A Modest Proposal: Eliminate Patents on Drugs

I’ve heard from my libertarian friends of the beauty and efficacy of an open unfettered marketplace.  They maintain that regulation causes inefficiencies and the less there is the better.  In medicine there are necessary protections to assure safety (if not efficacy) of medical interventions.  But also there is a regulation that assures excess profits for drug developers, i.e. patents. 

The recent article in the New Yorker Ebolanomics highlights the costs of drug development and offers a new model for drug development. 

When pharmaceutical companies are deciding where to direct their R. & D. money, they naturally assess the potential market for a drug candidate. That means that they have an incentive to target diseases that affect wealthier people (above all, people in the developed world), who can afford to pay a lot. They have an incentive to make drugs that many people will take. And they have an incentive to make drugs that people will take regularly for a long time—drugs like statins.

Read the article for more.

In addition to trying to develop drugs that are used by “everyone” as noted in Ebolanomics, gouging the sickest patients to increase drug company revenue seems to be the alternative model of the drug development.  The excessive prices appear to be unlinked from development costs or  efficacy and are solely dependent on how desperate the patients are, the more malignant the disease the higher the cost.   Drug costs for cancer patients since the 90’s have increased by a factor of almost 100.  I recall new drugs in the early 90’s in the range of a few hundred dollars/dose.  By the end of the 90’s that cost was $1000/dose and with the advent of targeted drugs that cost is over $100,000/year. 

Medications have become the most expensive part of medical care.   A drug now costs more than that Mercedes you’ve been eyeing.  And if it were developed for cancer treatment as often as not it provides just a few months of benefit. 

Drug company costs are hidden behind a veil of secrecy and obfuscation.  Ironically the drugs that are really effective have the shortest development cycle and lowest cost to bring to market.  Consider for example the first targeted agent for chronic myelogenous leukemia,  imatinib (Gleevac).  The drug was developed with government provided research funds.  In it’s first clinical trial it’s efficacy and safety were immediately evident and it’s use revolutionized therapy.  It was immediately taken private and quickly became the most expensive drug on the market.  That despite the government funding and the short drug development cycle.  Charging $100,000 or so/year for it is not based on cost but rather greed.

On the other hand consider the numerous drugs with limited efficacy, i.e. drugs looking for an indication.  These agents are tested and tested and tested and eureka when a one or two month benefit is found, even if it’s a delay to progression with no survival benefit, it is heavily marketed as the second coming and sold for the same price as the truly effective agents, if any.  In this case costs are driven up by the drug’s lack of efficacy and need for many many many trials to find a use for it.

Medicynical Note:  Patents appear to have outlived their usefulness when it comes to drug development.  There is no incentive in the system  to provide value or for that matter efficiency.  Pricing has been delinked from development and marketing rules the roost.  Drug companies interest is in revenue, not healthcare.

Encouraging competition by eliminating patents will do away with the marketing nonsense.  A path to new and innovative drugs would need a new paradigm and the approach offered in Ebolanomics offers one approach.

Scams in Healthcare– a problem with capitalism?

It’s not enough that we allow drug companies to take advantage of their patent protection and overcharge, but we also have to deal with ye olde American revenue generating scams.  Unfortunately it seems to be in the American character to take advantage of non-regulation.  So drug companies without the restraint of negotiating prices with Medicare up the prices yearly without good reason, save their desire to maximize prices.  We, the U.S. pay more for drugs than any other country in the world.  Perfectly legal but very costly.

Similarly without regulation and oversight scams in Medicare occur.….

The wheelchair scam was designed to exploit blind spots in Medicare, which often pays insurance claims without checking them first. Criminals disguised themselves as medical-supply companies. They ginned up bogus bills, saying they’d provided expensive wheelchairs to Medicare patients — who, in reality, didn’t need wheelchairs at all. Then the scammers asked Medicare to pay them back, so they could pocket the huge markup that the government paid on each chair.

A lot of the time, Medicare was fooled. The government paid.

Since 1999, Medicare has spent $8.2 billion to procure power wheelchairs and “scooters” for 2.7 million people. Today, the government cannot even guess at how much of that money was paid out to scammers.

Read the article for full details.

Medicynical Note:  Who is to blame?  The scammers? or the regulators (and lack thereof) or perish the thought the patients ?  All to some degree.

We have a political party dedicated to decreasing regulation, still think that’s a good idea?  Perhaps the solution is to become libertarians and do away with  government intervention, including Medicare, Medicaid and all government medical programs including licensing, drug testing and development, patents, etc and let everyone compete.  A few people may die, collateral damage to our quest for deregulation, because they can’t afford care but perhaps the change will encourage honesty and truth through the “music” of the marketplace?  Or do we have a problem that money makes people do funny (not ha ha) things?

US Healthcare vs the World: It Ain’t Pretty

The Commonwealth Fund compares the non-system of healthcare in the U.S. with 11 other industrialized nations.  How do we rank?

The United States health care system is the most expensive in the world, but this report and prior editions consistently show the U.S. under performs relative to other countries on most dimensions of performance. Among the 11 nations studied in this report—Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States—the U.S. ranks last, as it did in the 2010, 2007, 2006, and 2004 editions of Mirror, Mirror. Most troubling, the U.S. fails to achieve better health outcomes than the other countries, and as shown in the earlier editions, the U.S. is last or near last on dimensions of access, efficiency, and equity. In this edition of Mirror, Mirror, the United Kingdom ranks first, followed closely by Switzerland

More here.

Medicynical Note:  Nothing new here, the weakness of money driven health care has been evident for years.  Our emphasis is on profits and revenue.  Healthcare?  Not the main concern of providers (the more you do the more you earn), suppliers, insurers and drug companies.  How else to explain our costs and problematic delivery of care.  Whether the Affordable Care Act will change this remains to be seen.  Sobering, but for the U.S. BUSINESS as usual.  Read the links for more information.


We Pay More for Health Care. Period.

Read this and weep.  We pay more for almost everything; have no better outcomes; have tens of millions without coverage; lead the world in medical related bankruptcy. 

Medicynical Note:  This is not rocket science.  The numbers tell the tale.  We pay more because our congress under the influence of the drug, hospital and health insurance lobbies has passed laws that allow and in some ways encourage the overcharging. 

And we’re stupid enough to pay.   And the republicans think this is the best system in the world.  The question is for whom?

Save a Trillion on Health Care—It’s not only feasible, it’s easy

Victor Fuchs tells us how to save a trillion on health care……by doing what other countries have done.

Americans spend more than 17 percent of GDP on health care; other high income industrial democracies spend only about 11 percent. The 6 percent difference in our $17 trillion economy amounts to $1 trillion..

The excess in the United States is primarily attributable to a more expensive mix of procedures and services, higher prices paid to drug companies and physicians, and inefficiencies in the financing of health care. There are undoubtedly cultural differences between the United States and other countries, but it is also true that Swedes differ from Italians, Germans from French, and the English from all of the above.

Read the article.

Medicynical Note:  Essentially we need to change from a revenue generating system to a health care system.  It’s that easy. 

In the U.S. at every level the emphasis is on increasing revenue rather than improving health care, even with the advent of health reform.  We overuse, over prescribe and over charge without any brake on expenditures.  To gain control and assure access and quality we have to figure out the riddle—most other countries have figured it out.  I’m not optimistic we that we can do it because of our religious-like dogged devotion to failed approaches. 

Health Care in France: Expensive takes on a new meaning

An American in Paris becomes pregnant and encounters a “socialized” health care system.  Does she survive?  Are there “death panels?”  Oh the horror.   Read here

Medicynical note:  Expensive is relative and the U.S. is relatively the most expensive.  No other country is close.  

We also have a large uninsured population now decreasing no thanks to our repub friends.  We also lead the industrialized world in that dubious category.  

The best healthcare system in the world?  Not us.

American Health Care: It’s the Money, Stupid

American health care is the best  i.e. the most expensive in the world:  See this to get an idea of the problem:

According to his bill, the hospital charged $81,000 for a four-vial dose of the medication.

Shocked at the price tag, Ferguson told the Charlotte Observer he and his wife found the same vials online for retail prices as low as $750.

Medicynical Note:  Health care value is an oxymoron in the U.S.  To these “providers” it’s the money that counts.

Quality, cost efficiency, access, good outcomes are not their primary issues.