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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 02-14-2006

Genetic Tests Pose Tailored Care
Wall Street Journal, 2-14-06

Editor's Notes:

The field of personalized medicine is growing slowly, as industry and regulators try to sort through the avalanche of information provided by the deciphering of the human genome and new sciences like proteomics.

But an encouraging sign of the developing market is that one of the leading players in the health management sector, Medco, is putting its own money on the table to validate a potential genetic test for a commonly used medicine:

One of the nation's leading management companies of pharmacy benefits aims to confirm whether genetic testing can help eliminate the life–threatening and costly complications that many patients develop after starting a prescription of the anticlotting drug warfarin.

The collaboration between Medco Health Solutions Inc. and the Mayo Clinic on a study of warfarin users is one of the latest corporate forays into the emerging science of socalled personalized medicine, in which physicians use genetic or other molecular tests to tailor a patient's treatment.

Those promoting personalized medicine say the science boils down to delivering the right treatment at the right dose to the right patient at the right time, which they say could make health care safer, more efficient and cost–effective. Doctors might use genetic tests to customize the dosage of a drug such as warfarin, determine which treatment would work or pose safety problems, or find a patient's susceptibility to a disease.

Such customized therapy already has been put to some clinical use (some cancer treatments, for example, target certain genes or proteins) and drug makers, biotech companies, medical institutions, testing laboratories and government agencies such as the Food and Drug Administration and the National Institutes of Health appear eager to advance the practice. Health insurers are watching with interest.

"I think this is an explosion about to happen," said Robert Field, chairman of the health policy and public health department at the University of the Sciences in Philadelphia. "Five or 10 years ago, this was the promise of genetic technology. Today, we are seeing the first applications. I think five years from now, certainly 10 years from now, this will indeed dominate medicine.

For more information on the potential savings, in human lives and health care costs, from a genetic test for Warfarin, see this paper from the AEI-Brookings Joint Center on Regulation.

[permanent link]

Pharmaceutical Giants Continue to Raise Prices Higher Than Inflation AARP's Latest Drug Price Study Shows
AARP, 4-10-06

Editor's Notes:

The AARP has released yet another report that singles out prices for a handpicked group of branded pharmaceuticals and alleges, in essence, that the industry is price™gouging American patients.

As part of AARP's "Rx Watchdog" effort, a report released by the organization today found that for the sixth year in a row, manufacturers of brand–name prescription drugs most widely used by older Americans raised the price they charge wholesalers and other direct purchasers higher than the general inflation rate. The average price change for a sample of 193 brand–name drugs was 6 percent in 2005 while inflation over those 12 months was 3.4 percent.

To help consumers better understand drug pricing and to add pressure on the industry to make drugs more affordable, AARP's "Rx Watchdog" project monitors changes in manufacturers' drug prices and issues quarterly reports on the results of analysis by the AARP Public Policy Institute.

Ben Zycher, senior fellow at the Manhattan Institute's Center for Medical Progress, had this to say about the AARP report:

AARP's latest exaggeration of increases in drug prices has little to do with patient welfare or enhanced access to needed medicines. Instead, AARP's statistical biases on drug prices serve a single goal: increased political pressure on the federal government to "negotiate" drug prices for the new Medicare drug benefit. Such mandated price discounts—price controls in all but name—would serve to reduce government spending now at the expense of longer term pharmaceutical research and development yielding the new and improved medicines that would benefit patients in the future; thus are AARP's price distortions little more than an attempt to transfer wealth from future patients to AARP's current constituencies. So much for the children.

Ironically, AARP's preferred policy outcome is so shortsighted that among the losers will be found many of its current members. Federal price negotiations must hinge on threats to exclude given medicines from approved formularies, so that Medicare patients will be denied the latest and most effective drugs. Such exclusions in substantial part will be driven by statistical studies—"evidence–based medicine"—measuring comparative effectiveness for average patients rather than individual patients; but what is good for one patient is not necessarily what is good for another. And so AARP's price analysis will help to move the U.S. toward a system that shunts aside doctor/patient choice in favor of top–down decision making by federal bureaucrats. The law of unintended consequences roars yet again.

[permanent link]



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