Why Andrew Sullivan is right about Megan McArdle, but not in the way he thinks.

I very rarely read Megan McArdle.  She gets filtered by the “life is too short to read stupid people” mesh.  Specifically, in the area in which she claims expertise, economics, especially political economy she has neither formal training (Lit degree as an undergraduate, and an MBA for post-graduate work) nor any demonstration of subsequently acquired understanding.

But, some will say, she’s got an MBA!.  Well, yes.  That and a token gets you (showing our age here –ed.) on the T.

It’s not as well known as it should be — at least for those trying to get a quick read on the knowledge and skill of unmeritedly popular pundits, but MBA courses do not teach economics as real economics departments understand the subject.

Just take a look at the MBA offered by the management program to which I am closest (at least geographically), MIT’s Sloan School.  You get a required semester of economic analysis applied to business decisions…and that’s it for the baseline experience.  If you enter the entrepeneurship track you can (but are not required) to choose a couple of electives on the economics of particular industries.  You can get a very strong background in finance if you want, which certainly expects and hones proficiency with quantitative problems — but though numbers are involved, as are thoughts about money, the problems considered are not those that lead to a deep, or even a superficial analytical understanding of the kind of problems that MIT’s top-five (some years, top one) econ. department thinks are important.

Take note of a couple of things here:  I’m not saying that there is anything wrong with business schools that base their curricula on what their graduates will need to succeed in businesses.  Economics as an academic discipline, or even as an applied social science within the wider world is not what managers and entrepeneurs use as primary tools when making decisions on an enterprise or project basis.  It’s just a fact:  B-schools teach managerial skills and the methods useful in some fairly well defined fields, consulting, management, and finance, for the most part.  Economists do something quite different, and the knowledge and methods needed to do that work are taught at a different place in the academy.  Fine so far.

But the punchline for this story is that Megan McArdle in fact knows very little — not nothing, but not much either — of the formal apparatus of modern economic thought, nor of the rich bodies of content knowledge real economists have developed on a number of important questions, including, most important for the present discussion, medical economics and political economy.

Which brings me back to my headline.  I don’t read McArdle much because I know she doesn’t know what she’s talking about, and the glibness of her ignorance and the infantile quality of her ideology (that brand of libertarianism present in populations that include my nine-year-old and that can be summed up “you can’t tell me what to do”) piss me off.  Why read annoying, uninformed –if glibly written — dreck?

But Andrew Sullivan, who is one of the most infuriatingly variable bloggers in the quality of his bullshit detector, pointed me to this post by McArdle, calling it a “must-read.”

Well, if I must, I must, and so I did.

Now, the reviews are already coming in on this essential wisdom, and they ain’t charitable.  I’m not going to take the time here to piece together the complete takedown that she deserves, but I’d like to take a few quotes and hold them up to the light.

First — gamed assumptions:

in the absence of a robust private US market…

Only if the public option proves to be so much more satisfactory than all others will there fail to be a private market for health care.   And in fact, because the public option is a payment option, and not a provider (like the British NHS with which the proposed plans are often deliberately and deceitfully compared (are you listening, Andrew?)), there will be lots of markets within what is properly called the health care sector, even in the presence of a single payer.  See, e.g. Medicare. (And Canada, et al.)

Of course, if your analysis needs to assume a pure government fiat control of health care, then such an assumption becomes required even when false.  McArdle is a bad faith debater — and she has to be, because she knows the answer (markets (a usually unexamined term) good, government bad) that must be reached.

Neexxxt:

So in the absence of a robust private US market, my assumption is that the government will focus on the apparent at the expense of the hard-to-measure.  Innovation benefits future constituents who aren’t voting now.

Well — here’s the rub.  The argument McArdle wants to make against government control of health care (not that she’s demonstrated that the plans under discussion would lead to that eventuality…see above) turns on her demonstration that the government will constrain  “future lives, and future freedom…”  And yet her argument begins with the assumption that the government will do one thing and not another — and of course assuming that which is to be proved makes the pesky problem of developing a robust sequence of cause and effect a whole lot easier.  Did I say that McArdle’s faux-naive libertarianism leads directly to bad faith arguments?  I did?  Good.

To take the next step, McArdle is simply wrong, factually challenged, intellectually too damn lazy to do even the minimum googling to test the claim she makes in the passage above and in the remarks taht follow.  Innovation benefits future constituents who are voting now…duh.

Case in point:  The history of the anti-cancer agent Taxol, a compound initially isolated in the bark of the Pacific yew tree.  Samples of the bark were collected in the early 19602.  An interesting compound was then identified in 1967 with its structure being deciphered in the early 1970s in research funded by the National Cancer Institute.  It was identified as a drug candidate in 1979, once its method of action became understood, and phase I clinical trials started in 1983.  Its path to approval was slowed by the limited amount of precursor plant material available, a roadblock that was ovecome when an alternate path to the synthesis of the drug in large quantities was found through the use of the needles from a different yew species.

With a pathway to production in hand, the drug received initial FDA approval in 1992 for treatement resistant ovarian cancer, with approvals for a wider range of diseases following over the next decade.

Among those who would benefit from this development:  A woman who was 35 years old and voting for Pat Brown for governor of California in 1962; 40 in 1967, looking toward a vote for Gene McCarthy in the Democratic primary of ’68, and HHH for president in the fall; 52 in 1979, disappointed with but determined to vote again for Jimmy Carter against a former California governor she knew all to well;happy to go for young Bill Clinton in ’92; and in 1995 would be diagnosed with the stage IIIb non-small cell lung cancer for which she would receive Taxol — a treatment that extended her life to the point where she could bless the marriage of her third child, the writer of this blog post, ten days before she died.

That is to say, as McArdle appears not to know (or to be unwilling to grasp that which might confound her received knowledge), biomedical innovation does not take lifetimes to complete, these days, and hasn’t for some considerable time.  My mother was a voter at the pure natural history stage of the research that led, within her lifetime (and a series of cast ballots) to the biologically active chemical that extended her life.

And so it goes.  There’s a lot more wrong in McArdle’s screed.  She has very little understanding of the actual daily life of biomedical research — this next paragraph is so full of false statements it wearies the critic, which may be a deliberate feature rather than a bug of McArdle’s prose.  Think of it as a form of rhetorical pesticide, an analogue to the tactics of plants that generate so much poison that those that would munch its leaves recoil in horror at its bitterness:

In the case of pharma, what an NIH or academic researcher does is very, very different from what a pharma researcher does.  They are no more interchangeable than theoretical physicists and civil engineers.  An academic identifies targets.  A pharma researcher finds out whether those targets can be activated with a molecule.

This is just a cartoon, laughable if it weren’t even a little influential (remember that encomium from the Most Read Blogger Alive™, Mr. Sullivan).  Academics don’t look for molecules?  Has she ever asked any of them?  I could throw a stone from where I sit and hit dozens of MIT researchers pounding molecules into receptors and so on…just check out these films, made by my students three months ago, within the Lindquist Lab at the Whitehead Institute on research into an anti-Parkinson’s molecule/drug candidate.  Or further down the same page for the story of two dedicated researchers within the Sinskey Lab in the MIT department of biology, tracking down a novel antibiotic in a two year hunt.

Seriously:  McArdle writes what she wants to be true.  She is wrong on all significant points in this post.  The second half is, if anything, even more ludicrously miswrought than the section I’ve focused on here.  She objects to public health research, in a nutshell, because it might produce findings that encourage changes in behavior.

The fact that obesity is getting some attention as a health problem in the context of a debate about the cost of health care in the US is for her conclusive evidence of … what?   Oh — it turns out, in her “analysis (sic) that the attempt to provide coverage for 50 million uninsured Americans and to reduce the impact of a disastrous incentive structure within the health care sector so as to reduce the per-insured cost of health care is in fact merely a cover for rich white people to make everyone thin like them.  I’m not kidding.  In her own words:

Look at the uptick in stories on obesity in the context of health care reform.  Fat people are a problem!  They’re killing themselves, and our budget!  We must stop them!  …How far are we willing to go beyond calorie labelling on menus to get people to slim down?

How far indeed?  McArdle tells us–measures, unspecified that “aren’t just a way to save on health care; they’re a way to extend and expand the cultural hegemony of wealthy white elites.  No, seriously.”

No, seriously Megan, shut up.  This is just crazy….birtherism for the gliterate crowd.

The proposition with which this post began was that McArdle knows nothing of economics or political economy, beyond that minimum of jargon needed to cloak her adolescent Randian delusions in the veneer of policy knowledge.  In this post, her manifesto on why she opposed national health care, she demonstrates the arguing skills of a six year old (that conclusion contained within an assumption not in evidence); the reportorial effort and acuity formerly celebrated in The National Enquirer (the too-good-to-check school of journalism), and an understanding of modern biomedical research exceeded by the potted plants in Building 68 at MIT.  (Really — go check out the Sinskey videos mentioned above.)

That which to be demonstrated has been done…q.e.d.

Which brings me back to Sullivan.  Did he read that piece he celebrated as a must-read?  If so, did he think it added something essential, true, valuable to this debate?  If so, what does that tell you about the rest of his comments about the health care policy struggle now underway.  If you answered that he don’t know sh*t — you get a gold star.  Sullivan’s view of the health care debate is grist for another post on another day when I can stand the stupid, but for now it seems to me to be composed of equal parts Thatcher nostalgia, and Sullivan’s well known innumeracy, his inability to get his head around issues with significant technical or quantitative components.  It’s easier for him to wax romantic about free peoples and free markets than to examine the actual nature of markets and their distortions as they operate in health care.  That is all.

Image:  Hans Sebald  Beham “The Little Fool,” 1542

Explore posts in the same categories: bad ideas, bad writing, Medicine, Policy, political follies, ridicule, seriously, Stupidity, Uncategorized, words mattter

55 Comments on “Why Andrew Sullivan is right about Megan McArdle, but not in the way he thinks.”


  1. I have a Phd in economics and I enjoy reading both Megan’s blog and your own.

    In my opinion Megan shows an extremely strong understanding of economic analysis. Her intuitive grasp of microeconomics and public choice theory exceeds that of most academic Phd economists.

    • Josh E. Says:

      Even if one were to grant that, here she doesn’t understand anything about pharma research, as demonstrated by the “academics identify targets, pharma researchers figure out how to activate them” quote, and bases her “economic analysis” on that.

    • horatius Says:

      McMegan is that you? Are you pulling a Sprezzatura?

    • The Wrath of Oliver Khan Says:

      I call bullshit.


  2. [...] Tom Levenson gives McMegan’s latest far more time and space than her work deserves. Still, someone has to answer the ignoramuses, and Tom is an excellent writer. Go read and enjoy. [...]

  3. EJ Says:

    Regardless of whether or not Megan understands what academic researchers do, on a basic level I simply do not get the argument that government health insurance stifles free-market innovation. I mean, no one who says this actually seems to make an argument.

    Do they think that Obamacare proposes to nationalize the pharmaceutical industry?


    • Government run health insurance will give the government even more power to set the maximum prices of health care products such as drugs. This will reduce the expected future profits of producing these products and so result in less of them.

      Evidence for this comes from the fact that pharmaceutical companies make a disporponant percentage of their profits from the U.S. market. If we were to adopt a European like health care system they would make less profits from us and so have less incentives to research new products.

      Obama wants to reduce U.S. health care expenditures while expanding the number of people who get treatment. Where will the necessary savings come from? The most likley place is from reduced spending on research and development because the harm of such a reduction won’t be felt until after Obama has left office.

      • Anselm Says:

        Do you honestly believe that the European pharmaceutical industry does no research?

        Besides: the current plans for healthcare reform have (again!) nothing to do with the European systems.

      • Judy Greer Says:

        Government run health insurance will give the government even more power to set the maximum prices of health care products such as drugs. This will reduce the expected future profits of producing these products and so result in less of them.

        So you’re saying that pharmaceutical companies will not do the research vital to their profits over the long term because those profits might not be quite as obscene as they are now? That they’ll just give up on creating new drugs –their REASON FOR BEING and their SOURCE OF PROFIT — because they might not be able to charge US consumers astronomical prices any more? They’ll just close up shop and go away (which is what limiting their investment in new drug development would amount to)?

        Evidence for this comes from the fact that pharmaceutical companies make a disporponant percentage of their profits from the U.S. market. If we were to adopt a European like health care system they would make less profits from us and so have less incentives to research new products.

        Their incentive to research new products is to make whatever profit there is to make, not achieve some particular LEVEL of profit. Their incentive is to stay in business as a pharmaceutical firm. Deciding not to develop new products would be the equivalent of suicide.

        Where will the necessary savings come from? The most likley place is from reduced spending on research and development

        Assumes facts not in evidence.


      • Response to Anselm

        “Do you honestly believe that the European pharmaceutical industry does no research?”

        They do less. And they would do even less research if they expected to get lower profits from the U.S. market.

        Response to Judy Greer

        “So you’re saying that pharmaceutical companies will not do the research vital to their profits over the long term because those profits might not be quite as obscene as they are now?”

        If they expect to make reduced profits they will have a higher cost of capital (meaning it will be more difficult for them to raise money from the stock market) meaning they will have fewer resources to invest.

        “Their incentive to research new products is to make whatever profit there is to make, not achieve some particular LEVEL of profit.”

        Yes, but you need to define profit to take into account opportunity costs (a concept that Megan understands but I suspect you don’t). It might not be possible for pharmaceutical companies to make a profit under Obama care, meaning capital will shift out of the pharmaceutical sector.

      • Tom Says:

        Now play nice, Prof. Miller. (a) I’m not sure McArdle understands opportunity costs that well and (b) you don’t need to condescend to those with whom you disagree.

        I’m glad you find my blog interesting, and while we disagree about the quality of McArdle’s analysis, that’s what makes the intertubes.

        I disagree with your comment on the relative research focus of Euro big pharma vs. US big pharma, if only because (a) Euro drug companies now are significantly larger in aggregate than the purely US plays, and (b) more because virtually all of the major players are truly multi-national, as I am reminded when I drive by the Novartis (nominally Swiss) Cambridge campus every day on my way to work (and yes, I know anecdotes are not data, but there’s plenty fo fact to back impression here), and (c) because from what I hear from my contacts in both big pharma and biotech, while there is a significant research effort in every big pharma company, a significant part of the intellectual capital effort of every major mainstream drug company is research into biotech and small, often single-molecule or biological process companies suitable for acquisition.

        Also, as I’m sure you know, the government plays a much larger role in drug development, and not just basic research than either you or more egregiously McArdle acknowledges here: from SBIRs to significant grants ot public-private collaborations the NIH is major driver of drug development. Given that the NIH has remained one of the sacred cows of the Washington budget cycle for good political/political economy reasons, there is no reason to suspect under any health insurance reform taht this stream of funding would decline.

        Finally, your analysis and Megan’s assumes the conclusion not in evidence: that the existence of a government plan….say medicare…has had a demonstrable negative pressure on innovation in health care. There is no doubt that health care deliver skews to what insurers, public and private will pay for. But the emergence of a new drug or technique drives that discussion as much as — more than — any open market mechanism.

      • Jamey Says:

        Professor:

        Disincentive? What further incentive do pharmaceutical companies need?

        I contend that reduced margins will spur development of more drugs and treatments–most research is ALREADY publicly funded. The pharmaceutical companies will expand their quest for new products to bring to market. This race for new revenues will spur innovation.

        Further, pharmaceutical companies can offset “lost” profits by cutting overhead expenses–I know from personal experience how top-heavy their management structures are, and that their sales, marketing and promotion initiatives are ridiculously inefficient. Pharma will have to run a bit leaner, and make do with fewer opportunities to jock-sniff the likes of Jerome Bettis and John McEnroe, both of whom shill for Glaxo to the tune of millions of dollars/annum–and that’s for just two product lines out of the hundreds in Glaxo’s portfolio.

        Your argument is tantamount to saying that compulsive gamblers will stop going to casinos if they’re not guaranteed to win.

        That’s silly.


      • Reply to Jamey:

        Under Obama care the government will determine the profitability of Pharmaceutical companies. This will cause pharmaceutical companies to invest even more in lobbyist and marketing to convince voters and politicians that the government should pay for their products. Pharmaceutical companies will start to pay millions to hire ex-senators to lobby for them.

        “Your argument is tantamount to saying that compulsive gamblers will stop going to casinos if they’re not guaranteed to win.”

        Investors are gamblers, but not compulsively so. If you make the odds less in their favor they will stop going to casinos.

        In general, if you reduce the benefits of doing X fewer people will do X.

      • eyelessgame Says:

        “Evidence for this comes from the fact that pharmaceutical companies make a disporponant [sic] percentage of their profits from the U.S. market.”

        So you’re saying that we are obligated to continue to subsidize the rest of the world’s drug technology through our deliberately inefficient healthcare system, in which our own citizens are overcharged compared with everyone else?

        A PhD in economics should be able to see a flaw in that situation, I’d think.


    • Reply to Tom

      “you don’t need to condescend to those with whom you disagree.”

      I hope you meant this as a joke because in this very post you wrote “I very rarely read Megan McArdle. She gets filtered by the “life is too short to read stupid people” mesh.”

      ” disagree with your comment on the relative research focus of Euro big pharma vs. US big pharma, if only because (a) Euro drug companies now are significantly larger in aggregate than the purely US plays”

      What’s relevant is the percentage of their profits companies make from the U.S. market, not what percentage of pharmaceutical companies are American.

      It doesn’t matter how big a role the government plays in drug development so long as there is some critical step (such as clinical testing) that the government doesn’t finance. If you do anything to make it harder for this step to be fulfilled then you reduce drug development.

      • gsmart Says:

        But what we are talking about here is smaller profits, not no profits. We’re not talking no investment in drug research, just reduced investment – maybe.

        But even if that’s the case – even if innovation is slowed to some degree – so what?

        You talk about new products – but what of the average American’s ability to afford existing products? I am far, far less interested in making sure the pharmaceutical industry can continue making the amount of money it’s making now, or more, so that it may one day find a cure for cancer than I am in a system that makes treatment for, say, early-stage diabetes available to and affordable for everyone.

      • eyelessgame Says:

        And again, if drug companies are making all their profits from *us*, in what way does that benefit us? Why do we have to be the chumps here?

        You’re saying everyone else in the world is getting a free ride while we Americans shoulder the costs, and that that’s the way it ought to be? What’s wrong with this picture?

  4. ari Says:

    This is an excellent post, and I thank you for it.

  5. Bret Says:

    You, my friend, win at the internets.

    If only say, the Atlantic or WP or someone else published you.

  6. kevin Says:

    Well said.

    Why anyone wants to waste their time reading glibertarian know-nothings like McArdle is beyond me, but I appreciate you taking the time to wade through her dreck.

  7. Dan Says:

    thanks for taking the time to rebut her idiocy, but you didn’t quote my favorite claim from her article!

    (that people are fat because they just dont care, even though weve tried EVERYTHING in supermarkets and public schools)


  8. Tom,

    I share your take on Sullivan. I’ve long wondered what particular branch of the modern conservative cacti he hangs his shawl. I’m tempted to think he has romanticized a tad too much Dutch Reagan’s greatest movie gig.

    As always a pleasure to read the blog.

    • Tom Says:

      Thanks for the kind words. I think Sullivan is a man who tries to think, and I honor him for that. But he’s also a person who had a transformative experience with one or a few books early in his intellectual development — see his Oakeshott hero-worship — and with the emotional rush of a political movement triumph early in his adult life. His slow development of some skeptical antennae has not — at least not yet — given him the self awareness to distinguish a reflex response from a considered one when either of those youthful infatuations gets triggered anew.

      Also his training is in argument, in a tradition that has not for most of its history valorized grubby technical knowledge. I don’t know the man, so I don’t know how much of the old school Oxbridge disdain for useful quantitative skills he possesses, but his writing shows very little appreciation of why what he does not know might actually matter to the arguments he wants to advance.

      That said, his stand on torture and his late — but real — conversion to the view that the Bush administration was a disaster, together with his sustained commitment to working his core subjects puts him in a very different and better class, IMHO, than the McArdle’s of the world. I just wish he weren’t so credulous about his battery mates.

  9. slag Says:

    How about the part where she indicates that having choices makes people unhappy? And she uses that as an argument *in favor of* “free” market healthcare. Glad to find that we’re all sacrificing our happiness at the altar of the Free Market. It’s such a good cause!

  10. Michael Says:

    I too find Megan’s lack of economic knowledge to be incredibly frustrating. I have a Ph.D. in economics and my father actually went to Sloan School at MIT. I have also known quite a few people who have gotten MBA’s. The knowledge taught is quite different. At best you get a narrowly focused semester on one aspect of econ 101. And, not to sound haughty, but to understand the vast majority of modern day economic thought one has to undergo years and years of training. This is true of any expert in any field. Would you trust my medical opinion just because I am “doctor”? Then why would you take her economic opinions seriously? I severely doubt she could understand even one article in the latest issue of the Journal of Political Economy, much less the seminal articles by Arrow, Stiglitz, etc. on the topics on which she claims to have a worthwhile opinion.

    Taking her economic opinions seriously is analogous to thinking that Glenn Beck would make a great Supreme Court justice, and no doubt the fan base for both ideas would overlap quite a bit.

    Megan’s sole success is in her ability to abuse the jargon of the field well-enough to fool those that have never studied economics on a doctoral level. Sadly, there are enough professional economists who share her deluded Randian fantasies to give her some level of acceptability within the economic blog circles (but not within academic circles…no amount of support from actual economists could do that).

    I wish “Jane Galt” would take the lead of her hero and remove her services from the world. That’d probably be the most productive thing she could do.

  11. Ignatius J. Reilly Says:

    I have a Phd in writeology and I quite enjoy Ms. McArdles blog.

    I find she has a very good grasp of how to form a sentence and most of her paragraphs have topic sentences; I especially appreciate her use of vocabulary.

  12. Captain America Says:

    MIT people represent!

  13. Kewalo Says:

    I found my way here via Ballon Juice because I read the McArdle article earlier and really thought it was full of it. And I was actually surprised that Sullivan recommended it.

    But when reading your rebuttal it brought back a time when I was researching big pharm R&D. I’m very sorry about your mom and I’m glad that taxol helped her. But don’t kid yourself, the majority of the research done on it was done with public money. And to this day Bristol Myers got very rich and the public got screwed.

    http://www.phcog.org/Taxus/Taxus_Web.html

    http://www.whale.to/cancer/goodman.html

  14. Redleg Says:

    James Miller said of Megan: “Her intuitive grasp of microeconomics and public choice theory exceeds that of most academic Phd economists.” Does Prof. Miller actually know most academic PhD economists? How accurately can he make judgments about her knowledge of public choice theory and microeconomics based on her writings? I call b.s.

    • shepherdwong Says:

      Like McArdle, Prof. James believes many things he can’t prove – most obviously the future effects of complex public policies (or future public policies) that haven’t yet been written or enacted – because they fit a certain model that comforts him emotionally. As Alan Greenspan famously discovered, getting your economic theory (psychological theory, social science theory, etc, etc.) from a writer of bad fiction doesn’t lead to great insight into anything or, put into practice, very good outcomes.

  15. chrismealy Says:

    “In my opinion Megan shows an extremely strong understanding of economic analysis. Her intuitive grasp of microeconomics and public choice theory exceeds that of most academic Phd economists.”

    That’s because public choice theory is just glorified libertarian politics, and to their credit most academic Phd economists ignore it.

  16. Sloth Says:

    Speaking of bad faith arguments, look at her latest:

    http://meganmcardle.theatlantic.com/archives/2009/07/americas_moral_panic_over_obes.php

    The basic point here, I guess, is that the Obama administration is going to go to war against obesity to cut costs – and it is futile, because obesity isn’t a problem, and you can’t do anything about it anyway.

    More of the evils of nationalized healthcare!

    Look at the end. She’s trying to pin this on the evil government and look what comes out. Could this be the drug companies trying to fast track and profit on new diet drugs. Could it?

    Sorry, lunch time. End of interview. Thank you for playing:

    Megan: Probably have a hard time getting that past Obama’s proposed health commission.

    Paul: Or anybody else’s. I do want to mention that I think a huge factor in all this stuff is the desire to get the next generation of diet drugs through the regulatory pipeline. That’s the goose that will lay the golden eggs for so many interested parties.

    Megan: Well, here on the east coast, it’s lunch time, so I’ll let you go. Thanks for talking with us.

  17. geoff Says:

    Only if the public option proves to be so much more satisfactory than all others will there fail to be a private market for health care.

    Not very imaginative, and certainly not true. I won’t call it “bad faith,” but you’ve certainly joined Ms. McArdle in ignoring scenarios which don’t support your view.

    Innovation benefits future constituents who aren’t voting now.

    You waste quite a bit of time debunking this line, which I suspect was written loosely as art rather than as a quantitative statement. Still, you’re correct if you assume that she meant a generation. I doubt it though – I’m sure she meant that people voting today will vote for immediate gratification rather than taking a long-term view.

    I could throw a stone from where I sit and hit dozens of MIT researchers pounding molecules into receptors and so on

    So is your point that pharma researchers and academic researchers perform identical functions in drug development, and that pharma researchers should be replaced by universities? Or is it quibbling over her understanding?

    My overarching point being that while her arguments are presented sloppily, your rebuttal is just going after the low-hanging fruit.

    • horatius Says:

      Way to miss the point geoff. If you look at what percentage of money that goes to research by Big Pharma is devoted to cosmetic modifications of existing drugs to extend IP revenue streams on the cheap, you wouldn’t be so quick to sacrifice your firstborn on the altar of Big Pharma research worship.

      Throughout the course of the short history of our nation, government sponsored/subsidized research has produced far more medicine/drug/treament innovations than all pharma companies in the world combined.

    • horatius Says:

      Also case-in-point the abnormal amount of money “Big Pharma” spends on Erectile dysfunction. I am sure that money can be better used.

      • geoff Says:

        I’m afraid you’re missing the point. I don’t particularly care what the distribution is. But I do think that debunking Ms. McArdle’s contention requires more than picking at her understanding of the respective realms of responsibility. Does the author believe that private pharma is redundant or not? If he believes that it is, then he should say so. If not, then he’s quibbling.

        Just to play along, though, here’s the first thing I found on Google that says that you’re wrong about the distribution.

  18. Sock Puppet of the Great Satan Says:

    Agreeing with your assessment of McArdle, who is as intellectually lazy as they come.

    McArdle relies on her knowledge of the pharma development process on Derek Lowe (http://pipeline.corante.com/) who is a good blogger on pharma development, but is industry research rather than academia and is going to focus more on the role that pharma plays, and is also going to feel hostile towards anything that reduces pharma’s $$$.

    Also, McArdle hasn’t been paying attention to Lowe’s laments about the decreasing effectiveness of industrial pharma methods for drug and target discovery. The conclusion would be that higher-risk more basic research is needed, which is the role of academia rather than the applied R&D that industry R&D labs do.

    • Tom Says:

      SP: Laughed out loud at first read of this comment, as my Boston-centric head tried to get itself around the notion of genial sinkerballer Derek Lowe as pharma sector analyst/blogger. I mean, I loved what he did (apparently w/out PEDs) for the Red Sox in ’04, but really, is he that versatile?

      But I take your point, and see it as reinforcing mine: McArdle made claims in her blog in her own voice as if she knew the underlying material from some research or reporting she had done. They were, though if I understand you correctly, merely picked up wholesale from another blogger, and she either didn’t know or didn’t care that that blogger’s views were at best incomplete. Which is to say that not only does she not know in any real way what she’s talking about, she doesn’t have the apparatus, or habits of mind and work that would allow her to recognize when she was wandering into areas where her lack of knowledge might matter. Not good.

      Thanks for the comment, btw.

  19. Ben A Says:

    Tom, you castigate McCardle for her ignorance of the drug development process. Yet her account is actually quite accurate. By way of bona fides, I have worked in drug development and related fields for 15 years: in operating roles at start-up biotechs, as a consultant to major multinationals, and currently in life sciences venture capital focused on drug and device development.

    I wouldn’t have written the post the way McCardle did, but her ‘cartoon’ is essentially accurate. In particular, I can vouch for her claims that a) academics largely do not produce pharmaceutical ‘chemical matter’ and b) that the work NIH scientists do and the work done in Pharma are almost entirely non-overlapping. I agree that McCardle should not have suggested that academic labs *never* develop chemical matter. Indeed, my firm is recent looked at a company where the lead molecule was identified by an academic. That said, it is likely accurate to say that in at least 99 cases out of 100 — and probably closer to 9,999 cases out of 10,000 — academic labs do not provide the chemical matter that becomes an approved drug. Academic labs are not, in the main, set up to do this work, and the industrial tools required — high-throughput screening, medicinal chemistry, phage display, etc. — are primarily in the hands of industry. It would be wrong to say academia does nothing like this. And indeed, there are institutions like the Broad that are trying to build these capabilities. In the big picture, however, the academic contribution to *these aspects* of drug discovery is marginal. Tony Sinskey is a friendly acquaintance, actually, and he would tell you the same thing.

    I should add that this perspective of the balance of academic vs. industrial contribution is held broadly. I have never found an academic doing meaningful scientific work with industrial implication who thinks his or her lab is set up to do drug discovery on an efficient industrial scale. Again, it’s not black and white. Maybe the cyclic peptide from the Lindquist lab will turn out to be a drug. I do know that in the past when Lindquist thought she had IP that would support drug development, she did not pursue drug development in her lab, but rather successfully sought venture capital funding to *create a new company.* Indeed, she did this twice (FoldRx and Elixir). If I were betting, I’d bet that if Lindquist’s (intriguing!) new approach ends up yielding a drug candidate, it will be in the institutional context of a biotech or pharma. As is the case with 99.9% of all drug candidates.

    Other problems in your post:

    1. you think McCardle’s public choice argument requires that the beneficiaries of innovation literally need not be alive. This was a hyperbolic statement on her part, I agree. But her argument does not require it to be true. All she needs is for political actors to be more likely to provide benefits for which they can immediately take credit (I cut the cost of your Lipitor, vote Johnson) than for benefits that are in the future and the for which they cannot take credit (great new drug X gets launched in 2015 instead of 2020). Does this seem so implausible to you?

    2. “The absence of a robust market.” I didn’t take this to mean that any public option = UK health care. Rather the point is that the US is by far the most profitable market for innovative products, and that this profitability is largely a result of a pricing mechanism that is closer to market mechanism than in, say, Canada. I hope you would agree that *if* price controls were to decrease the profitability of medical innovation in the US market, this would lead to less medical innovation. Right?

    (apologies for the long comment)

    • shepherdwong Says:

      “I hope you would agree that *if* price controls were to decrease the profitability of medical innovation in the US market, this would lead to less medical innovation.”

      So you mean we’d have fewer dick-hard pills, hair-growing potions and name-brand meds that work less effectively than the generic option while costing 50 times as much and that are more likely to kill you? That would be just awful.

      • Ben A Says:

        Why no love for Viagra? You (or your sig other) won’t be 25 forever!

        But more seriously, there certainly is a disconnect between innovation the market supports and innovation that is most important to human well-being. But there’s a ton of overlap. If you look at the list of best-selling drugs, you’ll see a high proportion of very meaningful medicines.

      • shepherdwong Says:

        Not to brag but I’m more than twice that age and everything works just fine, thanks just the same. Now, if they could make a generic on one of those hair-growing potions…

        My point was that profit-driven pharma may produce quite a bit of good but it also produces quite a lot of profit for its own sake (rather than health care improvement), as well as quite a good deal of harm…for profit’s sake. Excuse me now, I hear a pharmaceutical ad for restless toe syndrome that I’ll need to ask the doctor about next time I can afford to see him.


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