The Life Cycle of a Drug: Pediatric Exclusivity - Update

One paragraph in Keven Outterson's post at The Incidental Economist relates to my previous post on pediatric exclusivity. As you can see from the title of his post, his approach is quite different from mine, and I recommend reading it in its entirety.

How should we buy and use efficacy data on drugs?

The government could offer alternative regulatory carrots and sticks for creating these public goods. Existing models include paying companies for conducting pediatric studies by granting six additional months of marketing exclusivity. Just this month, Merck won an additional six months for Lipitor, worth more than a billion dollars in profits, by studying atorvastatin in children. What is missing from this program and similar ones is any sense of cost-effectiveness. The government delayed generic approval of Lipitor, at a huge cost to public and private payers, in order to “purchase” pediatric studies that might have cost a small fraction of that amount. Direct funding of pediatric studies by the NIH would make more sense, and we’d get studies on drugs that kids really need instead of drugs that happen to sell well to adults.