price, we would need to exclude the FDA completely--allow drugs to be marketed without prior FDA approval--or allow the FDA to approve the process of drug development instead of each specific drug.

And there are drug treatments out there which are tantamount to a new drug or each person: cancer treatments that study the DNA of the cancer, the specific immune system and which then turbocharge one to attack the other as an example.

Even where we retreat from such extremes we already know that different drugs have different effects on different parts of the population even when being used to treat the same disease. Those of West African derivation can react quite differently, as a group, to a drug than those of northern European, or East African, or Australasian genetic heritage as can each group from the other. We're finding certain gene combinations which mean that certain drugs will or will not work in sub-groups of such larger collectives as well. All in all, we're finding that ever more drugs have ever smaller target populations, to say nothing of those drugs we've developing, or would like to, to treat complaints that only strike a few people.

We therefore have to reduce the cost of a license for each and every drug: which means abandoning out current methods of licensing drugs. We simply cannot continue to use methods solely appropriate for mass market drugs when we're not in fact trying to develop mass market drugs.

All of which is rather alarming really. For you could, I am sure, talk to any individual who works in or with the drug licensing authorities and easily gain agreement with the basic thesis above. But there's nothing quote so conservative as a bureaucracy when acting collectively, however reasonable or intelligent the component parts of it.

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