The Science of Scarcity

Among the many definitions of Economics, the “Science of Scarcity” is the one that resonates with our work the most. Scarcity is the condition of having unlimited wants but only limited means, so Economics can then be thought of as a tool that helps us make a choice. The past week, the economics discipline has been in the news quite a bit, and this weeknote shows how much our team is deep into clinical trials that we couldn’t help but make one obvious, and two critical connections.
First, the obvious one: prices. Our team has been debating this issue on multiple levels about how prices get set in the market and how much the cost of producing a single drug influences price, as opposed to cumulative costs of running a pharmaceutical company. We’re looking at medicare reimbursement limits, medicaid pricing data, and average sales price from the RedBook to find out more. We hope once more results from the Tufts study are available to us, we can make it part of our analysis.

Now to the more interesting connection. The Nobel Prize this year was won by Angus Deaton, a British economist specializing in developmental economics. He believes that using foreign aid as a tool to alleviate poverty has not always been a good method to achieve goals. But another one of his quotes resonated with me: “If we want to think about using cash transfers instead of the Public Distribution System, we have to consider all of the subsequent changes, what would happen to procurement and storage, and what would happen to the free market prices of grains. An experiment can be useful for part of this, but only a part, and without all the parts we cannot judge what to do. I worry too that experiments are technical solutions to political problems, that really ought to be decided by democratic discussion; that experiments are often done on the poor and not by the poor is hardly an encouraging sign.”

Yes! This past workday, as our team sat around discussing a scenario where we would be on Mars and would have to design our own clinical trial system, Gary Lin brought up an idea in very clear terms: “Shouldn’t the people who are sick be in charge of developing a drug to cure themselves.” Everyone nodded in approval, and Angus Deaton’s quote flew right in and acknowledged the disconnect. In our clinical trial system, the people who develop the cures and test for potential cures are not the people who need the cure the most. We’ve talked about agency a lot in the past weeknotes, but this simple solution screams right back as the best way to put the patient at the center of the process. If only we were right at the beginning of developing a system, as opposed to today.

The quote from Angus Deaton above is actually about an experimental technique widely used in development economics. This mathematical technique is now entrenched in the world of developmental economics as the gold standard. And Angus Deaton does not like how it is being used. He claims that this technique has the same strengths and weaknesses as other mathematical techniques, but for some reason enjoys privileged status in the developmental economics world. And here is the final connection: he’s talking about Randomized Control Trials (RCTs). Not only the gold standard in developmental economics, they also happen to be the gold standard in clinical trials. Our group has documented the historical and cultural reasons RCTs became the tool of choice for clinical trials, and our arguments follow Angus Deaton’s reasoning. RCTs are a great mathematical tool, but they have weaknesses, and we believe the clinical trial system often fails to acknowledge these weaknesses. It also does not allow space for newer techniques to come in, such as pragmatic clinical trials, that might provide more global answers to how a particular drug fits into our public health world.

I’ll leave you all with one final quote from Angus Deaton: “Each study has to be considered on its own. RCTs are fine, but they are just one of the techniques in the armory that one would use to try to discover things. Gold standard thinking is magical thinking.” We agree.
Sauleh Siddiqui