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This article touches on some of the problems in patent monopoly.

The problem in the pharmaceutical industry is truly onerous. It has resulted in less than optimal health care in our culture and, with the tariff demanded by patent holders, is redistributing wealth in our society.

The articles in the Post were graphic and sadly true. The military’s hospital system provided insensitive, substandard care to our returning injured soldiers. Denial of the seriousness of the problem by the Surgeon General of the army indicates his own insensitivity and perhaps incompetence to administer a military health care system.

He said yesterday: “that the problems at Walter Reed were neither widespread nor symptomatic of a system that has “abandoned soldiers and their families.”

The Surgeon General also accused the Post of being one sided. His notion apparently is that health-care ends at the inpatient hospital door, not recognizing as fact that his system keeps recently returned gravely injured soldiers (two interviewed last night on Jim Lehrer’s program) as outpatients and suffocates them with miserable depressing surroundings, stifling bureaucracy and martinets who force the injured to play soldier (having to report to morning assembly). Quite bizarre and deserving of a firing in my view. Though this outfit will probably award the Surgeon General a “heck of job” and the medal of freedom.

It’s in vogue for defenders of the status quo in health care to downplay WHO statistics that show our infant mortality, longevity and disease morbidity statistics are mediocre. The arguments blame the diversity of our population–we have groups with higher rates of certain diseases and hence higher morbidity and mortality. 

David Hogberg (of the The National Center for Public Policy Research) for example, is quoted :
“……..we are ranked 16th on total deaths (that’s pretty close to 15th, so let’s assume that the press release got it basically right). We rank just above last on diabetes.”

“The problem, though, is that the statistic is “age standardized death rate per 100,000.” In other words, the death rate is adjusted only for age of the population, not for any other factor. That matters because the U.S. has a much higher population of people of African descent than those other nations, a population that is at much higher risk (see here and here) of diabetes and heart disease than the white population. Were the different racial makeup of these nations accounted for, the numbers would probably look much different.”

It certainly possible that the WHO statistics don’t take all population factors into account. But while we have racial diversity and extremes of wealth and poverty in our population other countries have similar problems and other types of diversity. At one time Finland has the highest rate of Coronary Artery Disease but their health care system effectively intervened and the situation is much improved. Similarly, Japan and China have high rates of GI cancers.

What cannot be denied is that we spend 50-100% more on health care expressed either as % of GDP or in terms of per capita spending than any other industrialized country. In return for this investment we get a non-system of care which does not provide for 47 plus million citizens (the uninsured) and provides mediocre results.

This on health care expenses. I wanted to put the whole article here but in fairness you should read it on the Washington Post site. “There is a relatively modest and stable projection for 2006 to 2016, with an average growth rate of 6.9 percent,” Medicynical note: Huh?? 6.9%/year is not modest!!

“Karen Davis, president of the Commonwealth Fund. “There was a lot of feeling when the 2006 numbers came out and we were growing at about 7 percent a year, that maybe it wasn’t a continuing problem. But, I think even growing at 7 percent a year you see that by 2016 we are going to be spending 20 percent of the nation’s economy on health care.”

On drugs the data shows an almost 7% increase. Compare this with inflation.

“That (Medicare D) has helped hold down prices even as more seniors are able to get drugs, John A. Poisal of the CMS said in a briefing. National spending on prescription drugs was expected to rise to $214 billion in 2006, from $201 billion in 2005. But that increase is 0.4 percentage points less than it would have been without the new drug benefit, he said.”

“U.S. Labour Department–“Medical care costs rose 0.8 percent in January and are 4.3 per cent higher than a year ago. The index for medical care commodities prescription drugs, nonprescription drugs, and medical supplies-increased 0.6 percent. The index for medical care services advanced 0.9 percent.” On an annual basis, in fact, American health care costs are rising faster than any other set of prices in the economy.”

Suffice it to say the news is depressing, not reassuring. An increase in prices of 4.3% is twice inflation, add this price increase to the increase in demand for care of 6-7%/year and you may start to understand the problem. Prices and demand are increasing. Unless something is done we will literally eat ourselves alive–and really need health care. This is particularly alarming since we already outspend the world for healthcare by 50-100%. As I noted a few days ago, if we were a company we’d be criticized for being wasteful and inefficent and non-competitive with our comparators. We need a cost revolution in health care

Nothing like a press release picked up by Yahoo and then by Google News to get out the word!!

The title–Emerging Majority’s Health Is Being Ignored: Foundation Questions Value of Government Negotiation of Drug Prices. The article questions the effectiveness of the Medicare drug plan (Medicare D) based on the restriction of choice–see position paper here.

This nice bit of obfuscation is from the National Minority Health Month Foundation (which is in the process of changing its name to The National Minority Quality Forum). Given that most see Medicare D, while not perfect, as a net positive in providing seniors and by inference “minorities” more affordable medication, the Foundation’s analysis seems medicynical.

One of our themes has been conflicts of interest in health care. It therefore came as no big surprise that the National Minority Health Month Foundation’s “leadership” includes Newt Gingrich, J.C. Watts and the following list of health care companies–for the most part pharmaceutical companies that long opposed Medicare sponsored drug plan (Part D) for seniors and now oppose negotiating prices with drug companies:

“Sponsors of the Summit , included: American Medical Association, Abbott Laboratories, AstraZeneca, Bristol-Myers Squibb, Eli Lilly and Company, Kaiser Permanente, McKesson Health Solutions, Medco Health Solutions, Merck & Co., Ortho Biotech, Otsuka America Pharmaceutical, Roche, and Sanofi-Aventis.”

And from the same organization Sponsor list…”Special Thanks to our Sponsors–Abbott Laboratories, American Hospital Association, American Medical Association, Amgen, AstraZeneca, Eli Lilly & Company, Hoffmann-La Roche Inc., Sanofi-Aventis, U.S. Boehringer Ingelheim”

As the health care debate unfolds we need to critically analyze news and it’s sources. In this case the sponsors of National Minority Health Month Foundation opposed Medicare D from the start and have not favored progressive change in our health care non-system. The Foundation’s position paper, not surprisingly, reflects these biases and appears more representative of the sponsors than the minority citizens it purports to represent.

This review from the New England Journal of medicine gives perspective on the issue of conflict of interest in medicine. Written in 1993, it is still relevant and timely.

There are numerous aspects to these conflicts. Belief based conflicts of interest in medical care were recently discussed in the 2/8/07 Post.

“In the survey of 1,144 doctors nationwide, 8 percent said they had no obligation to present all possible options to patients, and 18 percent said they did not have to tell patients about other doctors who provide care they found objectionable.”

“Based on the findings, the researchers estimate that more than 40 million Americans may be seeing physicians who do not believe that they are obligated to disclose information about legal treatments the doctor objects to, and 100 million have doctors who do not feel the need to refer patients to another provider.”

“Male doctors and those who described themselves as religious were the most likely to feel that doctors could tell patients about their objections and less likely to believe doctors must present all options or offer a referral.”

Researchers are often on the payroll of interested parties. Here too. This excerpt is from an article in the Washington Monthly:

“Lots of eminent people took great offense at being accused of being influenced,” Relman told me recently. “‘What an insulting thing to say. I value my reputation; doctors and scientists know best. Trust us.’ I spent the first 25 years of my career doing clinical research and being one of them, and I know the feeling.” As Harvey Lodish, professor of biology at MIT, huffed to Technology Review in 1984, when Relman first required disclosure at the Journal, “Scientists have all kinds of private consulting arrangements with biotechnology companies and many own stock in these companies, but that’s nobody’s business. It has nothing to do with the quality of their research.”

Practicing physician’s conflicts include receipt of gifts from suppliers, use of pharmaceutical samples, attending drug company sponsored continuing medical education, receiving funds for physician and even family travel, speakers bureaus, ghostwriting articles by the physician, and being paid for consulting and research.  Some even accept very significant payments for enrolling patients in drug company run clinical trials. 

Another aspect of conflicts of practicing physicians is the arrangement with insurance companies to restrict provision information regarding treatment options to patients, receiving money from insurers for cost containment.

There is also the conflict that the physician’s decisions directly influence his/her income. See this and this about Cancer specialists. For what it’s worth, you could make the same observations about all physicians who do procedures or authorize them. (Medicynical disclosure–I am a retired oncologist)

While I don’t believe that improving one’s income has a tremendous influence (see Angell’s comment below) on the choice of treatment, the patient’s ability to pay for whatever is being recommended certainly is a factor.  Private groups in a for-profit health care system do not, and indeed cannot, provide costly therapy without reimbursement. These patients may qualify for medicaid, VA care or treatment in a public supported clinic and receive treatment in that fashion. Others may be offered less expensive and perhaps less effective approaches. Still others are simply out of luck and have to defer whatever they need. In part, some of the allure of unproven and mostly ineffective so called “alternative” therapies is that they are less expensive. So to some degree, in our non system of care, treatment is tailored to the ability to pay and whether we admit it or not, money influences choices.

Also from the Washington Monthly:

“They actually believe that they aren’t influenced,” says Angell. Aside from the fact that it’s not in physicians’ self-interest to acknowledge the effects of corporate money, they may have a hard time seeing the problem for the same reason fish don’t know they’re swimming in water: Doctors are surrounded by conflicts of interest almost from the moment they arrive at medical school. Pharmaceutical companies begin wooing young doctors with small tokens at first, pens and coffee mugs emblazoned with drug logos, then escalating to pizza night for medical residents, dinners at expensive restaurants and tickets to sporting events. Most schools offer a class in medical ethics, but there’s no requirement that they discuss conflict of interest. Besides, a few lectures can’t outweigh the message young doctors absorb every day, as they watch the icons in their profession–their professors, visiting lecturers, heads of departments–taking gifts, speaking on behalf of companies, flying first-class to medical meetings in Paris and Honolulu. By the time medical residents enter private practice or the lab, the gifts from industry no longer seem like gifts, but entitlements”just another way to be compensated for all those brutal, slogging years of lousy pay and long nights.”

We’re not the only ones with this problem. See this in Australia.

12 Billion dollars is spent yearly on marketing to physicians. If one includes all marketing costs for pharmaceutical companies, the total exceeds big Pharma’s research costs. This needs to change–this may help.

More on conflicts of interest in medicine in: On the Take: How Medicine’s Complicity with Big Business can Endanger Your Health by Jerome Kassirer

Paul Krugman’s column (2/16/07) notes regarding UnitedHealth:

“The two hospitals accuse UnitedHealth of operating a “rogue business plan” designed to avoid paying clients’ medical bills. For example, the suit alleges that patients were falsely told that Flushing Hospital was “not a network provider” so UnitedHealth did not pay the full network rate”

This was apparently not new for UnitedHealth who previously was accused of misleading patients about doctors in their network.

Insurers attempt to deny or avoid claims and to segregate risk. This means if you get sick they will try to find a reason not to pay, and may try to to remove you from their rolls and/or charge more. In a system where insurance is associated with being employed, this means if you get sick and need to stop work the insurer will try to switch you to an individual policy and charge more in an attempt to get you out of their system. Pretty neat!!

Krugman also notes that McKinsey & Company has estimated 98 Billion dollars in excess administrative costs in our health care system, more than enough to pay for insurance for the 47-48 million uninsured in our country. McKinsey also estimates we pay 66 Billion dollars in excess costs for medications–comparing our costs with those of the rest of the world. There are also other costs incurred by physicians offices trying to collect from insurers, and more yet for the chaos in our health care system.

In his Economic Scene article Robert Frank noted:

Far more troubling is its embrace of a system under which we spend more than twice as much on health care, on average, as the 21 countries in which life expectancy exceeds ours. American costs are so high in part because the reliance on private insurance multiplies administrative expenses, currently about 31 percent of total outlays.

Most health economists agree that government-financed reimbursement is the only practical way to control these expenses, many of them stemming from insurers’ efforts to identify and avoid unhealthy people. Canada’s single-payer health system, which covers everyone, spends less than 17 percent on administrative expenses.

Annual health spending in the United States currently exceeds $2 trillion. A single-payer system that did nothing more than reduce administrative expenses to the levels of other countries would save roughly $300 billion annually.

We pay a terrible price both financially and medically for our inefficient inadequate health care non-system.

The health care debate must be getting serious. This editorial is from the Investor’s Business Daily (2/12/07).

IBD seems to imply that our health care system really isn’t as bad as it seems. We use different definitions for certain events than elsewhere and that explains the mediocrity of our health care outcomes.

“In addition, other countries have suspiciously low infant mortality rates in the first 24 hours after birth. Eberstadt found that in the U.S., Canada and Australia, more than 33% of infant deaths occurred in the first day of life. In France, just 16% died in the first day, in Luxembourg just 10%, and in Hong Kong only 4% of infant deaths occurred in the first day of life. Eberstadt concludes that these countries are artificially pushing down their infant mortality rates by counting many first-day deaths as stillbirths.”

Comparing U.S. Infant mortality OECD data from 2003 with countries using similar methodology however shows Canada with 5.4/1000 live births, Australia at 4.8/1000, UK at 5.3/1000 and the U.S. at 7/1000. Even amongst our peers we don’t measure up.

Investors Business Daily also stated:

“The claim that the U.S. fares far worse than other countries on life expectancy suffers a similar problem because it fails to take into account the multitude of factors other than health care that affect life expectancy.”

“The simple fact is the U.S. suffers from lots of problems – more drug abuse, more murders, more traffic fatalities – that cut into overall life expectancy. The murder rate, for example, is seven times higher in the U.S. than in Japan.”

Those are hardly cultural factors to be proud of.  But guess what, all countries have a different mix of issues affecting mortality. For what it’s worth the life expectancy at birth in Canada for girls is 82.1, and boys 77.3, Australia for girls is 82.8 and boys 77.8 and U.K 80.7 for girls and 76.2 for boys. While in the U.S. life expectancy at birth for girls is 79.9 and boys 74.5. As noted in the IBD article these are countries with a similar basis for their statistics. (Source OECD 2003) By the way health expenditures as % of GDP in 2006 was 9.9% for Canada, 9.2% for Australia and 7.7% for the United Kingdom versus 15.3% for the U.S. (Source OECD statistics for 2006)

In regard to infant mortality, IBD doesn’t explain why we spend close to 16% of GDP on health care, 50-100% more than many of the comparators and have worse or if you take the critique seriously, no better health results than elsewhere.

In regard to life expectancy, it is inescapable that we have mediocre life expectancy when compared with other industrial countries, especially considering the amount spent.

If the U.S. health care establishment were a private company Investor’s Business Daily would be screaming about it’s inability to compete in the global marketplace and accuse the board and managers of mismanagement, inefficiency and waste–not defending a ridiculously expensive non-system of care.

I don’t usually agree with Michael Crichton but he does have a point about patenting genes.

“Gene patents are now used to halt research, prevent medical testing and keep vital information from you and your doctor. Gene patents slow the pace of medical advance on deadly diseases. And they raise costs exorbitantly: a test for breast cancer that could be done for $1,000 now costs $3,000.”

It’s not too much of a jump to raise the issue of patents in pharmaceuticals. Drug patents have become a tool of monopolists. For a generation (20 years) one company has the franchise for the patented drug. It matters not whether the drug is a minor new agent or one that saves lives. The company can charge whatever it wishes, even exceeding the median and average incomes of U.S. citizens in cost/year. This happens quite frequently with medications developed for life threatening conditions. The cost has almost nothing to do with development and production costs, rather it’s price seems to be based on the desperation of the patient. The theory appears to be the more desperate you are, the more you’ll pay–a little like blackmail.

See our archives here and here for more information and suggestions to change this.

Technorati : Patent Drugs

This from KPMG Insider:

U.S. attorneys are examining device makers’ questionable sales and marketing practices, including travel junkets, entertainment, research grants and, perhaps most worrisome, consulting contracts with orthopedic surgeons amounting to hundreds of thousands of dollars a year.

To date, those investigations have been largely limited to device makers and doctors. But hospitals may not be immune forever, and they are either considering or totally revamping conflict-of-interest rules to stay out of trouble.

Sadly this appears to be norm rather than the exception in the medical business. Guess who pays?