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A drug company’s goal is to increase revenue.  Cost efficiency, value for the money?  Not their department. 

On Feb. 10, Valeant Pharmaceuticals International Inc.bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%.

Medicynical Note:  Health care in case you didn’t notice is a perfect set up for blackmail.  The companies have something you think you want, something that you have been told you must have in order to survive.  Insurers are a buffer and in part delay the effects of price increases on drugs and pay the increased prices.  So companies raise prices whenever and however they can.  They think they can get away with it so they do it.

How else to explain the above increases?  How else to explain the fact that today we are paying in multiples of our median and average incomes for a single medications which  most often are  of modest value.  Panaceas?  Cures?  Not these.  But cash cows for Big Pharma and investors, yes.

What about regulations on prices?  What about some pay back for government funded research?  Both were given away by congressmen/women who guess what, receive lots of money from drug companies.  It’s a corrupt vile system.  But really it’s just business…….as usual.

Yet another mind boggling adventure in the American healthcare.

Jennifer Huculak-Kimmel, a Saskatchewan resident and Canadian citizen, was six months pregnant when she and her husband, Darren, decided to travel to Hawaii on vacation. She checked with her doctor, who said it would be fine to take the trip, and bought travel insurance just in case. When her water broke and she had to be airlifted to a Honolulu hospital, she should have been able to take advantage of her six weeks of mandatory bed rest, reassured that she had taken the right steps to ensure proper healthcare coverage. Right?

Wrong.

After about a week in the hospital, Blue Cross contacted the couple to let them know that their coverage had been denied because of a preexisting condition — a bladder infection that had not threatened the pregnancy. The insurance company maintained its stance, despite the company receiving a letter from Huculak-Kimmel’s Canadian doctor ensuring them that the pregnancy was not high-risk. They would be responsible for the hospital bill, which, due to the baby’s premature birth and critical condition (the baby had to stay in a neonatal intensive care unit, which cost more than $10,000 per day) had risen to $950,000.

Medicynical note:  Another unique adventure in health care in the United States.  The only country in the industrialized world with a category of bankruptcy related to health care expenses.  

And our republican friends support the right of insurers to deny coverage if you are sick (pre-existing illness).  Yet another sign that our health care system isn’t about health care but rather about money.  Yet another example of American exceptionalism.

Terrific article in the Journal of Clinical Oncology from May 6, Cancer Drugs in the United States: Justum Pretium—The Just Price by Kanturjian, Fojo, Mathisen and Zwelling .  The point of the article is that there is a disconnect between cancer drug prices and efficacy.  The authors propose a value based system for drug pricing. 

The paper notes the size of the U.S. health market, 2.7 trillion dollars/year, and the fact that we spend 18% of GDP on health care, $8,000/year/person.  This compares unfavorably with the costs in other industrialized countries which are at 6-9% of GDP.  When one considers the relative competitive advantage of one economic setting with another, this disparity is damning to U.S. competiveness. 

Yet the drug industry’s main goal is not an improvement in health care, or health care costs, but rather increased profits.  They have the protection of a generation long patent monopoly and the sky’s the limit if they can market the drug, even mediocre drugs, aggressively to users and physicians.  The point of the article is that physicians have some responsibility to look at prices and efficacy when prescribing.  They make the case for the revolutionary (sic) concept that there should be “value” in medicine.

They note:

  The prices of new anticancer agents seem to be decided by pharmaceutical companies according to what the market will bear.There is little correlation between the actual efficacy of a new drug and its price, as measured by cost-efficacy (CE) ratios, prolongation of patient life in years, or quality-adjusted life-years (QALYs).Compared with a decade ago, the price range of newanticancer agents has more than doubled, from$4,500 to more than $10,000 per month

Drug companies maintain that it now costs a billion dollars to bring a new drug to market.  This is an entirely made up figure without documentation and apparently includes “ancillary expenses, salaries, bonuses, and other indirect costs not related to research or development as well as an 11% compounded discount rate over 10 years based on stock market returns on capital investment.”  Yes 11%/year.

In the 70s cancer drugs cost a patient a couple of hundred dollars/month.  The price didn’t change much until the 90’s when new drugs approximated $1000/month.  By the early 2000’s prices were rapidly increasing so that today we’re in the range or $10,,000-$20,000/month and more for drugs, often of limited, if any, efficacy.    What’s missing from is the reality of a competitive market.   With the government handout of patent protection, drug companies have little competition or incentive to price new medications realistically.   It is a fact that we lead the world by a wide margin in the price we pay for most new cancer drugs

Other countries have kept their costs down by simply telling drug companies no on their pricing.  The companies then do the reasonable thing and charge less in order to be able to get into that countries market.  Guess what, they still make money, and lots of it.   In the world market, the U.S. is the big stooge, paying whatever is demanded without considering  value or for that matter the actual cost of development—but that’s another story. 

Medicynical Note:  Health reform will moderate drug pricing over time as we eventually adopt an approach that discriminates in favor of treatments that actually work. We need to  understand that costly drugs are not necessarily better.

Great series on costs in the NY Times by Elisabeth Rosenthal here and here.

Nice discussion of the issue with Rosenthal on Fresh Air at this link .

Medicynical Note:  Why do hospitals, equipment suppliers, and drug manufacturers charge so much?  Because they can.  There is no competition in our non-system of health care.  Rather the deck is stacked to favor everyone but the patient. 

In Belgium, and virtually all other industrialized nations,  the health care system limits what  suppliers can charge. 

Amazing

America’s health care non-system is the place where the “most informed” believe they have the least responsibility.   It’s everyone else’s fault.  So says the recent JAMA (Journal of the American Medical Association) study Views of US Physicians About Controlling Health Care Costs

A total of 2556 physicians responded (response rate = 65%). Most believed that trial lawyers (60%), health insurance companies (59%), hospitals and health systems (56%), pharmaceutical and device manufacturers (56%), and patients (52%) have a “major responsibility” for reducing health care costs, whereas only 36% reported that practicing physicians have “major responsibility.” Most were “very enthusiastic” for “promoting continuity of care” (75%), “expanding access to quality and safety data” (51%), and “limiting access to expensive treatments with little net benefit” (51%) as a means of reducing health care costs. Few expressed enthusiasm for “eliminating fee-for-service payment models” (7%).

Read the article.

Medicynical Note:  The irony is that those who are (used to be) the most informed claim least responsibility for the mess that is our non-system of care.  Physicians have abdicated everything except keeping the current fee system intact.

The questionnaire was a loaded one with obvious “right” answers.  for example

Most physicians reported being “aware of the costs of the tests/treatments [they] recommend” (76%), agreed they should adhere to clinical guidelines that discourage the use of marginally beneficial care (79%), and agreed that they “should be solely devoted to individual patients’ best interests, even if that is expensive” (78%) and that “doctors need to take a more prominent role in limiting use of unnecessary tests” (89%). Most (85%) disagreed that they “should sometimes deny beneficial but costly services to certain patients because resources should go to other patients that need them more.”

The problem is that most of the “new” agents in medical oncology, for example, offer limited benefit, that is, in most cases of advanced disease the treatment will give a month to a few months survival benefit and only occasionally provide longer term survival.  At over $100,000/year the cost of the buying, if you will, an additional year of survival, is in the hundreds of thousands of dollars/QALY.  

It used to be, that such drugs were cheap (5FU) in colon cancer in the 70’s and 80’s.  ($10-15/dose–you read that right)  In such a case you could try the drug anyway you wanted.   If they worked great (about 10% of patient’s responded) if it didn’t you did not bankrupt the patient, insurer or system. 

Someone has to be responsible in the new era of mega-expensive medications.  It’s clear that physicians have punted and that the pharmaceutical industry is only interested in their bottom line.  Insurers simply pass through the costs.  So it’s left to government.

The American way of Birth is the costliest in the world.  In part this is because insurers are reluctant to provide policies that cover pregnancy and delivery.

Though Ms. Martin, 31, and her husband, Mark Willett, are both professionals with health insurance, her current policy does not cover maternity care. So the couple had to approach the nine months that led to the birth of their daughter in May like an extended shopping trip though the American health care bazaar, sorting through an array of maternity services that most often have no clear price and — with no insurer to haggle on their behalf — trying to negotiate discounts from hospitals and doctors.

The bottom line is that our families  pay two to three times as much for their babies as in any other country in the world.  And if you are without coverage you are more or less at the mercy of the hospitals and providers.  They will charge their “list price” (the MSRP or the used care salesman’s asking price) rather than offering the negotiated price, i.e. that given insurers.

But it’s worse than just money.

Medicynical Note:  In a money driven health care non-system the emphasis is on making money than saving lives and providing quality care to those who need it.

Read the article to find out just how bad our approach is.  Once again we lead the world, in costs.  We are number 1.

This is not strictly a medical topic but does reflect the incompetence of our congressional leadership and members, mainly republican.

The point of sequestration was to force congress and the executive into making difficult budget choices in a budget.  Republicans in congress decided it was easier and in a perverse way better for them to simply accept the 10% across the board cuts in the sequestration than negotiate with a Democratic president.  .  The  executive branch warned of the impact both before and after it’s passage. .  Republicans in Congress ignored the warnings and now are claiming ignorance…and they are right.

This is frankly embarrassing in the leader of the free world…..it’s more like what happens in those “socialist” countries in Europe.  Actually it’s worse because of the wilful stupidity.

He said that he and others at the Transportation Department had been warning since February, before the sequester took effect, that it would cause layoffs that would create air traffic delays, adding that the agency had done everything it could to limit the impact.

And:

But Mr. Rogers insisted, “You didn’t forewarn us that this was coming; you didn’t ask advice about how we should handle it.”

Medicynical note: I wouldn’t trust a repub congressman to drive a car, much less run the country.  Too bad they can’t be sued for malpractice.

This company has claimed better results from their treatment approach.  If it’s too good to be true, it probably isn’t.

It turns out their approach is to not accept patients unless their insurance is “preferable.”  They minimize Medicare and Medicaid patients in their population—unlike other facilities.  They arbitrarily don’t accept certain patients.  They don’t report on patients who do not receive all their treatment at their facility.  As a result when they report outcomes the results are skewed by small numbers and careful patient selection.  They are under pressure to change as noted in the article.

Hilborn had seen CTCA’s website touting survival rates better than national averages. His call secured Vicky an appointment at the for-profit, privately held company’s Philadelphia affiliate, Eastern Regional Medical Center. There, the oncologist who examined Vicky told the couple he had treated other cases of histiocytic sarcoma, the cancer of immune-system cells that she had.

“He said, ‘We’ll have you back on your feet in no time,'” Keith recalled.

Vicky’s cancer treatment was forestalled by an infection and other complications that kept her at Eastern Regional for three weeks. In July 2009, when she got back home, things changed. Despite Keith’s calls, he said, CTCA did not schedule another appointment. As his wife got sicker, Keith, a former deputy sheriff in western Pennsylvania, was reduced to begging.

Read the article to get the full flavor of this type for profit beast. 

Medicynical Note:  What’s missing is an accounting of cost of treatment at this facility that provides “free transport” and limos to their hospitals.  It’s little wonder that medical care is bankrupting us.  More on this in Brill’s recent Time essay. 

In fact there is no magic in cancer treatment.  The reality, bad cancers that have spread have bad outcomes, with few exceptions.

No this is not the “gospel of hope,” but it is the truth.