It IS The Money, Stupid (Gilead– Solvaldi, Harvoni and Hepatitis C)

Make no mistake for the pharmaceutical industry, it’s the money that counts.   Gilead is now marketing two drugs for hepatitis C costing in the range of $80-100,000 for the pills alone.  That is over $1000/pill.

In the 90’s the drug companies discovered that people with serious life-threatening illness would pay anything for a “treatment” even if it was minimally effective.  They would pay more if the drug actually worked.

For years Pharma’s problem was that people with cancers were not so numerous as those with high cholesterol or high blood pressure  or even diabetes.  As such it was less rewarding to develop new drugs for these patients.  That limitation however became less of a problem  as the price of the drug increased to tens of thousands of dollars/year for the drug alone–and insurers paid.

Now Gilead appears to have hit the trifecta.  First they have a drug that appears to work in a majority of those afflicted.  Second they are charging $90,000/head for the treatment, and third there are millions of people afflicted.  What could be better?

Medicynical note:  The cost of this drug puts to rest once and for all the notion that drug companies have any interest in the well-being of their patients.  It IS the money.  There is little doubt that charging half or a quarter of their asking price would reward the company handsomely for their investment in this drug and provide stockholders a generous return.  BUT as is the case in our drug industry, why charge less when you can get away with more.  After all the disease is often fatal, insurers will pay and patients are desperate.  It’s perfect.

And the price is only about twice the median income (including physicians fees and lab expenses for a year) of people in the U.S.  Affordable, no.  But who really cares?


Ebola and CDC

The CDC’s Mission Statement:

CDC works 24/7 to protect America from health, safety and security threats, both foreign and in the U.S. Whether diseases start at home or abroad, are chronic or acute, curable or preventable, human error or deliberate attack, CDC fights disease and supports communities and citizens to do the same.

CDC increases the health security of our nation. As the nation’s health protection agency, CDC saves lives and protects people from health threats. To accomplish our mission, CDC conducts critical science and provides health information that protects our nation against expensive and dangerous health threats, and responds when these arise.

And in it’s wisdom congress (largely through republican efforts) has decreased the agency’s budget 10% since 2010.

2010: $6.467 billion
2011: $5.737 billion
2012: $5.732 billion
2013: $5.721 billion
2013 (after sequestration took effect): $5.432 billion
2014: $5.882 billion

Medicynic Note:  It’s a little like cutting taxes during a war (of course only madmen do that).

The Cleopatra Study (Her 2 Positive Metastatic Breast Cancer) Unprecedented Survival, Unaffordable pricing

What happens when there is promising technology for severe illness that is unaffordable? I’m guessing we’ll find out if the results of the Cleopatra study are applied to clinical practice.

The study noted:

Final results from the CLEOPATRA study show that the combination of 2 targeted agents, trastuzumab (Herceptin, Roche/Genentech) and pertuzumab (Perjeta, Roche/Genentech), significantly prolonged survival in HER2-positive metastatic breast cancer, compared with trastuzumab alone. The targeted agents were added to chemotherapy with docetaxel.

Patients treated with the combination plus chemotherapy lived 15.7 months longer than those who received trastuzumab and chemotherapy (median overall survival, 56.5 vs. 40.8 months; hazard ratio [HR], 0.68; P = .0002).

But there is a catch

An added concern is the high cost of dual HER2 inhibition at a time when oncologists are under pressure to contain costs. According to the New York Times, Genentech is putting the wholesale cost of pertuzumab at $5,900/month, which added to the typical $4,500/month costs of trastuzumab, would drive the cost of 18 months of treatment to $187,000.

And this pricing does not include  physician fees, imaging expenses, the cost of the additional chemotherapy (taxanes), laboratory and so on.

Medicynical Note:  The pricing for the two HER 2 blockers used in the Cleopatra study is three time the median income of families in the U.S.   Adding insult to injury, after this huge expenditure the patient is not cured.

The question is who will be able to pay for these drugs?  How will such care be funded by insurers?  And shouldn’t we be able to develop advanced approaches at more reasonable costs? 

As it is the U.S. pays more for everything in healthcare than other places in the world.  We are literally bankrupting ourselves individually and collectively.  There’s something terribly wrong in a health care “system” whose primary goal is revenue generation. 

It’s the Money Stupid! (Or Doctors play the lottery)

Medicine over the years has become increasingly entrepreneurial and money driven.  Health care, efficiency and value have become secondary aims  being overshadowed by the quest for money.   In health care, the product you are buying is not usually discretionary, predatory billing is common and an uninformed naive patient can literally lose his shirt.  These patients experiences while extreme are not unique.

Before his three-hour neck surgery for herniated disks in December, Peter Drier, 37, signed a pile of consent forms. A bank technology manager who had researched his insurance coverage, Mr. Drier was prepared when the bills started arriving: $56,000 from Lenox Hill Hospital in Manhattan, $4,300 from the anesthesiologist and even $133,000 from his orthopedist, who he knew would accept a fraction of that fee.


Patricia Kaufman’s bills after a recent back operation at a Long Island hospital were rife with such charges, said her husband, Alan, who spent days sorting them out. Two plastic surgeons billed more than $250,000 to sew up the incision, a task done by a resident during previous operations for Ms. Kaufman’s chronic neurological condition.

Read the article for more details.

Medicynical Note:  Medicine is simply following the lead of a deregulated culture that seems to believe that anything  goes and that in time the problem will sort itself out.  In health care that policy has left a trail of people who are “uninsurable”, neglected medical problems, medically related bankruptcies (we lead the world), exploding  costs and a non-sytem of  care whose primary focus is generating revenue. Some drug costs have increased 1000 percent in the past 30-40 years…has your salary kept up? 

The Affordable Care Act is already helping but we should not underestimate the reactionary forces that believe the money driven non-system is the “best in the world.”

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.