Juha Laine – InFLAMES Flagship Blog

Applying Pharmacoeconomics for Drinking Water

Economic thinking and the methods used in economics can be utilised in various situations. To quote a certain Professor of Economics, “The creative imagination of economists can be expected to find solutions to all measurement problems”. For example, “What is the value of life?” is a question for which an educated economist will offer a solution while waiting for their coffee to brew.

There are many research paradigms and areas of application in economics. There is environmental economics, urban economics, business economics, and labour economics, to mention a few. Not surprisingly, there is also health economics and pharmaceutical economics.

In health economics, the organisation and production of health services and incentives, as well as other issues that are essential for social reform, are studied. In pharmaceutical economics, areas of interest include the cost-effectiveness of pharmaceutical treatments, health-related quality of life, and the operation of the pharmaceutical market.

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The value of a drug is measured along the way

Juha Laine Professors of Practice

How would you concretely measure the value of your work in the short and long term? During my lecture, I asked such a question from the students studying drug development at the University of Turku. The question was quite difficult. I received only one answer. Well, as anyone who teaches knows, even simple questions may get only one answer.

According to the brave respondent, the value of the work done in drug development could be measured by the number of patients treated with that drug in the future. It was easy to offer a countering question: Is the development of orphan drugs then not valuable in this sense? There is considerable uncertainty about the future number of patients in the initial stages of a drug development project.

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Wins and losses – Does a failed drug development project matter?

Juha Laine Professors of Practice

Developing a drug from an idea to a finished product is a long journey. It takes easily more than ten years and can cost hundreds of millions of euros. However, the end result may be a drug that relieves symptoms or heals the patient. Sometimes we manage to also prevent diseases.

And for this reason, the failure of a drug development project affects many. Researchers who have done basic and applied research are disappointed, start-ups are facing financial difficulties, stock prices of large pharmaceutical companies are falling, doctors are not getting new tools, and patients who want the medicine are disappointed. Members of my own profession will be left without work, sitting by their Excel sheets. There is no need for cost-benefit calculations by health economists.

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