When an subject is controversial, one cannot hope to tell the truth. One can only show how one came to hold whatever opinion one does hold. One can only give one's audience the the chance of drawing their own conclusions as they observe the limitations, the predjudices, the idiosyncracies of the speaker.

- Virginia Woolf

Wednesday, September 21, 2011

opinion : the death of google labs (especially health)

It is a sad day, as I found out that Google is shutting down at labs applications. I've long been a fan of this part of the company and it will be disappointing to see it go I am particularly annoyed that many good applications are going to simply stop existing, particularly Google health. It is a little bizarre when you log on and they tell you to “please switch your information to Microsoft”. Looking at their blogs, it appears that Google closed the project down because it did not get the number of users that they had intended. Google is being foolish here however, as Health never got popular because it was never really marketed properly , or at all for that matter. Many people in healthcare did not even know that it existed, including many of my colleagues. Had Google advertised it to all these people using its other services(gmail or search ads), I have no doubt that the health service would've spread.

Google has clearly not learned its lesson from the days of Google video. Google video was a service similar to YouTube (but technically superior) that Google did not do much marketing for either. As a result Google video was crushed in popularity by YouTube and Google was forced to spend billions of dollars to buy YouTube to compete in the segment that they had innovated in. This is a great example of how a company will suffer if it has many great engineers but not enough good business people to capitalize on their innovations. Google health is not the only labs application that has suffered in this regard. I'm sure that many more people would've used Google squares and several other innovative programs had Google pushed them on its regular users more aggressively.

The fact that Microsoft is going full speed ahead with their health portal also suggests this is a big area in the future. It is a matter of time before electronic medical records become common, and as patients become more interested in seeing in controlling their data, the appeal of health records applications will be huge. Google will learn its lesson when future versions of Microsoft Office are sold to doctors at marked up prices because they include health vault software, and will then be forced to buy some start up competitor to compete.

Now let's just hope that they do not get rid of Google Body - my current favorite Google application.

Labels: , , , ,

opinion : lowered residency work hours makes better physicians

A recent discussion with an attending highlighted an important generational gap in academic medicine, one that has become much more pronounced with the changing resident work hour requirements. The issue is that older doctors feel that the end-all of learning as a student and a resident is achieved by maximizing the hours spent in the supervised clinical setting (“on call”). Most younger doctors tend to avoid these on-call hours, which the older attendings often believe is because of laziness or lack of dedication to medicine. This is a misconception that needs to be corrected however. Young doctors do not like structured clinical on-call hours because we recognize that they are sub optimal for learning.

The first reason that traditional on-call hours are sub optimal for learning has to do with what is expected of doctors during those hours. Most of the work done during these hours is “scut” work, both patient and institutional paperwork that had nothing to education. The second and more important reason however is that people in my generation who have grown up with computers and online resources have come to realize that self-directed, active learning is by far the most effective means to learn the vast quantity of data required to be a competent physician.” Back in the day”, the only way to get information from a good medical lecture was to sit physically in the room and listen to that person talk(some hospitals had physical tape recordings?). Today almost all lectures from any medical school are available to be instantly streamed on the Internet. Throughout medical school, most students have learned to maximize their study time by using their personal preferred online resources. While current residents often spend 100 hours per week learning medicine just as their predecessors did, we understand that is much more effective to have less time with direct patient care and more time in front of our computers studying in the areas that we are weakest on. While this does not necessarily apply to procedure oriented specialties such as surgery, information oriented specialties such as medicine and radiology clearly benefit from residents having extra time when they're not on duty to study as they see fit. In this light, it is easy to see that a resident who spends 80 hours on call and 20 hours studying on their own time is going to be a more knowledgeable resident and one who spends 100 hours on call faxing pharmacy requests and rewriting safety checks. There was a time when the only way to see rare cases was to be on call when these cases came to the hospital, but instant access to electronic resources has made this an issue of the past, especially in radiology.

The idea that you can be a better resident in less time is hard to understand to someone who grew up in an era where commitment and quality were measured by number of cases seen and amount of time put in. It is difficult for many old-timers understand that you can be a better doctor by putting in less time as long as that extra time is used correctly. Young doctors can in fact be better trained in fewer hours.

Labels: , , ,

Saturday, March 05, 2011

opinion : pharmaceutical R&D

This article published in slate summarizes a long running debate between the pharmaceutical industry and consumer advocates. while both sides make good points (drug development is high risk, but pharma industry estimates are certainly inflated), neither is making refference to any good data. I am not sure why this is the case - puplic companies are required to disclose there quarterly expenditures and most describe how many candidates are in the pipeline. It seems to me that a quick look at the annual reports would give exact numbers and allow for an informed argument about R&D costs vs profits. here is an example:

Pfizer
avg spending per new drug product per yr: $84.8 million

multiplying the amount spent per yr x number of years that it takes to come to market (about 10) gives almost the number that the pharmaceutical industry claims it takes to develop each drug ($850 million by my estimate). activists claim that since only a few drugs actually come to market and much of the expenditure for R&D is on postmarketing licensing trials, these numbers are skewed however. While I concede that it is true that companies do not actually spend $850 million directly developing any one drug, it is reasonable to assign this value to the cost of bringing a drug to market based on company's actual R&D expenses.

full disclosure - i used to work in clinical trials for Sanofi-aventis

Labels: ,

Monday, February 14, 2011

Big Blue and the future of medicine

This evening, I watched as the computer took on the jeopardy champions from the treadmill in the hospital gym. I cant help thinking that the computer would make a fantastic physician. In fact, it will likely not be long before similar systems start aiding, then replacing doctors, especially when it comes to formulating plans for diagnosis and treatment.

The jeopardy playing computer is an experiment in programing machines to mine a large data set to answer questions based on a random input. The system does this using Bayesian reasoning algorithms (i am assuming here) to determine %'s of each correct answer and uses a threshold to determine if that answer is correct. In theory, this is the exact same process that a physician uses to make a diagnosis (assuming they are using evidence based medicine (EBM), doctors should technically be assigning a probability that they are correct although I have yet to meet one that consistently does this. IBM needs to figure out how to program an Ego). If the data set entered into the jeopardy system is roughly the same size and complexity as the set of all medical data (I cant even guess this one) then that system should be capable of making expert medical diagnosis. If medical data is more complex, then it will be just a matter of time.

All this is depressing, because a computer should in theory be much faster and more efficient at parsing numerical data (epidemiology, trial data, testing sensitivities) then a human would ever be, and so computers should make better doctors. But what about the human touch? Certainly the person to person interaction adds value to the work of human physicians that computers will probably never match. However computers can add value by developing capabilities that go above what humans are capable of, such as faster learning, or enhanced sensory ability. Each part of the decision making process represents a technical challenge that can be chipped away at by engineers. This is why computers are evolving much faster than humans. Robotic surgery systems are clumsy and slow, but they are getting better. This is of particular concern for primary care physicians because in the modern healthcare field, the doctor's job is decision making and communicating the decisions with patients. (Secretaries and transcriptionists do the paperwork while nurses and techs provide the direct patient care). Watching the computer on jeopardy leads me to believe that in the not so distant future, machines will be better at making medical decisions than the physicians that humanity has relied on since the dawn of civilization. The evidence base and obsessive outcomes research that we had hoped would improve our profession may end up making us obsolete at the hands of machines that can use the research more effectively.




Labels: , ,

Thursday, September 20, 2007

Opinion : A plan to get rid of undue Pharmaceutical influence

In the last two years or so, there has been a lot of progress and publicity on the issue of pharmaceutical companies influencing medical trials. This article in Slate adds some useful information to the debate by uncovering new insidious ways that pharmaceutical companies are wielding influence on science. While the author's solution of making journals follow the same disclosure that scientists do is a good start, I think that there is a much better way to solve the whole situation. The best way to promote full disclosure in the pharmaceutical industry is simply to require each pharmaceutical company to submit a detailed and itemized list of all the parties that they have spent promotional or development money on for each budget year.

I would imagine that this is neither a difficult solution to legislate, or to comply with. It could be a simple form that is attached to the company's regular SEC filings for each fiscal year. This would create a government mandate for public disclosure that could be reviewed by accountants and for which executives could be held accountable. I am sure that some place in each company there exists a detailed lists of expenditures so that each company can track how effective these are. I cannot think of any objections to the public interest for mandating that each company make these itemized reports available to the public. While I realize that few people would bother to look their doctor up, it would give activists and investigators an important tool to demand accountability of healthcare professionals. This tool would also enable stronger peer review as conflicts of interest would be readily apparent to other scientists and scientific editors.

Labels: , , ,

Opinion : Anti- Cancer Plan

For the election this year, Lance Armstrong called on candidates to have a plan to fight cancer. Despite the fact that cancer deaths are generally decreasing across the board, it is still a major problem, and I applaud him for bringing attention to it. However the only candidate to immediately come up with a plan was John Edwards, and this makes me sad. On the continuing theme that I could run this country better than John Edwards, here is the Chris Gange plan to fight cancer:

Prevention: the first step has to be prevention, as most cancer deaths are still from preventable causes.

- I would dramatically increase the amount of anti-smoking advertising and also raise taxes on cigarettes to help offset increasing health care costs.

- I would create a program to provide financial incentives for people to get cancer screenings, especially breast cancer, colon cancer, and prostate cancer. I believe that providing a small amount of payment would be very effective as it would save money in the long run, and also it would provide more incentive to lower income people who are more susceptible to not catching cancer in time.

- I would direct research money to practical applications, such as finding out why people are not getting annual screenings and attempting to remedy those problems with creative solutions. For instance if women find mammograms uncomfortable, I would have engineers determine ways to make the machines more user friendly. This type of research is likely to be far more cost effective in lives saved then the very basic cancer research that gets the vast majority of money now.

- I would also direct research money to finding more chemicals that are partial carcinogens, so that they can be regulated. While large companies lobby against this type of research, I believe that there are several target compounds worth researching, such as phthalates, and aromatic compounds. An independent advisory board would need to be set up to insure that lobbyists do not have influence overthe funding or reporting of this type of research.

- I would increase funding for HPV and hepatitis vaccines.


Education: the public needs to be better educated about the causes and ways to prevent cancer. This goes a long way with prevention.

- I would create a program to provide free counseling to people who are concerned that they may be at risk. There should also be computer models and public health interventions that find and target people with high risk and notify them of this.

- I would create a website and a hotline that would act as a clearinghouse of information on what causes cancer and the treatment and prevention options. This website needs to be user friendly and understandable by average people, however it must speak with the authority of government scientists and physicians and can't be influenced by independent, for-profit parties.

- I would create advertising campaign to educate people about common symptoms that may be associated with cancer so that they know to not ignore symptoms and go to a doctor before the problem gets out of control.


Treatment:

- Organize cancer treatment centers into local centers of excellence and centralize all cancer care at these centers. This would mimic the way that cystic fibrosis and some other more rare diseases are treated. While this would be a near impossible task with our current fragmented and competing healthcare system, this would yield significantly better outcomes, as repeated studies show that higher case volume improves individual patient outcomes. This would also allow for more specialization in the field of oncology and would make it much easier to compare outcomes across different geographic regions. Quality control stats would be made public and hold the centers accountable.

- Develop a protocol to provide palliative care for terminal patients, and fund research into this area.

- Create a database to track all types of cancer with respect to socioeconnomic, geographical and clinical stats. This data would then be made publicly available to facilitate researchers who look for trends. This would greatly improve our ability to spot clusters and identify new risk factors

- Fund research that follows survivors long term and provide follow up care to survivors. they are a growing but largely undefined segment as far as health care is concerned.

Labels: ,

Monday, July 23, 2007

Opinion : Smart people live longer

A study described in this article claims that people who are "medically illiterate" die faster (see study for more technical description). I tend to question whether "medically illiterate" couldn't just be replaced by the more genaralized "ignorant". I realize there is something to be said for following directions, and I realize that people who don't understand physicians may be good at understanding other things, but I think that in some of these academic studies, scientists miss the big picture.
A good example was a study at a brain aging conference last year where a researcher reported that people with higher mental abilities (which he measured by level of education attained) had less rapid brain deterioration over time. The scientist indulged some theory about "reserve" which he could neither measure of explain. Let me propose a more obvious theory (but alas, one that will not win any grant money): Smarter people do less stupid things. "Stupid things" in this case are actions which cause brain damage. Unfortunately, I cant find any study that shows that PhD's get into less bar fights or are less likely to be professional boxers, but the anecdotal evidence is there....
Back to the study on medical literacy, I can't think of how they could have separated the effect of not understanding medical directions vs the effect of not understanding other directions in life. If a patient doesn't understand "take twice a day", do they understand "use by 7/23"? Not taking antibiotics for a GI infection and eating spoiled food will have the same effect. The fact is that ignorant people frequently make choices that shorten their life compared to their peers. This is as clear today as it was to social darwinists in past centuries. We need to fix the problem through better education, and also by identifying who the susceptible people are and treating them differently. The different treatment must be in the benevolent sense however, otherwise the identification will lead to unfair discrimination.

Labels: , ,

Tuesday, July 10, 2007

Great Article : Autism is NOT caused by vacines

I had previously posted the reasons I have found that showed why vaccines don't cause Autism. Here are some more. This article suggests that maybe some people just jumped on the bandwagon because they could potentially get money out of it. Well no $#!t. The article doesn't even mention the fact that the money being wasted on this litigation could be going to research to find the actual cause of the disease. This is part of a disturbing trend of Americans embracing greedy lawyers and crackpots instead of science.

Labels: , ,

Great Article : Sicko and healthcare costs

While I admit that I haven't gotten around to watching sicko yet (I will need to pirate it because I am morally opposed to Michael Moore getting any of my money) my knee jerk reaction to the trailer was apparently shared with this slate writer. The irony of this documentary is that if he succeeds in causing an overhaul in the US health system, Michael Moore will help his worst enemy more than anyone else. Greedy American corporations, especially GM, stand to benefit the most from a European style healthcare system. It may surprise a lot of poor people in this country, but the brunt of healthcare costs are actually bared by businesses (as benefit expenses) as opposed to individuals (via taxes) as in European countries. The real Question here is are you willing to pay more taxes to help the sort of people in Moore's movie get better care? If yes, remember that you will be doing a huge favor to GM (especially its short term share holders), and Wall street pension managers. At least there can then be a Sicko 2... (or maybe a Richard and Me)

Disclaimer: I work at a huge for-profit hospital in a poor neighborhood.

Labels: , ,

Tuesday, March 20, 2007

Opinion : The cost of eating healthy

Dr Nunez, a brilliant womens health researcher, gave a great speech about health issues to my class today. There is one assertion in her lecture that I have to take issue with, however. This is the idea the the current economic incentive is for people to eat unhealthy foods, ie. fatty processed foods are cheaper than healthy items (fruits and veggies, etc).

This idea is pushed and reinforced by popular media, and especially retailers like Whole Foods, who clearly profit from it (generally by marking up prices on healthy items to increase their retail margin). This idea is also inferred based on epidemiological research showing that more poor people are overweight. (which is what I believe Dr. Nunez was referring to) Is it true though? Like so many other issues, the reality does not live up to the hype.

Take for instance my recent trip to the Reading Terminal market. A week's worth of fruits and veggies costs about $8. Apples were 59 cents /lb. , banannas were 39 cents/lb., and oranges were a quarter each. On the way out, I stopped to get a Philly cheese steak and some soda, total cost: $8.50. I was surprised that one unhealthy sandwich cost more than a week's worth of fruit. Also compare the fruit prices to red meat (2.99/lb and up), cheese (3.99/lb and up) and chocolate (8.99/lb and up). These prices are not much different from stores nearby such as Trader Joe's or Wegmans. Also at Trader Joes, fruit jerky bars at the counter (49 cents, I am eating one as I write this) are cheaper than chocolate bars (69 cents) . In Wegmans, the enriched wheat bread costs the same as the processed sugary white one. In Philadelphia at least, it seems to be much cheaper to eat a healthy diet of fruits and vegetables than junk foods. While certain types of healthy food (anything sold at whole foods) certainly costs a lot, Food prices and economics do not account for the reason that poor people have unhealthy diets.

Now I can't resist speculating on why poorer people would eat less healthy against their best interests. I suspect it has primarily to do with a lack of education among this demographic. When you don't know whats best for you, you will probably just take what tastes good. It may seem logical to pay more for foods that taste better, and if you are not concerned/educated about your health, you will make poor choices. Clearly advertising and fast food are contributing. I also suspect that there is a lack of access to healthy foods for poor individuals, as supermarkets tend to avoid impoverished areas (although both Trader Joes and the Wegmans near me border bad neighborhoods) It is easier to make bad choices when you are only faced with bad options.
A final reason for obesity among poor people may simply be a lack of self control. Quite frankly, if these people were more motivated and disciplined, they probably wouldn't be that poor in the first place. Of course public health researchers would never accept that reason because it shifts the blame to the people themselves, and for some reason, being poor alleviates personal responsibility...but that is another rant for another time....

Labels: , , ,

Friday, March 16, 2007

Opinion : High infant mortality rates in the US

Fact: The US has almost the worst infant Mortality rates in the developed world.


Proposed solution from healthcare industry: Throw money at it.

Proposed solution from liberal journalists: Universal healthcare

Reality check from pediatrician: (great article) Those two proposals would make the problem worse.

My take: That pediatrician is exactly right. Throwing money is not going to solve the problem, its going to make the system less efficient. The majority of infant mortality in the US is the result of premature birth or defects. The reality is that premature birth is caused by many random things, few of them medical. The most likely culprits for premies are underage mothers, obesity, and smoking. My question for the NY times would be:
What does fat, smoking teenage mothers have to do with healthcare financing?

Labels: ,

Friday, February 09, 2007

Opinion : Flirting with economics

I just finished reading the book Freakenomics, which has gotten me thinking of economics. Actually I always think in questions about numbers, I guess the book really has just inspired me to write about it. Anyway here are two examples, questions I had and the answers that I found:

___________________________________________________
First, Congratulations to Exxon Mobil, (EM) who announced last week that they had another record profit (just over $40 Billion). With Gas prices always fluctuating, (supposedly to help the sellers to cope with crude oil price changes) I was wondering how much profit that is per gallon of gas that EM sells. I figure if that profit just is a few cents a gallon, then they are entitled to it. If the profit share is significant however, I have to wonder if the competitive forces are efficiently regulating the gas market.

To find how much Exxon Mobil makes on a gallon of gas, I looked at their 2005 financial and operating review. For the year 2005, EM made $36.13 billion in profit for all operations. To find out how many gallons of gas they sold, I looked at the downstream sales number for the US, which is 621,960,000 barrels. Using a conversion factor of 31.5 b/gal, that comes out to a grand total of 1.5917 e10 (~ 15 billion - holy crap) gallons of gas sold in 2005. Dividing their profit by sales, EM managed to make about $0.54 in profit for every gallon of gas they sold in the US.

Now I realize that it is not fair to compare the total profit to one small segment of a global vertically integrated company (only 52% of EM gas sales are in the US), but that does make me wonder if a 3 cent hike for any given week is really necessary.

Other interesting facts: Exxon Mobil sells an average of just over 1 million gallons (1004828) of gas per year at each gas station. It sells 38.6 gallons per year per capita.

____________________________________________
My next inquiry came from reading that John Edwards proposed to establish Universal healthcare by simply buying plans for people who do not have insurance and paying for it by raising taxes. He claimed it would only cost $120 billion. Now I would never trust a round number from a politician, but that got me wondering how much it would cost to simply buy everyone health insurance.

To figure out the actual amount, I went to a health insurance comparison site and shopped around. Without community payments, our current system gives different prices to different people, so I attempted to estimate a per-person cost based on an average of the lowest (approx. me) and the highest (male smoker, 60yo, chronic disease) rates for plans in the Philadelphia area (fairly representative and average for nationwide markets) To eliminate under-insurance, I picked the cheapest plan that had a reasonable deductible (<$1000) and no coinsurance. This leaves us with the HMO offered by Aetna, which costs an avg of $338.31 per month or $4,059.72 /yr. (range $113.62 - $563 /month) (HSA plans were 50% cheaper but carried huge deductibles and are therefore not practical for older individuals or those with chronic disease) It is claimed that there are 47 million un or under-insured people in this country (I have no idea how they got that number, lets just roll with it) which means that to simply buy them all insurance it would cost $1.90806 e11 (~$190 billion ). To extrapolate per capita, it would cost $1.217916 e12 (~$ 1.2 trillion) to pay for insurance for everyone at current rates.

Now Edward's guess wasn't that bad (poloticians use wider tolerances than engineers...) although my calculated price would skew upward a bit if the uninsured population had more chronic illnesses or lived in more expensive markets, both of which are very likely. It is worth noting though that this price is less then half or national defense budget or current deficit, and wouldn't represent much of a tax increase to cover. Unfortunately health care costs are rising at almost triple the rate of inflation, so I doubt this would be a sustainable plan for very long without other measures. Also it would tempt businesses to offload their employee benefits on the government...then again, that could be the market way to establish a single payer system...

Labels: , , ,

Thursday, January 25, 2007

Opinion : More on Healthcare reform

Notes to 2008 presidential candidates: How to achieve universal healthcare.

No one is more for universal healthcare than I am, but we need to provide it in a way that makes economic sense. Laying off 1000's of American workers for the benefits of cost cutting does not make economic sense. There are many ideas out there that can save money, but throwing them all on at once will cause a disaster. Healthcare reform needs to be a gradual process that helps everyone and also contains costs. Here is my plan (most of which I stole from Ed Rendell's advisors)

Immediately:

The key here is to save just the amount of money that it will cost to cover the people who don't currently have insurance. First determine exactly how many people are under or uninsured, and how much it will cost to provide them with the minimum acceptable level of coverage. Then determine how much we are currently spending on care minus charity care and services to the uninsured. Take the cost to provide expanded coverage as a percent of total current costs and this is the amount that we will need to cut/find/raise in taxes.

The cuts at this point should be able to come with simple efficiency improvements to the system. This can include: going to centralized electronic records, requiring generic drug use, mandated error control and reporting procedures, outlawing competitive advertising, and limiting the amount of profit that private insurance companies can make based on payouts.

It is also important to establish long term health trends at this point that will stabilize costs. This can include smoking and trans fat bans (or any other public health measures), starting exercise programs, and beginning to negotiate pharmaceutical drug prices. If extra financing will be necessary (Pennsylvania claims it will, Massachusetts says it won't, who knows) then now is the time to pass the necessary measures, such as lotteries, sin taxes (alcohol, firearms, pollution, casinos and tobacco) or private insurance taxes.

In the near future:

The key in future years, once everyone is covered, will be to contain costs, improve quality, and expand services. The ideal cost increase per year should be roughly the rate of inflation (about 3%) plus the rate of population growth (around 1% depending on immigration laws). measures should be phased in slowly to decrease system wide costs each year. These include: geographic redistribution of resources, training more general practitioners, opening more nursing and urgent care clinics, implementing chronic disease management plans, expanding hospice, malpractice reform, negotiating cheaper drug and equipment prices, etc.

There should also be an effort to improve quality and access, mainly by education and out reach and by cracking down on under-performing operations.


In the long term

We need to move towards a more unified and non-profit, centrally planned health care system. As laws are passed and reforms are implemented, Growth and profit should be reduced industry wide and private companies will have motive to sell out. Eventually the goal should be to consolidate systems into non-profit or government run, vertically integrated units. The eventual goal should be Community based pricing by a single payer or a few non-profit payers, in a system organized and overseen by individuals who do not stand to profit from it. This will ensure that care delivery is fair and patient centered. I hope that this is not only a dream.

Labels: ,

Thursday, January 18, 2007

Opinion : Pennsylvania health care reform

Rendell's new plan is a huge step in the right direction, but it does have a few problems that I can see.

1. It doesnt address the fact that Pennsylvania has the highest malpractice rates in the US. This does not help the cost of healthcare...

2. It doesn't make the new employer programs mandatory (see Massachusetts). Why pay "only $180" per employee when you can pay $0. I am confident the Eagles will win the superbowl before Walmart (or any retailer) decides to buy 2000 employees healthcare out of the goodness of its heart.

3. Most of these programs require a huge initial investment (e-records, error reporting, chronic care plans), especially if they plan on pushing cooperation with incentives. It is not clear how these will be financed in the near term.

This is an amazing plan however. The community pricing, statewide smoking ban, e-records, and chronic disease management are all innovative and necessary reforms.

Labels: , ,

Saturday, January 13, 2007

Opinion : Prescription Drug Reform

The Congress is debating, and is close to passing, a Medicare-prescription drug reform bill. Part 1 of this bill requires the government to negotiate with the drug companies to lower the price of drugs to seniors. This is a very important and much needed law that is a good idea. Unfortunately for seniors, however, this law has a second clause. Another part of the bill would make it illegal for the government to use formularies in Medicare plans. The problem is that formularies are by far the most important tool the government has in pharmaceutical negotiations.

Think how the negotiations would unfold: The Government and the Pharm. reps are sitting at a table deciding drug prices. If say 4 companies make a certain class of drug (assuming similar efficacy profiles) then the government could pit them against each other by saying that only the cheapest will be included in the formulary. This would likely reduce the price to nearly cost, as drugs in competitive classes would be forced to compete. The problem with the current plan however, is that the government will not be able to limit any of the competitors. This will greatly reduce the incentive to compete amongst companies. Even if one company bids a lower price, how will the government make people use that drug? Remember that the government is now paying the bill no matter which drug people choose, so there is little economic incentive to take the cheaper option.

To make matters worse, this will also provide more incentive to Pharmaceutical marketing, as the race will be on to push consumers away from the newly low-price drugs and to make them request the higher price version. If market share is increased successfully (and recent history suggests it will) then the companies will now have even more power in those required negotiations. This just shows me further proof that the pharmaceutical companies are not simply bribing "ahem…lobbying " the republicans….they are bribing everyone.

And by the way, short of a single payer system, the best solution would have to allow both formularies and consumer choice…oh wait, that’s exactly what Medicare D is now…


Disclosure: I own stock in pharmaceutical companies and am currently helping one of them run a clinical trial.

Labels: ,