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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 06-08-2004

U.S. to Order Anthrax Vaccine Government Also Wants Treatment, Adviser Says
Washington Post, 6-8-04

Building defenses against bioterrorism requires government leadership in markets - as it must for the provision of diffuse "public goods".

But private markets won't supply technology leadership unless the government offers market returns on investment. This lesson has been amply demonstrated by the ongoing fiasco of government price structures for vaccine suppliers. Since the government is the single largest purchaser of vaccines, the brutally low prices that the government has offered in recent years has decimated the R&D and distribution of vaccines to the degree that there are now routine shortages of these critical medicines, particularly for childhood diseases. Given the direct parallel between vaccine provision and bioterror research, it is critical that the government supply enough public funding to support robust competition and research in this area.

Nonetheless, nearly three years after the September 11, 2001 attacks, Congress has still failed to pass comprehensive bioterrorism legislation. In light of this breach, the Bush administration has proceeded with its own contingency plans, including placing orders for anthrax vaccine and investing in new treatments programs against this dreaded bioterror weapon.

With a bit more luck, additional Congressional funding should be forthcoming in the near future. Project Bioshield (the current bill in Congress) has been passed by both houses of Congress and is currently being reconciled between the House and Senate versions. This is good news for the biotechnology sector, which has been encouraged to develop new technologies to defend against bioterror attacks, but has been hesitant to make substantial R&D investments until it has assurance from the government that it is committed to sustained funding of this critical sector. Leadership in this area requires that policymakers recognize that they cannot create private sector innovation by legislative fiat - market success requires market rewards.

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A Prescription For Healthcare: Professor: Get Industry To Compete Over Quality Instead Of Shifting Costs
The Boston Globe, 6-8-04

Michael E. Porter, a nationally renowned business guru at Harvard University, has added his voice to the growing chorus of experts who want to empower patients with the knowledge and ability to choose their own treatments - consumer driven health care. In this model, patients would use reliable, easily available information about the quality of medical care to choose their own providers, creating true market incentives for providers to deliver quality care and decrease costs.

In an article published in the June issue of the Harvard Business Review, Porter advocates moving healthcare competition to the level of specific diseases and treatments rather than the level of health plans, networks, or hospital groups. As the system stands now, Porter believes that health care competition revolves around a variety of players competing for the same piece of the pie: zero-sum competition that doesn't depend on adding value to patient outcomes.

Porter and his co-author, Elizabeth Olmstead Teisberg, of the University of Virginia, call for collecting and disseminating more information about the outcome of medical procedures so that patients can drive value through the direct purchase of medical services. They also advocate transparency in medical billing and pricing, and increasing healthcare specialization by providers, "resulting in more centers of excellence in conditions and treatments that compete for patients."

Government would, in this new paradigm, continue to play a vital role by blocking network restrictions, hospital consolidation, and multiple hospitalization bills, and by helping to set the framework for reform. The role of health plans in this system would be as consumer advisors, "helping their members navigate the system and find the best care" for the best price.

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Immunetics' Test for Anthrax Receives Approval by the FDA
Wall Street Journal, 6-8-04

For the first time, the FDA has approved a "fast, accurate blood test" for anthrax, one of the most feared bioterror weapons, and the pathogen that killed five people in the aftermath of the September 11th attacks. The test was developed by Immunetics Inc., at the request of the U.S. government. The new test, the first to gain FDA approval, will be distributed to a national network of 100 labs that have been identified as the first line of defense in the event of a bioterror attack. This test can detect both inhaled and cutaneous anthrax, and the test will allow states and localities to run their own diagnostics quickly without having to rely on the federal Centers for Disease Control. The test takes about an hour to run instead of four, the time used for earlier tests.

The private sector has demonstrated through limited projects like this one that it has the technology to develop the diagnostics and treatments that America needs to respond effectively to bioterror attacks. What is needed to now is to translate isolated programs like this one into a credible national bioterrorism defence stragtegy with the funding to promote private sector research and development for the the coming years - and decades.

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Two Drugs Found to Help In Prostate and Brain Cancers
The New York Times, 6-8-04

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New Drug Curbs Breast Cancer After Standard Therapy Ends
Wall Street Journal, 6-9-04

The results of two clinical trials presented at the annual meeting of the American Society of Clinical Oncology are certain to change the course of cancer treatment for patients with certain aggressive forms of cancer. The drug Taxotere has been shown to extend the lives of prostate cancer patients even after the cancer had spread to other organs and become resistant to hormone treatment, which is the typical therapy for patients whose prostate cancer has metastasized. Some researchers also suggested that Taxotere would be even more useful when it was applied to prostate cancer patients earlier in the progression of their disease. Taxotere had previously been approved by the FDA to treat breast and lung cancer.

The drug Temozolomide, used against the most common and aggressive form of brain cancer glioblastoma multiforme, also showed an increase in median survival time as compared to traditional surgery and radiation therapy. Nearly three times the number of patients receiving temozolomide were still alive after two years compared to traditional radiation therapy.

The second article mentioned above reports a dramatic new option in the struggle against breast cancer. Women with post-menopausal cases of breast cancer who took the drug Femara in addition to standard therapy had a 40% reduction in cancer recurrence in other parts of the body. The drug also boosted cancer survival in women whose cancer had spread to the lymph nodes by an additional 2.5 years.

Femara is a member of a new class of drugs called aromatase inhibitors that have been making new strides against breast cancer. Femara represents a major development in breast cancer treatment since the normal course of treatment for breast cancer is surgery followed by five years of Tamoxifen - which is then suspended due to potential side-effects of Tamoxifen therapy. A significant number of women with breast cancer - 30% - will develop a recurrence after five years, and Femara is the first hormonal therapy with a proven survival advantage for women who followed the standard course of breast cancer treatment.

Research by Columbia University professor Frank Lichtenberg underscores the articles' basic message: increasing the number of treatment options available to cancer patients means increasing the odds of survival. For diseases where treatment options grow more quickly, cancer mortality rates also tend to decrease. Nonetheless, the passions that this dreaded disease evokes have led some in Congress to call for price controls on promising new cancer drugs - which would cut off companies from the market incentives driving research. Rather than demanding price controls, researchers and policymakers should be focused on incentives to increase our stock of innovative, effective cancer drugs - because running out of options is the most expensive outcome of all.

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Big Employers Join Forces in Effort to Negotiate Lower Drug Prices
The New York Times, 6-12-04

Fifty of the nation's largest employers are banding together to use their combined purchasing power to negotiate lower drug prices on behalf of their current and retired employees (about 5 million strong). By negotiating directly with drug manufacturers, employers hope to cut out the "middlemen" and reduce expenditures on prescription drugs. But if lasting gains come from arrangements like this one, it will be because employers demand better outcomes from health care providers, rather than just better prices. Total health care spending only declines when providers compete on quality: better outcomes at better prices for a given diseases or condition (say, heart attacks). Paying less for worse care isn't a real bargain at all because it leads to more emergency room visits, doctor's visits, and acute treatments.

This, however, could be a step in the right direction. The group already plans to negotiate with drug manufacturers on the 50 drugs that its members spend the most on: cholesterol lowering statins, heartburn medications, painkillers, anti-depressants, and allergy medications. The real question is, will they get the best drugs available, drugs that keep employees more healthy and productive, or will they take the best deal available, regardless of outcomes, and try and pocket the (illusory) savings?

Transparency and quality are health care buzzwords these days, thanks in part to the flood of information emerging from the Medicare Modernization Act of 2003, but making better health care a reality for all Americans will remain a daydream until providers, employers and the federal government focus relentlessly on the real bottom line: patient health.

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