Category Archives: General Cynicism

Tax Burden, Health Care: Europe vs the U.S.

Nice article in the NY Times by Bruce Bartlett on the policy choices, taxation and health care, comparing the U.S. and other OECD countries. He notes:

1. The U.S. has very low taxes by international standards:



2. The difference in taxation is to a great degree the payment of health care costs in most industrialized countries by taxation and cash payments (family allowances) made to families in most Euopean countries.

He notes the impact of such payment on taxes:

The impact on the tax burden can be dramatic if one views family allowances as negative taxes. For example, in Luxembourg, an average married worker with two children pays a nominal income tax rate of 16.5 percent (including state and local income taxes), while an American in the same situation would pay 5.2 percent. But once family allowances are subtracted from the Luxembourg worker’s income-tax payment, the effective tax rate falls to just nine-tenths of 1 percent. (Medicynical note: lower than the U.S. )

3. Regarding health care in the U.S. national health insurance covers 72% of expenditures in other OECD countries and just 46.5 % in the U.S.

4. The U.S. pays more for health care than residents in any other major country. And the government share of current health spending that in the U.S. covers a just minority of citizens…

is about the same as total health care costs in many other countries, including (as a percentage of G.D.P.) Luxembourg (6.8 percent), Israel (7.8 percent), Japan (8.1 percent), Britain (8.4 percent) and Norway (8.5 percent).

That is, the proportion of GDP we spend now for just those on medicare, and medicaid in the U.S. non-system covers the total health costs in other countries. We are one of the least efficient, lowest value health care “systems” in the world. Exceptional!

Read the article, it’s short and clear.

Medicynical Note: The solution being offered by Ryan, provides less coverage for those in medicare and medicaid; does nothing about the 50 million uninsured. It will likely cut costs but also cut care provided and result in the deaths of our citizens. Amazingly modest proposal.


Drug Patents: Part of the Problem

Dean Baker in the Guardian, notes the obscenity of drug pricing and Senator Sanders’ solution.

We can do better – and Senator Bernie Sanders has proposed a way. He has introduced a bill to create a prize fund that would buy up patents, so that drugs could then be sold at a free market price. Sanders’s bill would appropriate 0.55% of GDP (about $80bn a year, with the economy’s current size) for buying up patents, which would then be placed in the public domain so that any manufacturer could use them at no cost.

Medicynical Note: Unlikely to happen but might put pressure on manufacturers to more reasonably price drugs.


Avastin; Ovarian Cancer 2.4 months Delay of Progression for $100,000

What’s missing from this week’s American Society of Clinical Oncology (ASCO) meeting is analysis of costs. Yesterday we noted exemestane prevented one cancer for 1.1 million dollars spent.

Today we have the story that Avastin is useful to extend the lives of ovarian cancer patients 2.4 months for an estimated $100,000 (cost of one year’s treatment with the drug) plus the expenses of other chemotherapy, doctors visits, and imaging studies–probably another $50,000. Abstract of study here.

The trial enrolled 1,528 women with newly diagnosed ovarian cancer, of whom 90% had advanced disease, Kristensen reported.

They were treated over an 18-week period with a standard chemotherapy regimen of carboplatin (Paraplatin) and paclitaxel (Taxol), with or without bevacizumab.

Patients who were treated with bevacizumab also had maintenance therapy with bevacizumab for another 36 weeks, while those in the other arm were simply observed.

The primary endpoint of the study, he said, is progression-free survival and on that measure, women in the bevacizumab arm had a 13% benefit, which was significant at P=0.039.

For those women, the median time to progression was 19.8 months, compared with 17.4 for those in the control arm, he said.

It was also noted in a quote from the author of the study Gunnar Kristensen that “Overall survival, he said, was less clear”

Medicynical Note: This was a drug company (Roche) sponsored study–Kristensen has a financial relationship with Roche. It’s probably too much to hope that the cost of the intervention would be mentioned, much less factored into the discussion of the results.


Exemestane Prevents Breast Cancer? Maybe. Costly? Definitely

This is the week of the American Society for Clinical Oncology’s meeting so we can expect to inundated with news of medical progress, some real, some maybe real, some imagined. But all can be expected to be costly.

One of the most publicized studies is that of using exemestane (Aromasin) to prevent breast cancer in women at moderately increased risk. 4560 women were randomly assigned to a group using the drug or to placebo. The abstract from an article on the study published this week in the NEJM states:

At a median follow-up of 35 months, 11 invasive breast cancers were detected in those given exemestane and in 32 of those given placebo, with a 65% relative reduction in the annual incidence of invasive breast cancer (0.19% vs. 0.55%; hazard ratio, 0.35; 95% confidence interval [CI], 0.18 to 0.70; P=0.002). The annual incidence of invasive plus noninvasive (ductal carcinoma in situ) breast cancers was 0.35% on exemestane and 0.77% on placebo (hazard ratio, 0.47; 95% CI, 0.27 to 0.79; P=0.004). Adverse events occurred in 88% of the exemestane group and 85% of the placebo group (P=0.003), with no significant differences between the two groups in terms of skeletal fractures, cardiovascular events, other cancers, or treatment-related deaths. Minimal quality-of-life differences were observed.

The drug has fewer side-effects than other agents used to prevent breast cancer (tamoxifen and the aromatase inhibitors) but still in 3-4% of patients severe joint pain was reported.

Medicynical Note: Exemestane (Aromasin) costs about $3600/year. In this study about 2280 (half of the number randomized) patients were treated with exemestane for three years and according to the study 21 fewer cancers occurred than in the placebo group. This reduction of incidence from 32 in placebo to 11 given drug was cited in news articles as a “65% reduction in cancer occurrence.”

The cost of this preventive strategy/case prevented is $3600 (yearly cost) X 3 (number of years treated) X 2280 (number of patients treated)/ 21 (number of cases of cancer prevented) and was $1,172,571/case prevented.

In fact, relatively few cancers occurred in either group (32 and 11). The reduction of 21 cases was significant but the cost/cancer prevented is prohibitive. Given that these patients will also be followed with mammograms and physician exams (adding to the cost) it’s doubtful that this intervention will lead to a measurable survival benefit.


Cancer Care Costs

Nice article in NEJM on an approach to limiting the cost of cancer care:

The authors note that cancer care costs are rising rapidly and are unsustainable:

from $104 billion in 20061 to over $173 billion in 2020 and beyond.2 This increase has been driven by a dramatic rise in both the cost of therapy and the extent of care. In the United States, the sales of anticancer drugs are now second only to those of drugs for heart disease, and 70% of these sales come from products introduced in the past 10 years. Most new molecules are priced at $5,000 per month or more, and in many cases the cost-effectiveness ratios far exceed commonly accepted thresholds. (medicynical emphasis) This trend is not sustainable.

The authors suggest five strategies to control costs. They are basic and can be easily incorporated into oncologic practices. Whether they will be adopted or not is an open question. Read the article!!



Abiraterone (Zytiga), Provenge — New Overpriced Approaches to Prostate Cancer

It’s remarkable how insensitive to price we are in medicine, particularly when the illness is severe and likely fatal. You may say well that’s appropriate as there is no price one can place on life. The big drug companies, however, sensing this “weakness” cannot resist taking advantage.

In the case of Provenge, proven to increase median survival 4 months, the charge is $93,000. In the case of abiraterone a hormonal blocker (blocks androgen biosynthesis more completely) the cost will be in the range of $5,000/month with a median survival benefit of about 4 months.

After a median follow-up of 12.8 months, overall survival was longer in the abiraterone acetate–prednisone group than in the placebo–prednisone group (14.8 months vs. 10.9 months; hazard ratio, 0.65; 95% confidence interval, 0.54 to 0.77; P<0.001). Data were unblinded at the interim analysis, since these results exceeded the preplanned criteria for study termination. All secondary end points, including time to PSA progression (10.2 vs. 6.6 months; P<0.001), progression-free survival (5.6 months vs. 3.6 months; P<0.001), and PSA response rate (29% vs. 6%, P<0.001), favored the treatment group. Mineralocorticoid-related adverse events, including fluid retention, hypertension, and hypokalemia, were more frequently reported in the abiraterone acetate–prednisone group than in the placebo–prednisone group.

Medicynical Note: It’s wonderful that there are options for prostate cancer patients that appear to have some benefit. It’s not wonderful that the cost of these innovations exceed the yearly income of most Americans. One wonders who would be able to pay for such advances if Medicare (insurer of most patients with prostate cancer) became a voucher system that didn’t fully cover the treatment, or failed outright.

Our non-system of health care is in crisis. The Obama administration has passed a plan that will moderate Medicare costs by using care more cost-effectively and cover most of our population. Patients would always have the option of paying themselves for whatever care they desired if not covered by Medicare.

The republican counter plan does nothing for the uninsured. It appears to provide vouchers for Medicare recipients without certainty that those with illness will be able to afford either the insurance or the associated deductibles and co-pays.

In the end, I guess we’ll get what we deserve.

Meanwhile the pharmaceutical industry overcharges those with the most severe illnesses to assure their continued excessive profits. As a result, costs of drugs continue to increase at several multiples of inflation, even during the “great recession.”

Addendum: June 9: Additional results of this study presented at the ASCO meeting claims better results than in the abstract:

Overall survival in the phase 3 trial was 15.8 months in the abiraterone group and 11.2 months in the placebo group (P < .0001); median follow-up was 20.2 months, said investigator Howard I. Scher, MD, from Memorial Sloan-Kettering Cancer Center in New York City, at a press conference.

Quite modest improvement given the price.

I’m remain amazed that medicine has come to drugs costing $5000/month with very limited benefit. No wonder the “systems” are failing–our national financial system, our health care non-system, and the world’s view of intellectual property rights. Overpricing in the long run leads no where, and that appears to be where we are going.


Insurance Costs More for Cancer Patients: The Ryan Plan formalizes Economic Rationing

The Ryan plan for cutting Medicare costs will cut some costs but  undoubtedly will also cut coverage and  increase out of pocket expenses, particularly for those with serious illness.  The Journal of Clinical Oncology documents this effect in this article on insurance coverage for cancer patients. The article notes:

The risk of high burdens is significantly greater for patients with cancer compared with other chronically ill and well patients. We find that 13.4% of patients with cancer had high total burdens, in contrast to 9.7% among those with other chronic conditions and 4.4% among those without chronic conditions. Among nonelderly persons with cancer, the following were associated with higher out-of-pocket burdens: private nongroup insurance, age 55 to 64 years, non-Hispanic black, never married or widowed, one child or no children, unemployed, lower income, lower education level, living in nonmetropolitan statistical areas, and having other chronic conditions.

Medicynical note:  As people age the prevalence of illness dramatically increases.  Many of the elderly, if not most, would be denied insurance in the current private market or be offered insurance that is priced so high that it would be unaffordable and/or inadequate.  Ryan’s plan makes no accomodation for elderly patients with medical problems, throwing them into the individual market.  It will formalize economic rationing of health care and penalize most severely the elderly who have limited or no health care savings.

In doing this the U.S. would (un) distinguish itself from all other industrialized nations who provide health coverage to all citizens regardless of illness and age.

So not only do we pay more for health care than any other country in the world but also provide the least comprehensive coverage for those who need it most. 

Incomes and Health Care Costs Seriously Out of Balance

Incomes in the U.S.:


50th percentile for household income in the U.S. is $42,327 down significantly over 10 years. Meanwhile health care costs have more than doubled.

Medicynical Note: Compare the incomes earned in a year with the cost of recent drug advances, . Provenge for example is $93,000; Benlysta for Hep C is in the range of $50,000; Yervoy for melanoma $120,000. There are many more in this price range, most of which offer only slight benefit to patients compared with less expensive conventional therapies.

PHama’s pricing is irrational when compared with median and average incomes and their rate of growth. Somehow through creative marketing, lack of serious price negotiation, lack of competition, lack of concern regarding cost/efficacy and poor price controls in out insurance products, we’re bankrupting ourselves.

When the story of this era is written there will be disbelief, similar to that regarding the tulip bubble, that it ever happened and that it was allowed to happen.

Incivek For Hep C

Vertex Pharmaceuticals received FDA approval for their hepatitis C drug Incivek. It appears to be a very effective agent when combined with standard therapies.

In clinical trials, patients were treated with a combination of Incivek and standard therapies for 12 weeks. They continued on the standard treatments for another 36 weeks, but many of them were cured within 24 weeks. Vertex said about 79 percent of previously untreated patients were cured after treatment with Incivek. The drug was also much more effective in patients who had relapsed, had some response but not a cure, or had no response to other drugs.

And the cost:

The company says a 12-week course of treatment will cost $49,200, (Wholesale price) compared to $30,000 for standard therapies.

Medicynical Note: This appears to be an effective approach to a disease which heretofore has been difficult to manage. The cost, however, is prohibitive, particularly when one consider the additional expense of combining it with standard therapies.

The manufacturer expects it to generate billions of dollars in income but a big question is how to pay for it. Insurers have difficulty raising rates; most individuals don’t have $50,000:  and our non-system is approaching financial bankruptcy.

One would hope that instead of billions in profits the emphasis would have been on  millions cured. But then that’s the American medicine in the twenty-first century.

Cancer Drug Costs: More Economic Rationing

The Wall Street Journal notes the expense of cancer drugs and the inability of people and our non-system to pay the price.

Two pieces of news out this week underline this point, and its consequences. Medco’s Drug Trend Report says that the oncology-specialty drug market, i.e. targeted therapies, could increase total cancer-drug spending by about 15% annually through 2013. That’s partially because of increased use, but mostly because the cost of the therapies themselves are rising.

And:

Some 16% of patients had an out-of-pocket cost of greater than $500. And one in four of those patients “abandoned (medicynical emphasis) the prescription and did not follow up with another oncology medication within 90 days,” the researchers write. Lower income and Medicare coverage were also associated with a higher abandonment rate.

And:

A study published jointly this week by the Journal of Oncology Practice and the American Journal of Managed Care finds that 10% of patients failed to fill new prescriptions for oral cancer drugs. The research will also be presented at ASCO.

Medicynical Note: The Journal won’t call it so, but this is evidence of more economic rationing in our non-system.

The most amazing part of this story is that these new “targeted” drugs, while advances, have only a modest effect on survival of patients…..but a tremendous effect on the bottom lines of pharmaceutical companies.

They are a tour de force of scientific progress and creative marketing. But as to patient care and improved outcomes, only a slight benefit–while bankrupting individuals and the non-system.

We need to insist that we don’t pay more for these “advances” than other countries in the world.   The power of the government in providing patent protection, for a generation, should be used to assure that drugs are priced realistically and competitively.