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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 08-04-2005

Medicare to Directly Cover Use Of a Genentech Stroke Drug
Wall Street Journal, 8-4-05

Editor’s Notes:

When a company creates a useful drug to treat a devastating disease it may have only won half the battle. Take, for instance, the stroke drug tPA (tissue plasminogen activator), which experts agree is widely underutilized.

Stroke is a devastating condition that occurs when a blockage (usually a blood clot) obstructs a blood vessel leading to the brain (called an ischemic stroke) or, alternately, when a blood vessel in the brain bursts (hemorrhagic stroke). Both types of stroke can rapidly lead to death or crippling disability, although the overwhelming majority of strokes (about 80%) are ischemic. tPA, if given within three hours of stroke onset, can dissolve blood clots in ischemic stroke patients and help to save brain function. Unfortunately, tPA is only rarely used—in part because Medicare has not, until recently, reimbursed hospitals to cover the full cost of using the drug.

In what promises to create a major change in the treatment of acute stroke patients in the U.S., the federal Medicare agency will for the first time begin specifically paying hospitals for the use of [tPA]. The fact that Medicare hasn't previously paid specifically for the use of the drug, called tPA from Genentech Inc., has proven to be an impediment to its use, stroke experts say. …
Joseph Broderick, a stroke expert and chief of neurology at the University of Cincinnati, termed the decision "as important as any development since tPA was demonstrated as the first effective treatment for ischemic stroke in 1995." The drug has been available in the U.S. since 1996.

The decision to specifically reimburse for tPA use illustrates one of the continuing struggles in government health care programs. More often than not, bureaucrats issue one-size-fits-all rules that don’t adapt to medical advances, or don’t take account of the overall value of pharmaceuticals. Medicare is certainly making strides in this respect, and should be applauded, but much more needs to be done to ensure better cost-benefit analysis throughout government health care programs.

[permanent link]

F.D.A. Responds to Criticism With New Caution
The New York Times, 8-6-05

Editor’s Notes:

According to the New York Times, the FDA has responded to a rash of media and Congressional criticism by—unsurprisingly—becoming significantly more cautious in its approach to drug safety and drug approval. Perhaps too cautious, in fact.

Stung by a series of drug safety scandals, the Food and Drug Administration has in recent months issued a blizzard of drug-safety warnings and approval times for new drugs are slower. The agency is issuing twice the number of public advisories about drug risks as it did a year ago and adding five times as many black box warnings -- its most serious alert -- to drug labels. And drugs approved in the first half of this year took almost twice as long to get that approval as drugs approved in the same period last year.

This new conservatism, a response to fierce recent criticism from Congress that the F.D.A. has failed to protect the public against drug dangers, has upset some doctors and drug makers. Doctors say that the agency's vague warnings and confusing advice mean that doctors are not getting the information they need to avoid problems but will get blamed for them anyway. Drug makers say the warnings are scaring patients and reducing sales. …

Delayed access to new drugs is not just a matter for academic debate or bureaucratic bean-counting. Patients suffer and die during the months or years the FDA takes to review new drug applications. What about rare drug risks? They are, by definition, rare. The vast majority of FDA approved drugs are safe for the vast majority of people who take them. Monday-morning quarterbacking by Congress of the FDA’s enormously complex decisions can only lead to one outcome: the FDA slows down. Unfortunately, no federal agency in is empowered to do a cost-benefit analysis of Congress’ overheated rhetoric.

[permanent link]

Radical Surgery For Medicaid? South Carolina Governor Sanford has a plan to slash costs -- but a political battle looms
Business Week, 8-8-05

Editor’s Notes:

Former U.S. Supreme Court Justice Louis Brandeis once endorsed American federalism by observing that “It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Welfare reform experiments in Wisconsin in the mid 1990s set the stage for the enormously successful national reforms that followed. Republican governors like Mark Sanford in South Carolina and Jeb Bush in Florida are blazing similar trails in Medicaid reform that will, hopefully, lead to a similar revolution.

Why do these governors have unprecedented room to maneuver? As in the case of welfare, there is widespread agreement that Medicaid is a program in crisis.

The state and federal program that provides essential health benefits for the poor is in big trouble across the country -- under fire for providing often substandard care even as it breaks the budgets of many states. Now, in what could be the first step toward a fundamental remaking of the huge public program, South Carolina's Republican governor, Mark Sanford, has quietly asked the federal government for permission to redesign Medicaid for the 800,000 low-income residents of his poor, largely rural state.
Under Sanford's proposal, Medicaid would be dramatically transformed. It would no longer provide unlimited care, instead offering beneficiaries -- mostly mothers with children -- a fixed amount of money each year to buy insurance and pay out-of-pocket costs. If they run through their accounts, they would have to pay for additional care on their own. But if they hold spending down, they could bank the leftover money to pay future medical costs -- or even use it to buy private insurance if they leave the program. "This is the biggest change ever for Medicaid," says Cleveland State University finance professor Michael Bond, who helped design the plan.

Ironically, the long-term fiscal health of this much-lauded liberal program may depend on bold reforms from just a few Republican governors.

[permanent link]



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