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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 06-05-2005

Medicare’s Will May Be FDA’s Way
Los Angeles Times, 6-5-05

Editor’s Notes:

The FDA is currently in discussion with Medicare to use its enormous database of prescription drug records to spot rare side effects.

…the FDA's current system of voluntary reporting picks up no more than 10% of serious drug reactions. To help shrink the knowledge gap, Medicare head Mark McClellan, a doctor and an economist who once ran the FDA, has proposed a Medicare-based system to track the safety and effectiveness of medications.
McClellan proposes taking billing data from the prescription program, which will begin in January, and combining it with healthcare information already collected when Medicare users submit claims for hospital and doctors' care. By cross-referencing the information, a computer system could spot signs of trouble.

Patients' personal information would be protected, but the data pool would be so large that problems could be much easier to detect than they are now, he said.

The real challenge will be ensure that the Medicare information is detailed enough that the FDA can separate drug safety issues from the random noise in the Medicare population—for instance, when a 75 year old smoker has a heart attack, was it from the smoking or from the four prescription drugs he was taking? If they can surmount this hurdle, the system will quickly become valuable resource.

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U.S. to Develop Retrieval System for Medical Data
Wall Street Journal, 6-6-05

Editor’s Notes:

Drug safety, as we noted above, could be greatly improved through the advent of electronic health records. Today, for instance, doctor’s records are largely maintained with pen and paper—which greatly limits their utility in everything from detecting side effects to improving disease management strategies. Thankfully, the current administration understands the importance of bringing health care into the 21st century.

President Bush has said he wants most patients to have electronic records within the next 10 years, in an effort to reduce costs and medical errors…. Administration officials said they were wary of a plan that would have the government deciding the rules for how health-information technology will operate. They also said they wanted a gradual implementation process that would be market-sensitive.

Health and Human Services Secretary Mike Leavitt announced this week that “his department is setting up an advisory panel, with government and private-sector members, to guide national efforts to adopt health information technology,” and is “soliciting outside entities to agree on data-sharing standards and create a private certification-and inspection system for medical-records.” With any luck, other market forces, like the spread of Health Savings Accounts and growth of new “smart drugs” tailored to a patients’ genetic background will help speed the adoption of electronic records.

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Some drug prices go up after rivals leave market
USA Today, 6-6-05

Editor’s Notes:

Some consumer groups habitually decry pharmaceutical prices at the same time that they call for more stringent FDA regulation and for fewer prescription drug approvals in general.

As any economist will tell you, however, increased regulatory costs and reduced market access for new products or competitors is a recipe for higher prices, not lower ones. For instance, New York City has rent control and rent stabilization policies that artificially control rental prices, along with some of the most convoluted zoning and building codes in the country. The result is that (outside of existing rent controlled housing) government regulations drive housing and construction costs up, which then leads housing advocates to call for more government regulation. Ironically, regulations that are meant to control prices do exactly the opposite.

The FDA’s approval process isn’t, of course, designed to control prices, but its regulations do drive up costs and limit competition. Companies that manage to bring a product to market must recoup their enormous up-front investment costs and charge accordingly. Take the following observation about current drug prices:

Wholesale prices for leading multiple sclerosis drugs Avonex and Copaxone jumped in May by 8% and 9.4%, respectively, their makers confirmed Friday. In February, sales of MS drug Tysabri were halted after several users contracted a rare brain infection.
Retail prices for painkiller Mobic rose 7% to 11%, depending on the dose, from September through early March, says Consumer Reports. Last September, rival Vioxx was withdrawn from the market because of cardiovascular risks. Other painkiller prices also rose. Prescription-strength Motrin was up 3.9% to 13.3%, depending on the dose, says Consumer Reports. It analyzed retail sales data from market researcher NDCHealth.

Al Heaton, pharmacy director at Blue Cross and Blue Shield of Minnesota, said that “I have never seen a price decrease for other (drugs) when one rival comes off the market.”

The solution to this problem is not to cap prices, but to bring more rivals into the market by streamlining FDA regulations. After all, prices are signals to producers to bring new products to market. Higher prices in one sector will lead companies to shift their investments to those indications (e.g., for multiple sclerosis, cancer, etc), producing more options for patients and physicians. Insurers can also leverage product competition to bargain for lower prices. Even in pharmaceutical markets, competition is still the best solution for improving consumer welfare.

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Casting a new light on healing; Low-level laser therapy shows potential in repairing damaged organs and tissues
Los Angeles Times, 6-6-05

Editor’s Notes:

Star Trek style medicine may be closer than you think. Researchers are investigating the possibility that certain wavelengths of laser light can promote healing in many types of injuries, perhaps even for nerve and spinal cord damage. One researcher, Juanita Anders, has been studying the process for nearly a decade.

She has found that in rats, laser therapy can repair severed spinal cords, allowing once-injured animals to walk again. "It's remarkable," said Georgetown University researcher Kimberly Byrnes, who collaborated with Anders on the research. It was conducted in Bethesda, Md., at Anders' lab at the Uniformed Services University, the U.S. military's medical school. "We got significant growth across the injury," Byrnes adds.
Anders and Byrnes aren't the only ones coming up with promising laser results. Small groups of researchers scattered across the globe are testing the lasers on a range of ailments, including heart attacks, nerve injuries and internal wounds.
"This has the potential to change medicine," said Dr. Harry Whelan, a neurology professor at the Medical College of Wisconsin who experiments with lasers in treating serious eye injuries.

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