Defending the Free Lunch: Mistakes Economists Make

One of my esteemed colleagues called my attention to a recent column by Emory University economist Paul H. Rubin:

http://www.forbes.com/columnists/forbes/2008/0225/026.html

Professor Rubin defends the free lunch and most every other form of drug company marketing, making the points:

1. For-profit competition is the best way of getting people to do useful things, including curing deadly diseases.
2. Drug company marketing is information, packaged in the most useful way for busy physicians to grasp.
3. If docs prescribe the most expensive, latest drugs, like drug reps want them to, their patients will benefit.

In short, God's in his heaven, all's right with the world, so long as Big Pharma rules.

Now, I had the honor to be on a panel with Professor Rubin at a conference last fall. He seemed a reasonably pleasant sort of fellow, though the "H" for his middle name does not stand for "humble." But one thing that became very clear in personal conversation with him is that he has complete faith in the research findings of business prof Frank Lichtenberg of Columbia, whose recent work he cites in his column. Lictenberg is the source of Point #3 in the above list, that more recent, more expensive, on-patent drugs produce better health outcomes across the board.

Readers of this blog and of HOOKED and related works might well wonder about such a sweeping claim. Has it not been shown that many recent drugs have serious, unanticipated side effects? Has it not been shown that the majority of recent drugs are really "me too" drugs with no advantages over older drugs? So how could Lichtenberg come up with exactly opposite conclusions?

I have read over several of Lictenberg's research papers, without having any skill at crunching numbers in the ways that economists do. I came to the conclusion that Lichtenberg is all wet. He simply does not know what he is talking about. He has no knowledge of what particular classes of drugs do and don't do in the human body, and seems not to have bothered to talk with anyone who does. So he has no clue when he is putting forth a proposition, based on economic modelling, that is biologically plausible, and when he is saying something that has no possible medical truth to it.

More recently, a detailed critique of Lictenberg's work has been done by people who do know how to crunch the numbers properly. I was privileged to read a draft of their work, and it is an even stronger indictment of Lichtenberg's conclusions than what I have written above. But as that paper is still under peer review for journal submission I cannot say any more about it.

Now, let me be very clear on one point. Some might conclude from this post that I am a typical physician who thinks that only doctors have any brains, and of course, if economists try to talk about medical issues, they will say stupid things. That is not my point at all. I could not have written portions of HOOKED had I not had the good fortune to work closely for several years with a couple of excellent health economists. But because we worked together as a team, I was at least able to warn them when they were making a mistake about some of the medical facts about how various drugs worked, for instance. Admittedly, they were generally very well informed and made few such mistakes. But at least they cared to be sure that they didn't; Lichtenberg seems oblivious.

So, if you buy into the world view that PhRMA and the drug industry tout, then all of Professor Rubin's points are unassailable. Prof. Rubin, a regular industry consultant, has bought it hook, line, and sinker.