Scott Alexander IS an Economist
By David Henderson
So many other bloggers called attention to Scott Alexander’s outstanding post about why the price of EpiPen is so high that I didn’t feel the need to.
But now he has written another post about drug prices and the harm done by drug price regulation and has hit it out of the park again.
All of this sounds sort of boring and economics-y when you read it like this, and maybe your eyes are glazing over. So let me put this in context. In 2060 there will probably be 420 million Americans and 523 million Europeans. And suppose that whatever changes we make in drug regulations today last for one human lifespan, so that everybody has a chance to be 55-60. So about a billion people each losing about 0.7 years of their life equals 700 million life-years. Since some people live in countries outside the US and Europe  and they also benefit from First-World-invented medications, let’s round this up to about a billion life-years lost.
What was the worst thing that ever happened? One strong contender is Mao’s Great Leap Forward, in which ineffective agricultural reforms and very effective purges killed 45 million people. Most of these people were probably already adults, and lifespan in Mao’s China wasn’t too high, so let’s say that each death from the Great Leap Forward cost what would otherwise be twenty healthy life years. In that case, the worst thing that has ever happened until now cost 45 million * 20 = 900 million life-years.
Once again, RAND’s calculations plus my own Fermi estimate suggest that prescription drug price regulation would cost one billion life-years, which would very slightly edge out Communist China for the title of Worst Thing Ever.
He then continues:
Am I exaggerating or being facetious? I’m actually not sure.
Dammit, JimI’m a doctor, not an economist. I’m not qualified to analyze any of those ten studies above beyond a quick check to see if they’re completely ridiculous. I’m not qualified to say if RAND is right or wrong to estimate a cost of 0.7 life-years, or whether I’m misusing their calculation to try to add up exactly how bad it would be. Maybe a real economist will look at this whole essay and say it’s really stupid. I don’t know.
Nope. It’s not stupid.
It took me longer than many of my friends to be a fan of Scott Alexander. But I am now on board.