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Friday, July 13, 2012

Roger Bate and phake drugs (cont'd)

As usual, I'm late to the party.  Roger Bate wrote a similar piece in the NYT a few months ago (though focusing on different drugs), and provoked a similar reaction from someone else.  Felix Salmon of Reuters has this to say about Bate's work:

"Roger Bate has a curious op-ed in the NYT today. He’s the lead author on a study which bought 370 drug samples from 41 online pharmacies around the world, and then tested their authenticity. The results? With the exception of Viagra bought from non-verified websites, every single drug was 100% authentic. But you’d never guess that from his op-ed."

Apparently, the op-ed was not about that particular study, but was about other problems that Bate had heard about more or less anecdotally.

"The “more and more cases” of fake drugs being found by the FDA? The FDA’s counterfeit medicine page lists exactly six cases in the past 24 months, of which just two — Tamflu in June 2010, and Vicodin ES in March 2012 — were linked to online pharmacies. The bogus Avastin, by contrast, was being distributed through legitimate channels by two distributors: Quality Specialty Products (QSP), a/k/a Montana Health Care Solutions, and Volunteer Distribution in Gainesboro, Tennessee. It had nothing to do with online pharmacies at all."

I find it extremely annoying when economists try to support their conclusions not just with bad or misleading data, but by reference to non-existent authority -- urban legends and other myths.

"But Bate doesn’t seem to believe the evidence of his own eyes. Instead, he relies on urban myths: his July 2011 paper, for instance, said in its second sentence that “according to the World Health Organization, substandard and counterfeit drugs have been found in both developed and developing countries, accounting for more than 10% of the global medicines market and over US$32 billion in annual earnings.” This is a classic bogus counterfeiting statistic: if you go to the WHO page he links to, the WHO in fact makes no such assertion at all. Instead, it attributes the factoid to the FDA, with no footnote.

"I’ve been trying to track down these statistics to their source for years, and I’ve never yet found one with a solid empirical grounding. Certainly Bate’s own studies would seem to disprove this assertion, but that doesn’t stop him, in his op-ed, talking authoritatively about “criminal networks” which “launder billions in profit”. As far as I can tell, no such network has ever been identified, and while there might be billions of dollars of profit in illegal drugs, that money is much more likely to come from marijuana and cocaine than it is from fake pharmaceuticals."

I reprinted the last two paragraphs above in full just just because they document Bate's sloppiness, as well as Salmon's diligence in trying to get support for the statistic.  Again, it shouldn't be our responsibility to check the numbers -- the economist should tell us where they come from, especially if he's out there doing actual studies and reporting numbers from those.

Some of the comments defend Bate as being more reasonable than the typical AEI drone.  I'm not convinced.  Again, call me paranoid, but I think the pharmaceutical companies get great value -- they can probably even quantify it -- every time an article like this, or a discussion of Bate's Phake book, hits the press.  That's what this is all about.  Trust me.

Q:  When do free marketers start advocating for market controls?

A:  When they are being paid by those who would benefit from such controls.

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