Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 02-21-2007

To Save Later, Employers Offer Free Drugs Now
The New York Times, 2-21-07

Editor's Notes:

The Times reports that many large employers are finding that it is more cost effective to offer free or very low cost prescription drugs to their employees with chronic illnesses like asthma and heart disease.

Companies now recognize that "if you get people's obesity down, cholesterol down, asthma down, you save a lot of money," said Uwe E. Reinhardt, a health economist at Princeton University.

Despite the Bush administration's efforts to promote "consumer directed" health care, many companies are recognizing the limits to shifting too much of the cost of medical care to employees. Experience, Professor Reinhardt said, is contradicting the theory that "patients will be more prudent shoppers for health care if they ache financially when they ache physically."

Another motive for the business world could be to stave off a greater government involvement in health insurance, now that most presidential candidates and other politicians are promoting health care reform.

Big drug makers like Pfizer and Merck, which could benefit politically and financially from the employer drug programs, are also supporting the effort. Richard T. Clark, the chief executive of Merck, made the political connection in a recent trade journal article. "If we all don't do a better job, the private employer–based market will continue to weaken and the country will move forward toward rationing of care and greater government control, with greater pressure for a single–payer model with price controls," Mr. Clark wrote in the American Journal of Managed Care.

One clear motive is to help workers stay well, averting expensive emergency room care and hospital stays. As health coverage has grown more costly, many people have been skimping on care, and millions of Americans are going without health insurance altogether.

The lesson here is that health insurance is rising in cost; deregulation and competition that help to lower insurance premiums would make these kinds of insurance programs more affordable to consumers, and get employers out of the business of trying to micromanage their employee's health.

For instance, there is one simple reform Congress could enact today to help Americans with chronic illness: redefine Health Savings Accounts so that they can be linked to any form of health insurance, not just high–deductible plans. This would give employees the ability to find portable, affordable health insurance that fit their particular health needs, and ensure that their coverage won’t be dependent on their employers.

[permanent link]

Clinical Trials: Are Drugmakers' Studies Biased?
Newsweek, 2-26-07

Editor's Notes:

Cancer researchers released a study this week finding that studies of cancer drugs by industry sponsors reported positive results more often than those that were not sponsored by companies.

The media has jumped on this finding to imply that the industry is somehow "cooking" its clinical trial data but, at least in this Newsweek article, one of the study's authors withholds judgment on what it has, in fact, found.

NEWSWEEK: How did this study come about?

Dr. Jeffrey Peppercorn: As clinical researchers and breast–cancer specialists, we recognize that an increasing number of studies are developed through collaborations between academic medical centers and drug companies. In general, this has been a very productive collaboration. However, the amount of funding from pharmaceutical companies now exceeds that from the National Institutes of Health. In fact, pharmaceutical–industry investment in research exceeds the entire operating budget of the NIH. That makes it important to understand the influence that industry involvement may have on the nature and direction of breast–cancer research. We need to know if there are important clinical issues that aren't being addressed.

How did you conduct this study? We selected 10 leading journals for breast–cancer research and attempted to identify every breast–cancer clinical trial for a medical therapy that appeared in 1993, 1998 and 2003. We identified a total of 140 studies.

What did you find? There were essentially two major findings. First, in 2003, as compared to 1993, there were more studies with drug–company involvement—either drug–company funding or actually having a drug–company scientist as one of the authors. In 2003, 58 percent of studies reported pharmaceutical involvement, versus 44 percent in 1993. But that may be because of more stringent disclosure requirements in recent years. Second, studies backed by pharmaceutical companies were significantly more likely to report positive results. In 2003, the likelihood of positive results was 84 percent for studies with pharmaceutical involvement, versus 54 percent in studies without clear industry connections.

Our analysis was small, consisting only of 140 trials, but similar associations have been documented before, in stroke trials, psychiatry trials, cardiovascular trials and several other areas of clinical research. The one previous study in oncology, looking at multiple myeloma, also found that pharmaceutical studies reported positive results in 74 percent of trials compared to 47 percent of non–industry–sponsored trials.

How do you explain the difference? There could be multiple explanations. It could represent bias in the reporting or in the interpretation of results. Or it could be that these studies are in some way superior. Certainly for–profit companies are under a lot of financial pressure. Maybe that causes them to make smarter or safer choices about what drugs to bring to trial. We need larger and more detailed studies to figure out why there is an association between pharmaceutical involvement and positive results, but we should at least consider the possibility that this difference is valid.

That's a generous interpretation. To use an analogy, if a baseball player keeps hitting more home runs, it may be because he's using steroids, or it may be that he's a better baseball player.

I’d be more likely to bet on the steroids. I’m as worried about bias as the next person. But these collaborations have led to some real advances in cancer treatment, such as the targeted drugs Herceptin for HER–2–positive breast cancer and Gleevec for chronic myelogenous leukemia. focuses on drug development and they do it well, in which case it would be a shame to bash them for it. My patients definitely need more and better therapies, not fewer.

The interviewer leaves no doubt as to her bias: she thinks that industry-backed studies are the equivalent of baseball players using steroids. She may be right, of course, but there is no evidence that she is as of yet.

But we should also note that clinical trials, while very helpful, are not fail–safe. They often enroll patients who fit a very narrow profile, and their findings are only loosely generalizable to "real world" medicine.

As a result, many cancer medicines (perhaps as many as 50%) are used "off–label", i.e. to treat patients in a way that is not indicated on the drug's label. Getting a drug successfully through clinical trials is key for FDA approval—but the bottom line testament to a drug's efficacy and usefulness is how it is used in the real world. And, to judge by recent declines in cancer death rates, industry must be doing something right.

[permanent link]

Bargaining Down That CT Scan Is Suddenly Possible
The New York Times, 2-27-07

Editor's Notes:

The Times chronicles how the growth of Health Savings Accounts (HSAs) and other forms of consumer–directed health insurance are forcing providers to offer more transparent prices for their services.

Patrick Fontana twisted his left knee last spring while hitting a drive down the fairway on a golf course in Columbus, Ohio. But what really pained him was the $900 bill for diagnostic imaging ordered by his doctor.

Mr. Fontana, a 42–year–old salesman, has a high–deductible health plan coupled to a health savings account. Since he was nowhere near meeting his deductible, he was on the hook for the entire bill.

So he did something that insurance companies routinely do: he forwarded the bill to a claims adjuster, in this case My Medical Control, a Web–based company that reviews doctor and hospital bills for consumers.

After concluding that Mr. Fontana was not getting the best possible price, the company's representatives called the imaging facility and demanded a lower one, promptly saving him $200—minus a 35 percent collection fee. "I asked before I went in to the clinic how much it would cost, and they just will not tell you," he said later. "I didn't know until I got the bill, and at that point I figured I had nothing to lose."

The savings are possible for one reason: medical care is often priced with the same maddening, arbitrary opacity as airline seats and hotel rooms. "The average provider—doctors or hospitals—has between 5 and 100 reimbursement rates for the exact same procedure," said Timothy Cahill, president of My Medical Control ( "A hospital chain with multiple locations may have 150 rates for the same procedure. Consumers don’t know this."

The varying reimbursement schedules, negotiated between the nation's 850,000 providers and more than 6,000 health plans, have been kept all but secret. Consumers almost never get information on prices before treatment. Even insurers do not know what other health plans are paying.

Despite the complexity, the Internet has begun to open a window on this surreal world, allowing consumers to compare costs and, occasionally, to discover affordable alternatives.

As growing numbers of consumers and employers demand price transparency from providers, we should see greater efficiency and cost savings throughout American health care. Even the federal government is getting into the act. The process is moving incrementally, but it is definitely gaining steam.

[permanent link]

New drug to fight cancer may get the cold shoulder
Chicago Tribune, 2-27-07

Editor's Notes:

This Tribune story opens a window into the expensive and unpredictable world of drug development—and explains why intellectual property rights (patents) help drive medical innovation.

A new treatment for cancer could cost as little as $2 a dose and be as easy to administer as taking a pill or getting a shot. But scientists fear that their struggles to find financing for further research could keep the treatment from ever reaching the public.

In January, scientists working at the University of Alberta discovered that dichloroacetate, or DCA, a drug long used to treat rare metabolic diseases, seemed to halt the spread of cancer.

The discovery has been met with cautious optimism by the medical community and with excitement among cancer patients eager to participate in clinical trials. However, because the drug is not patented and can be produced by multiple companies, it is unlikely to be profitable and therefore has yet to appeal to the pharmaceutical companies that researchers typically rely on to finance clinical trials.

"There is no real way a company could invest and get a return on this," said Dr. Evangelos Michelakis, whose team of scientists conducted the research...

According to the National Cancer Institute, testing DCA's effectiveness will require holding clinical trials testing each type of cancer with thousands of patients. These trials could cost anywhere from $1 million to $100 million, depending on the cancer, said a spokesman for the cancer institute. These experiments could begin immediately, because the U.S. Food and Drug Administration and Health Canada granted limited approval for DCA more than 30 years ago for use in fighting rare diseases such as congenital lactic acidosis, a metabolic disease that causes organ failure and death in infants.

Getting the money to do that, Michelakis has discovered, is not so easy. DCA's discovery patent expired several years ago, making it difficult to find a pharmaceutical company willing to finance the trials. When drug companies hold a patent to a medication, they can set the price high because no other company has the right to produce it. Without this patent, any company can produce the drug, forcing the price down; Michelakis estimates that DCA would cost less than $2 a dose.

"It's a real issue," said the head of a pharmaceutical company that produces cancer–fighting drugs and who spoke on condition of anonymity. "It would be difficult to imagine who would take on all the expense and risk of developing the drug only to have another company mass–produce a generic version."

Drug companies are apt to be accused of profiting from human misery. But it would be more apt to say that they only make money when they alleviate suffering, and that profits are a powerful incentive for companies to bring new products to market as quickly and efficiently as possible. Without those incentives, potentially valuable therapies would take longer to develop or never be developed at all.

[permanent link]

Independent Lens; Counter-detailers help doctors wade through drug company marketing
The Boston Globe, 2-27-07

Editor's Notes:

Dr. Jeffrey Avorn, a Harvard Medical School professor and longtime critic of the pharmaceutical industry, has found a way to inject his point of view on the relative value (or lack thereof) of new drugs into doctor's offices: "counter–detailers" who try to present a different view of the usefulness of new medicines than the "detailers" used by drug companies to promote their wares.

Drug companies flood doctors' offices with attractive salespeople whose mission is to boost the number of prescriptions written for their products. But some say that the tactics used by the representatives, known as detailers, wrongly hype expensive new drugs when older, cheaper treatments work just as well.

To combat the sales pitches, critics are now employing the same marketing methods that drug companies use to sell doctors on new products.

The $1 million Independent Drug Information Service project, supported by the Department of Aging of the Commonwealth of Pennsylvania and run by Brigham and Women's Hospital in Boston, is sending out its own representatives, some of them former drug company detailers.

These consultants—or counter–detailers, as they are called—inform doctors about which drugs work best. Sometimes that means recommending older, less expensive treatments. Their messages are driven by hard science, backers of the service say, not pharmaceutical company earnings reports.

"I feel that that is a key, missing piece in the healthcare system," said Dr. Jerome Avorn, a Harvard Medical School professor who has been the driving force behind the drug information project.


Avorn has not analyzed the cost savings that result from the one–on–one sessions with doctors. But he has looked at how the prescribing patterns of doctors who wrote Celebrex prescriptions changed after the counter–detailers compared the heart risks and stomach–sparing benefits of such new–generation drugs with other painkillers.

"There was a significant decrease in their [Celebrex] prescribing after the visit, compared with similar doctors who did not get visited," Avorn said. "The doctors overwhelmingly appreciate this and tell our people, 'When are you coming back?' and 'I want you to tell me about statins next.' They're telling us, 'This is a valuable service,' and they actually want to see it continue."

As far as we're concerned, when it comes to providing information to consumers and physicians, the more the merrier. After all, patients can get comparative information on drugs from Web MD, Consumer Reports, and their insurance companies; doctors, too, have lots of sources of information to draw from that don’t include drug reps.

But the industry does a good job of providing information on new medicines to tens of thousands of doctors on a scale that Dr. Avorn could never hope to match.

The lesson to draw here is that there is no one "right" way to disseminate information to doctors and patients—because each player in the health care sector (including Dr. Avorn) is promoting their own interests, which do not always align with interests of individual patients.

The best solution is to give consumers more control over their own routine health care spending. For instance, some consumers might prefer to take Celebrex and pay more for that drug, if they felt that it gave them better pain relief; others might do just as well taking cheap generic aspirin. There is no "one size fits all" approach to medicine.

What Dr. Avorn should look at next, however, is how to get better information to patients on the quality of the doctors and hospitals they routinely use. That would really be revolutionary.

[permanent link]

Emerging Drugs Show Promise Against HIV
Wall Street Journal, 2-28-07

Editor's Notes:

Antiretroviral drugs have helped transform AIDS from a death sentence into a serious, but manageable chronic disease for millions of patients around the globe. But the AIDS virus quickly mutates to develop resistance to these drugs, meaning that without a steady stream of new treatments, older medicines will eventually become obsolete.

Thankfully, at least two new types of AIDS medicines are set to come to market this year, which may help slow the phenomenon of AIDS drug resistance.

Two of the experimental medicines take entirely new approaches in thwarting the HIV virus; a third overcomes resistant viruses by taking a new tack on an enzyme many older drugs target.

Amid scores of drugs in the pipeline presented this week at the annual Conference on Retroviruses and Opportunistic Infections in Los Angeles, several drugs look promising in pivotal efficacy studies including Merck & Co.'s MK–518 and Pfizer Inc.'s maraviroc. University of Pittsburgh researcher John Mellors called the drugs' performance "a really remarkable development" and the best he'd seen since the debut of AIDS cocktail therapy over a decade ago. They, and another that's garnering attention, Johnson & Johnson's TMC125, are heading for review by the Food and Drug Administration this year.

Because HIV mutates quickly to outwit drugs, cocktails of two or three drugs are used to simultaneously attack the virus in different spots. The effectiveness of these cocktails is greater than the sum of their parts.

But doctors estimate tens of thousands of American patients are infected with viruses that have become resistant to at least one class of HIV drug, weakening the cocktail approach. Some patients who have fought HIV for years have now run through the roughly two dozen drugs available.

In these patients, the mutant HIV is rebounding, suppressing their immune systems and making them vulnerable to infections from other viruses, bacteria and fungi. So the need for fresh medicines is growing more acute. Now years of research and testing appear ready to pay off.

Data on clinical tests of the new drugs buoyed spirits at the conference. "It's very exciting," said Houston–based activist Nelson Vergel, who has wrestled with HIV since 1983. "This is the first time we've had so many agents for multidrug resistance from one meeting," he said.

[permanent link]

Project FDA.


home   spotlight   commentary   research   events   news   about   contact   links   archives
Copyright Manhattan Institute for Policy Research
52 Vanderbilt Avenue
New York, NY 10017
(212) 599-7000