« August 2008 | Main | October 2008 »

September 29, 2008

Who Spends What on Healthcare?

by Peter Pitts

On both sides of the aisle, politicians repeatedly criticize the amount of money America spends on health care.

They’ve got a point. Our $2 trillion healthcare tab is quite steep. But we're not alone — every other developed nation, even those with universal healthcare systems, struggles with high healthcare costs.

Indeed, people in other healthcare systems often pay more than Americans do, once taxes are taken into account. Add in the high non-monetary costs of rationed or denied care and waiting lists, and suddenly the vaunted European systems commonly touted as models for the United States don’t seem like a good deal at all.

Let’s dive into the numbers.

In the US this year, a family of four with an employer-based PPO will face about $15,609 total in healthcare costs. Of this amount, the employer will pay on average $9,442, and the employee will contribute $3,492 in premiums and $2,675 for co-pays and other expenses. Employee premiums are about 6 percent of the median family’s annual income — less than what that family spends on food.

In Canada, while the percentage of taxes used to provide healthcare varies, it is estimated that 22 percent of taxes collected went to the health system in 2004. Several provinces, including Quebec, Ontario, Alberta, and British Columbia, also charge additional premiums. Canadians may spend their own money to receive private treatment for procedures or drugs that are not covered by the government system.

Citizens of the United Kingdom pay 11 percent of each pound they make in weekly income between $198 and $1,326 for care through the state-run National Health Service, plus an additional one percent of income over $1,326 per week. That’s nearly double what Americans pay.

The co-pay for drugs is low, but many drugs are not covered, often because they are not considered cost-effective enough to justify inclusion in the government’s plan.

But what if you need one of those drugs? Well, you can kiss your NHS benefits good-bye. Anyone who uses his or her own money to buy drugs outside the NHS will find him or herself shut out of the system.

In Germany, coverage from a public sickness fund currently can range significantly in cost, from around 12.2 to 16.7 percent of income, with the employee paying a bit under half. This coming fall, premiums are set to be standardized — and healthcare experts anticipate that they will be set around 15.5 percent. Private patients can generally expect to pay more than they would in the public system.

In France, employees contribute only 0.75 percent of their salaries towards medical care, but they also pay a 7.5 percent General Social Contribution, the majority of which is earmarked for the health system. This base coverage reimburses people for the bulk of costs for doctor visits and for a portion of the costs of medications. On top of the government coverage, almost all French residents have supplementary coverage from a mutuelle, which costs approximately 2.5 percent of salary.

When compared to the U.S., the fact is that the health care systems in Europe and Canada don’t save citizens much at all.

Health reform is urgently needed in this country, and cost-cutting will be a critical component of any reform efforts. Despite its supporters’ claims to the contrary, government control of the healthcare marketplace is anything but a ticket to a lower-cost healthcare paradise.

Posted by peterpitts at 08:16 AM
Comments (0) | TrackBack | Permalink

September 24, 2008

Sunshine Superman

by Peter Pitts

A little sunshine is always welcome in central Indiana.

Starting next year, Eli Lilly and Co. will reveal how much money it pays physicians for speeches and consulting. According to a report in the Indianapolis Star, Lilly president and chairman, John Lechleiter, will announce the new policy in an address to the Economic Club of Indiana today.

"Lilly is striving to be a leader in improving transparency across our industry," Lechleiter said in a statement. "As Lilly continues to look for more ways to be open and transparent about our business, we've learned that letting people see for themselves what we're doing is the best way to build trust."

Under Lilly's registry of physician payments, they will list fees to physicians who serve the company as speakers and advisers. That information, which likely will include physicians' names and hometowns, will be posted starting in the second half of 2009 on a publicly accessible Internet database, Lilly said.

In 2011, Lilly plans to expand the database to include payments, updated annually, for clinical research and other provisions called for in the Physician Payments Sunshine Act pending in Congress.

For a big drug company to be the first to disclose its payments to doctors "takes a lot of courage," said Sen. Herbert Kohl, D-Wis., a co-sponsor with U.S. Sen. Charles Grassley, R-Iowa, of the Sunshine Act.

In 2004, Lilly became the first drug maker to voluntarily make public data on its clinical trials of new drugs. Last year it began publicly reporting its educational grants and charitable contributions, becoming the first in its industry to do so.

Posted by peterpitts at 11:11 AM
Comments (0) | TrackBack | Permalink

September 23, 2008

The Death of Importation

by Peter Pitts

As I've said again and again and again -- importation is not going to happen.

Now maybe people will start listenng.

Both campaigns, it seems, have come to their senses. The issue is safety.

And:

(1) It won’t save any money. Let’s not forget the non-partisan CBO study that showed that such policy would reduce our nation’s spending on prescription medicines a whopping 0.1% -- and that’s not including the millions of dollars the FDA would need to set up a monitoring system.

(2) The drugs being sent to U.S. customers from Canadian internet pharmacies are not “the same drugs Canadians get.” That bit of rhetoric is just plain wrong. Canadian internet pharmacies – by their own admission – are sourcing their drugs from the European Union. And while they may say their drugs come from the United Kingdom, let’s not conveniently forget that 20% of all the medicines sold in the UK are parallel imported from other nations in the EU – like Spain, Greece, Portugal, and Lithuania.

The important political point here is that when Americans are asked if they want drugs from nations other than Canada – the answer is a resounding “no thank you.”

(3) The state experience has been dismal and politically embarrassing. Remember the high profile “I-Save-RX”program? Over 19 months of operation, a grand total of 3,689 Illinois residents used the program -- which equals approximately .02% of the population. They don’t call him “Wrong Way” Rod Blagojevich for nothing.

And what of Minnesota and Governor Tim Pawlenty’s RxConnect program? According to its latest statistics, Minnesota RxConnect fills about 138 prescriptions a month. That's for the whole state. Minnesota population: 5,167,101.

And remember Springfield, MA and “the New Boston Tea Party?” Well the city of Springfield is now out of the drugs from Canada business.

(4) National Security concerns. According to a recent report from the federal Joint Terrorism Task Force, a global terrorist ring with ties to Hezbollah, is importing counterfeit drugs into America by way of Canada. They are doing so for profit today - but could just as easily do so for more nefarious and deadly purposes. And legalizing importation would only facilitate such actions.

The next canard, that of "universal" care is even more dangerous. It's government care -- and it ain't free.

"Universal" care is the new importation.

But we'll bask in the demise of importation until Monday.

(And, hopefully, reports of its death have not been greatly exaggerated.)

Posted by peterpitts at 09:40 AM
Comments (0) | TrackBack | Permalink

September 17, 2008

Caste of Characters

by Peter Pitts

The House Energy & Commerce Committee needs to help fix the problem, not the blame.

Statements coming out of the committee like -- “The FDA has refused to take meaningful regulatory action despite the fact that, for the past three years, it possessed credible information that Ranbaxy had engaged in a pattern of fraudulent behavior regarding its generic drug applications and records pertaining to good manufacturing practices.” -- is not being fair to an agency that at the time under debate and yet today is under-funded and under-staffed.

But when the committee says -- “The FDA, for example, conducted preapproval inspections for only 17 percent of the Ranbaxy applications approved since January 2005. It also allowed Ranbaxy to perform the key bioequivalence studies for generic drug approvals in facilities owned by the firm and conducted by clinicians employed by the firm.” – they’re right. The same rule that holds true for innovator companies must also applied to generic drug manufacturers – otherwise the public’s queasiness about the quality and character of generic drugs will continue.

But Representative John Dingell, who chairs the committee, goes to far when he says, “The heparin fiasco made it clear that the FDA had compromised the policies that were put in place during the last generic drug scandal to protect the public from fraud. This latest Ranbaxy announcement further confirms that those protective policies are in shambles. The FDA is not doing its best to protect the medicines that Americans depend on for their health.”

That’s not true. It’s not fair. And it’s not helpful.

Posted by peterpitts at 08:12 AM
Comments (0) | TrackBack | Permalink

September 15, 2008

From Parklawn to Parking on the Lawn

by Peter Pitts

AP reports that Food and Drug Administration has recently hired more than 1,300 professional staffers in a move that “officials hope will help it better protect the public health amid rapid technological and scientific change.”

40% or so of the total positions are paid for via PDUFA fees; ergo the new hires will mainly be evaluating new drugs or medical devices and, in some cases, monitoring safety issues.

That’s great news. But where are they all going to park? White Oak isn’t even finished yet and already it’s looking like the seating charts will have to be rearranged – particularly since CDER is getting 663 new staffers.

It's a good problem to have.

CFSAN is slotted to get 104 -- a 10% increase (a good start – but not enough). And ORA will grow by 245. Good news.

1,000 of the new hires have already started, with another 158 due to report later this month. An additional 160 have accepted offers. Of those on the job already, more than 850 are professionals, including chemists, biologists, pharmacologists, statisticians, medical officers, microbiologists and field inspectors.

Of the total 1,317 positions, 770 are new jobs and 547 are posts that were left vacant by people leaving the agency for other jobs or due to retirement.

But it’s not all rosy and it’s not as easy as reporting numbers.

The FDA hired nine cancer specialists, but another 20 rejected offers. "They could not make the money they would be making on the outside if they came into public service," said Kimberly Holden, the FDA’s senior manager directing the recruitment initiative. The agency could offer as much as $275,000 a year, she said, but oncologists can make $400,000 annually outside of government service.

All-in-all, it’s a good start. But it’s just the end of the beginning -- and just barely.

Posted by peterpitts at 08:50 AM
Comments (0) | TrackBack | Permalink

September 12, 2008

IQWiG Aims at the Stars

by Peter Pitts

“I Aim at the Stars,” was a 1960 B-movie biopic about Wernher von Braun. Many felt that it should have been subtitled, “But sometimes I hit London.”

In keeping with that metaphor, comes news that Germany’s IQWiG (the Institute for Quality and Efficiency in Healthcare) is preparing to test a new cost-benefit methodology towards the end of this month. The test will last for about four months.

To do this it has had to draft a cost-benefit methodology. A first version was put out for public consultation earlier this year and drew many comments (not all laudatory) from stakeholders. Some were critical of the proposed "efficiency frontier analysis" the institute plans to use as the basis of cost-benefit assessments. IQWiG claims that efficiency frontier analysis can be "used in a very flexible manner to compare the cost-benefit relation of any number of therapy alternatives.”

“Flexible” is in the eyes of the beholder.

IQWiG´s new methodology will help determine an “appropriate ceiling” price for drugs that are reimbursed by the statutory health insurers but cannot be included in a reference price group. IQWiG’s assessment will also include a budget impact analysis that can be used in estimating how a decision may affect expenditure in the health care system as a whole.

The cross-channel (and potential cross-Atlantic) implications are especially timely coming on the heels of the Baucus/Conrad bill and while experts are predicting a meltdown of Britain’s NHS.

The answer? According to Sir Michael Rawlins, chairman of the National Institute for Health and Clinical Excellence (NICE), draconian rationing. As he said earlier this week, "Rationing is a necessary evil. We have to do it. There will be losers and winners." That's "universal" health care in its true guise of cost-based "government" health care.

As Tom Lehrer sang, “Once the rocket goes up who cares where it comes down. That’s not my department says Wernher von Braun.”

Posted by peterpitts at 08:26 AM
Comments (0) | TrackBack | Permalink

September 09, 2008

The shot not heard 'round the world

by Peter Pitts

Today the NY Times, in a house editorial, tells the truth about vaccines and autism.

But where are the front page stories? Where's the outrage?

Where's the justice?

Here's the complete editorial:

Debunking an Autism Theory

Ten years ago, a clinical research paper triggered widespread and persistent fears that a combined vaccine that prevents measles, mumps and rubella — the so-called MMR vaccine — causes autism in young children. That theory has been soundly refuted by a variety of other research over the years, and now a new study that tried to replicate the original study has provided further evidence that it was a false alarm.

The initial paper, published in The Lancet, the prestigious British medical journal, drew an inferential link between the vaccine, the gastrointestinal problems found in many autistic children and autism. In later papers, researchers theorized that the measles part of the vaccine caused inflammation in the gastrointestinal tract that allowed toxins to enter the body and damage the central nervous system, causing autism.

Now, a team of researchers from Columbia University, Massachusetts General Hospital and the Centers for Disease Control and Prevention has tried and failed to replicate the earlier findings.

These researchers studied a group of 38 children with gastrointestinal problems, of whom 25 were autistic and 13 were not. All had received the vaccine for measles, mumps and rubella. The scientists found no evidence that it had caused harm. Only 5 of the 25 autistic children had been vaccinated before they developed gastrointestinal problems — and subsequently autism. Genetic tests found remnants of the measles virus in only two children, one of whom was autistic, the other not.

The new study adds weight to a growing body of epidemiological studies and reviews that have debunked the notion that childhood vaccines cause autism. The Institute of Medicine of the National Academy of Sciences, the C.D.C. and the World Health Organization have found no evidence of a causal link between vaccines and autism.

Meanwhile, the original paper’s publisher — The Lancet — complained in 2004 that the lead author had concealed a conflict of interest. Ten of his co-authors retracted the paper’s implication that the vaccine might be linked to autism. Three of the authors are now defending themselves before a fitness-to-practice panel in London on charges related to their autism research.

Sadly, even after all of this, many parents of autistic children still blame the vaccine. The big losers in this debate are the children who are not being vaccinated because of parental fears and are at risk of contracting serious — sometimes fatal — diseases.

Posted by peterpitts at 10:01 AM
Comments (0) | TrackBack | Permalink

September 05, 2008

If it’s Tuesday it must be a single nucleotide polymorphism

by Peter Pitts

Scientists have shown that they can use genomic analysis to pinpoint a person's geographical origins to within just a few hundred kilometers. Besides offering possibilities for the testing of genetic ancestry, the research could also have important implications for understanding the role of genes in complex diseases and other genomic-based health studies.

By plotting the differences between genetic variations of 3,000 Europeans in a two-dimensional grid, the researchers were able to reveal a pattern that looks remarkably like Europe. The scientists included researchers from CornellUniversity; the University of California, Los Angeles (UCLA); the University of Chicago; and the University of Lausanne, in Switzerland. The findings appear in this week's issue of Nature.

Fortunately the Critical Path does not require a visa -- but it does require funding -- now!

Posted by peterpitts at 09:31 AM
Comments (0) | TrackBack | Permalink

September 03, 2008

The Pied Piper Effect

by Peter Pitts

A new study out of Harvard debunks the canard that DTC advertising causes a “Pied Piper” effect of patients marching en masse to their physicians demanding drugs they don’t need.

Reuters reports that, “Expensive advertising of prescription drugs directly to consumers may do little to encourage sales, U.S. and Canadian researchers reported on Monday.”

According to the report, even though companies spent an estimated $3 billion in 2005 on such ads in the United States, they did not appear to result in more prescriptions.

"People tend to think that if direct-to-consumer advertising wasn't effective, pharma wouldn't be doing it," HarvardMedicalSchool's Stephen Soumerai said in a statement. "But as it turns out, decisions to market directly to consumers are based on scant data."

The nonprofit Kaiser Family Foundation has come to similar conclusions in reports on direct-to-consumer ads.

In an April report the foundation found that 91 percent of adults surveyed had seen or heard advertisements for prescription drugs, but just one-third spoke to a doctor about a drug they saw advertised, and 54 percent of them got a prescription for a different drug.

Among doctors, 76 percent said they sometimes recommend a different prescription drug to a patient who mentions a drug ad and 5 percent said they frequently gave patients the drug.

Posted by peterpitts at 07:49 AM
Comments (0) | TrackBack | Permalink