Bayesian Investor Blog

Book review: Ending Aging: The Rejuvenation Breakthroughs That Could Reverse Human Aging in Our Lifetime by Aubrey de Grey and Michael Rae.
This book makes a strong argument that the most important medical need in developed countries is to cure the damage associated with aging, rather than to combat the diseases which become serious as a result of that damage. It outlines a set of solutions which, if they can be implemented, look like they would add at least a decade or two to healthy lifespans.
All of the solutions look like they have a reasonable chance of being implemented within 20 years. But the probability of all of them working within that time is a good deal lower than the probability of any one solution working, and there’s no obvious way to analyze whether we can get significant health benefits without implementing all of the solutions.
The authors seem somewhat overconfident about most aspects of their proposed solutions, but that doesn’t affect the substance if their arguments very much. Even a small chance of postponing death and disability is worth a good deal of effort.
The parts of the solutions that appear hardest are the ones that rely on techniques similar to what are already being attempted by mainstream scientists (genetic engineering to add and delete genes from most cells in the body, massive use of stem cells, and moving enzymes across the blood-brain barrier). My impressions about the effort that has been put into these techniques and the results that have been produced so far suggest that at least one of these is likely to take much longer than the book asks us to hope for. The book gives one clear example of important research not living up to the hype surrounding it when it gives arguments that most cancer research is directed toward modestly postponing cancer rather than providing a full solution to cancer. I see no obvious way for a layman to tell whether the authors are relying on similarly overhyped research.
So even though the book gives convincing arguments that the goals of medical research ought to be reframed to focus on aging as the primary threat to be solved, it’s far from conclusive about whether that should imply a large change in actual research. It may be that the hardest and most valuable tasks are the ones that are already being worked on. Or it may be that one of the critical tasks is sufficiently hard that the most important need is to invent tools that are substantially more sophisticated than what’s used in existing research (i.e. that we most need something more radical that what’s proposed in the book, such as nanomedicine).

Book review: Reasonable Rx: Solving the Drug Price Crisis by Stan Finkelstein and Peter Temin.
This book provides a mediocre analysis of what is wrong with drug prices, and presents a solution that is probably a nontrivial improvement on the status quo, but isn’t the most thoughtful solution I’ve seen.
The most important complaint of the book boils down to the fact that knowledge about drug safety and effectiveness is a public good, and the current method of rewarding drug companies for producing that knowledge is mediocre (although the book presents it less clearly than that and seems as interested in blaming drug companies’ lack of altruism as it is in analyzing the incentives).
For example, it is sometimes possible to identify biomarkers which indicate that a drug will be ineffective in a patient, but that would often reduce sales of the drug.
They complain that the current focus on producing a few very profitable drugs is an obstacle to creating personalized treatments. But they do little more than imply that drug companies are misjudging the available opportunities, without presenting any clear evidence that the authors’ have better judgment about what’s feasible.
Their proposed changes to the drug industry involve separating drug development and drug marketing/manufacturing into two different sets of companies, and using a combination of subsidies and contractual price controls (negotiated by a government sponsored nonprofit) to lower the prices of drugs.
They didn’t convince me that splitting drug companies will produce any significant benefits, although I also don’t see it producing harm.
The subsidies and price controls are likely to help mitigate some of the problems created by the patent system. Their attempts to show that this solution is better than Kremer’s patent buyout proposal suggest they don’t understand how much harm patent monopolies cause. Their subsidy mechanism isn’t clearly tied to benefits (unlike proposals for prizes based on Quality Adjusted Life Years). They claim drug prize proposals set arbitrary values for drugs and that their auction system produces a less arbitrary market price, but the subsidy part of their part of their system is at least as arbitrary, and their market based prices reflect the value of an arbitrary patent duration.
Their claim that Medicare savings will pay for their subsidies seems deceptive. When estimating the Medicare savings, they appear to rely on an assumption that prices of existing drugs will drop by a large amount. Yet when estimating the subsidy costs, they appear to count only the costs of subsidizing newly introduced drugs.
They are too quick to complain about drug companies medicalizing conditions that are mere inconveniences. E.g. they say Flomax does nothing more important than reduce sleep disturbances. This ignores the evidence that sleep disturbances cause significant health problems.
The chapter “Are Drug Companies Risky?” is pointless because it only evaluates the most successful companies (i.e. those whose gambles have already paid off).