Diminishing Returns for Pharmaceuticals
This is Jacob Goldstein at The Wall Street Journal Health Blog:
A study of heart-attack patients published in the late 1980s was wildly successful. Researchers showed they could lower the heart-attack death rate to 8% from 13% by giving patients aspirin and a drug called streptokinase. These days, though, an 8% mortality rate would be disastrous; the rate in most studies of heart attack patients is somewhere around 4%.
That points to a challenge for companies developing new therapies for heart disease (and other well treated maladies): The better existing therapies are, the harder it is to come up with something that’s an improvement. An essay published in this week’s JAMA calls this process “innovation to extinction.”
Surprise: returns diminish. Last time I checked, it’s a law.
This same argument has been made about all health care innovation. If everything else remains the same you find yourself moving along a curve with an ever flatter slope — reflecting the diminishing returns.
However, innovation also casues the curve to shift to a higher level, where the diminishing returns start all over again.
Wish I could draw this for you. I think you will find the diagram in one of David Cutler’s books.
Joe is right.
Diminishing returns is why consumers need to have more say (and financial responsibility) in the care they receive. Dropping from 13% to 8% was a relative bargain (aspirin was cheap and streptokinase could dissolve clots). Further innovations lower the rate by four more percentage points. As a society, we could spend infinite amounts of money seeking further reductions in cancer mortality, cardiac mortality, and so on. But we’d be buying additional years of life with increasingly large (marginal) dollars. Whether or not Americans want to spend, say, 80% of lifetime earnings gaining an extra year of life is not something bureaucrats at HHS should have the power to decide.