Thursday, November 22, 2012

Type I and Type II Errors

An efficient pharmaceutical regulation system will balance the costs of mistakenly releasing bad drugs onto the market against the costs of taking too long to release good drugs. It's easy to point ex post to bad drugs that were released in error, but changing the system to be more rigorous will very likely also delay the release of good drugs.

Unfortunately, stories like this one have a much easier time finding people who've died due to bad drugs than finding those who have been saved because a good drug was approved more quickly in Canada than in the US.

Maybe there are system-wide improvements that can move Canada onto a more efficient frontier. But if you're on the frontier, you're always trading off the costs of killing people with bad drugs against the costs of killing people by delaying their access to drugs. The Macleans piece seems horrified that many serious drug dangers are found after a drug has come to market:
Meanwhile, the problem continues to grow. The need for change is reflected in a Canadian study that reveals that serious drug dangers are frequently identified after they come to market. Almost one-fifth (19.8 per cent) of 434 new active substances approved by Health Canada between 1995 and 2010 were later given serious safety warnings—some only months after approval—Joel Lexchin, a physician and professor in the school of health policy and management at Toronto’s York University, found. The study, published last month in the Archives of Internal Medicine, shows risks are higher for drugs fast-tracked in 180-day “priority reviews” (versus the 300-day norm): 34.2 per cent had serious warnings.
Sure. But we have to weigh things. If a third of fast-tracked drugs had serious warnings after they came to market, then two-thirds didn't. We have to weigh any costs experienced by folks getting the bad third against the benefits of quicker access to better drugs for the people getting the good two-thirds. How many people would Canada kill through delay if they decided to make the procedures so strict that every single possible danger was identified before drugs were released?

I don't know whether Canada's at the right point on the frontier, or even if it's on the frontier. But America sure isn't at the right point on the frontier. And that the Macleans piece doesn't even consider the tradeoff means it really isn't helping to find the right answer.

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