The Pebble and the Avalanche

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Current Revolutions in Business and Technology

by Dr. Moshe Yudkowsky,

author of The Pebble and The Avalanche: How Taking Things Apart Creates Revolutions


Thu, 2007-Jan-25, 14:45

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Medical Conflict of Interest

"Public interest" groups — I prefer the more accurate British term, "pressure" groups — continue to press for more disclosure of conflicts of interest in the medical industry. The quetsion becomes, what constitutes a conflict of interest? I've found many recent claims of "conflict of interest" to be quite thin, grasping at straws in order to generate publicity for whoever publishes the claim; but public anger over medical costs makes anyone in the medical profession fair game, and doctors are the least powerful and most plentiful targets. In any industry, there will always be a connection between people who have businesses and those who evaluate the business. The degee of separation is the issue, not whether or not there will be a connection.

But here's a new twist. The NAACP has complained that Medicare does not pay for BiDil, a medication created to reduce heart disease in African-Americans. Insurers state that BiDil is simply a combination of two drugs that are available generically at one-tenth the cost of BiDil, and therefore they prefer to pay for the generic medication instead. The NAACP disagrees, and ascribes failure to prescribe the drug to discrimination.

But here's the twist. Today's Wall Street Journal mentions but carefully avoids drawing conclusions about a grant to the NAACP:

The NAACP has received a $1.5 million grant from the drug's maker, NitroMed Inc., to improve health care for blacks.
If a doctor's group were promoting a drug under these circumstances, they would find themselves under intense scrutiny. The NAACP, as a pressure group, escapes scrutiny. Who watches the watchers?

Wed, 2007-Jan-10, 05:03

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Imminent. Inevitable. Bankruptcy.

My friends are convinced that SCO's drawn-out patent lawsuit against IBM was funded by Microsoft as part of Microsoft's campaign to discredit Linux — "if you can't beat them, smear them." Steve Ballmer, head of Microsoft, hasn't abandoned that campaign; Microsoft's recent deal with Novell gave Ballmer another opportunity to insinuate that Linux violates Microsoft's patents. Classical FUD from the masters of FUD at Microsoft, and a measure of Microsoft's continued desperation as it tries to prevent continued disaggregation and stifle further innovation in the computer industry.

But it seems that SCO's lawsuit, and SCO itself, may be drawing to a close. Novell's filings against SCO claim that much of SCO's income is actually money that belongs to Novell, and

For SCO, bankruptcy is inevitable; it characterizes its assets as merely those "remaining" and does not rebut Novell's arguments that its bankruptcy is imminent.
As Groklaw states, the key words are "Imminent. Inevitable. Bankruptcy."

One of the lessons here is Microsoft's apparent treachery. Microsoft infused cash into SCO, which used that cash to fund a lawsuit against IBM and Linux. Now Microsoft is funding Novell in a different anti-Linux tactic while Novell attacks SCO. Will Novell fare any better when it suits Microsoft's fancy to try a different attack against Linux?

Fri, 2006-Oct-13, 09:27

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Medicine: Safety and Efficacy of Drugs

United States Senator Grassley suggests that the U.S. Food and Drug Administration (FDA) should disaggregate the function of monitoring post-approval drug safety from the process approving drugs. With an independent drug safety office, the people who approved the drug in the first place would not be tempted to overlook safety problems that might reflect poorly on the process.

While it's tempting to accept this disaggregation, not everyone agrees. The New York Times notes that even though the FDA needs reform (and what government agency in the world does not?), the disaggregation of safety considerations from the approval process would be a bad idea.

This proposed change to the FDA management structure poses an fascinating problem. On the one hand, disaggregation of authority — of approval process from safety monitoring — would likely engender trust in the FDA. On the other hand, here's an interesting lesson from high-school science classes: certain things can't be disaggregated. "For every action, there is an equal and opposite reaction," otherwise known as Newton's Third Law, and that's a connection that simply can't be broken. As much as we'd like to, scientists and engineers can't disaggregate their way out of basic tradeoffs imposed by nature.

In a similar way, drug approvals must trade off efficacy versus safety; every known drug has side effects, and the approval process balances the harm of side effects with the benefits of medications. If the office that determines efficacy disaggregates from the office that monitors safety, it may become extremely difficult to approve any drug or keep it on the market.

Mon, 2006-Sep-18, 09:10

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Keep Your Clients Separate

As a consultant, I've been told by a few companies that if I steer companies their way, I would be compensated. I expect that the practice is legal, but I have severe doubts as to whether it is ethical, and I have never done it. (For the record, I don't even recall which companies made such offers.) Given this widespread practice, clients who hire consultants must clarify whether it's acceptable for these consultants to accept commissions.

Today's Wall Street Journal has a page-one article about a health care consultant who accepted commissions from a company he recommended to his client. Ironically, this was after the client fired the previous consultant for the same behavior. I can describe the consultant's situation as a failure to disaggregate: he should have distinguished between the activity of providing impartial recommendations and the business of working for a commission.