When ignorance is bliss: Intentional agnosticism in drug approval

Valentyn Litvin

Health Economics, 2020, vol. 29, issue 2, 185-194

Abstract: In developed nations, public health agencies typically use data from randomized controlled trials to evaluate new drugs. However, these trials routinely exclude populations to which clinicians prescribe approved drugs, meaning some patients are treated with drugs, which were approved on the basis of another group's treatment response. Despite having opportunities to change, some health agencies have not mandated greater inclusion in drug trials and appear to prefer remaining ignorant of some populations' treatment effects when approving a drug. To explore this decision, I introduce a novel mechanism by which a health agency would choose to be intentionally agnostic regarding a population's treatment response. The main contribution of this paper is in showing how ambiguity about on‐label and off‐label prescription rates could possibly encourage population exclusion in drug approval trials even in the absence of concerns about trial necessity or cost.

Date: 2020
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https://doi.org/10.1002/hec.3964

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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:29:y:2020:i:2:p:185-194

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