Pharmacogenetic Interventions, Distributive Justice, and Orphan Drugs: The Role of Cost-Benefit Analysis

Abstract

As the amount of genetic information available has grown exponentially, it has become possible to identify gene-level variations that cause individuals who present with similar disease symptoms to have divergent responses to drugs for those symptoms. The segregation of disease populations based on genotypic variation, or pharmacogenomics, is likely to create small genotypic subgroups for which no private pharmaceutical company will have a market incentive to develop a drug. U.S. law currently provides liberal research subsidies for groups with rare diseases who have been "orphaned" by the market. Because pharmacogenomics is likely to create a much larger number of such orphan groups, policymakers will need to consider the distributive justice question of how to allocate scarce research resources between different orphan groups. Moral theory does not provide a definitive answer to this question. Therefore, we must supplement moral theory with transparent, well-reasoned political debate. This paper advocates cost-benefit analysis as an important component of this debate. It argues that some orphan drugs may in fact be cost-beneficial and should, on that basis, be accorded some preference. The most promising mechanism for identifying such cost-beneficial drugs, and giving them preference, would be some type of patent term extension.

JEL Classification: I1, K0, K32