Medical Progress Today
  Volume 1, Number 16
  November 5, 2004


In the Spotlight

Figuring the Benefits and Risks of Drug Therapy
Michael Weber, M.D., 11-5-04

A large number of people have arthritis and other serious aches and pains and so there is a strong interest in developing more effective ways of treating these conditions. The most widely used types of pain killers have been aspirin-like drugs called non-steroidal anti-inflammatory agents that are available under a variety of brand names at drug stores and supermarkets. But these treatments can have a serious drawback: in susceptible people they cause irritation and even more severe damage to the linings of the stomach and small bowel, leading to problems like ulcers and bleeding that can sometimes require major surgery and on occasion even prove fatal.

Continue reading . . .

Featured News:
Is Kaiser The Future Of American Health Care?
The New York Times, 10-31-04
Featured Commentary:
EDITORIAL: The answer isn't in Canada
The Star-Ledger, 11-2-04

News

Is Kaiser The Future Of American Health Care?
The New York Times, 10-31-04

This is a very laudatory article on California-based Kaiser Permanente. Their CEO, George Halverson, sums up the secret of their success in the closing sentence: "With the right information and the right incentives . . . capitalism creates very good solutions."

Critics of America's health care system often deride the U.S. system as a market-based system that is ineffective, unjust, and ridiculously expensive. These criticisms have merit, but with the caveat that it is unfair to call America's current health care arrangements market-based: virtually all of U.S. health care dollars are spent through government or employer funded health insurance, and individual consumers have virtually no say in how those dollars are spent. That system may be many things, but its persistent shackling of individual preferences disqualifies it as a market.

Why is Kaiser Permanente garnering so much media attention and critical praise? It does a lot of things right. It focuses on quality outcomes through aggressive prevention and disease management plans, uses technology to improve and monitor patient care, owns all its own hospitals and clinics, and employees more than 11,000 physicians. All-in-all, Kaiser is a modern, nimble corporate firm that uses information technology to manage its employees and implement "best practices" quickly and efficiently. One sign of its success is that, in Northern California, "Kaiser has sharply reduced the death rate for its three million members there in recent years by monitoring and controlling blood pressure and cholesterol levels and by promoting the use of aspirin and beta blockers (to reduce the risk of heart attacks) and statins (to lower cholesterol)." Kaiser's members have significantly lower mortality rates for heart disease than the surrounding Northern California population, even after taking age and gender into account.

So, how do we institute a national, government-run Kaiser model? You don't and you can't. A national plan would short-circuit the quality incentives driving the Kaiser model by eliminating competition and instituting a cumbersome bureaucracy that would strip it of its flexibility and ability to innovate rapidly. A private firm's success is driven by market feedback; a national system locks consumers into the system and gives the government sole control over funding, meaning that control is from the top-down, not the bottom up.

Freeing up consumer demand, through Health Savings Accounts and a national insurance market – coupled with government vouchers for low-income Americans to buy health insurance – would force more insurance providers to embrace Kaiser's quality based health care model or lose out in the market. Quality-driven health care competition would build on the best elements of the Kaiser model without forcing one-size fits all insurance on every American.

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Novartis Drug Gains Wider Use
Wall Street Journal, 11-1-04

The FDA has approved the drug Femara to reduce the risk of breast cancer recurrence in postmenopausal women who have already been treated with Tamoxifen. Femara is already available in the U.S. market to treat women with metastatic breast cancer, but it has now been shown to reduce “the risk of breast cancer recurrence by more than 40% in women taking Femara after an average of 2.5 years compared with women on a placebo, or sugar pill.” The trial testing Femara’s effectiveness had such good results that its placebo wing was offered the chance to switch to Femara therapy. This is particularly good news for women, for while Tamoxifen has proven itself to be a highly effective breast cancer treatment, “it appears to lose its effectiveness after five years and might increase the risk for other types of cancer” thereafter.

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Vaccine Works to Prevent Cervical Cancer
The New York Times, 11-2-04

An experimental vaccine has proven that it can not only prevent cervical cancer, but that its protection against a virus (called human papilloma virus, or HPV) that causes cervical cancer is durable over time. Merck, the vaccine’s developer, had originally tested the vaccine in over 1,500 women between the ages of 16-23 who received three vaccine inoculations over the course of six months. Not only did it provide 100% protection against the virus, but its protection was still “100 percent effective” four years later.

This vaccine is a real breakthrough since HPV viruses – which are sexually transmitted and very common in human beings – cause nearly every case of cervical cancer. However, the current vaccine is not the one Merck plans to market; a second vaccine is currently being tested that “will immunize against four [HPV] strains: the [two] main causes of cervical cancer…and two other viruses that cause genital warts.” Once approved the vaccine may prove particularly helpful in poor nations, where regular gynecological exams are rare and death due to cervical cancer is much more common than in the U.S. Nearly 500,000 cases of cervical cancer are diagnosed every year worldwide, along with 225,000 deaths – only 4,000 of which are in the U.S.

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Medicare Takes Steps Broadening Coverage of Cancer Care
The New York Times, 11-2-04

In September, the Centers for Medicare and Medicaid services drew heavy fire from physicians who treat cancer after it announced that it would be reducing the fees paid to oncologists who administer cancer drugs to Medicare patients in their offices. Everyone agreed that the prices that Medicare paid for those drugs was vastly inflated, but oncologists claimed that Medicare should retain its original fee schedule since they provided patients with extra care well above and beyond the cost of the drugs themselves.

Mark McClellan, CMMS Administrator, has quelled much of the fervor by establishing demonstration programs that would reimburse oncologists for administering cancer drugs provided that they also collect data on patient outcomes. In exchange for $130 per patient per day, oncologists will record patient information on pain, nausea, and fatigue resulting from chemotherapy. In cooperation with the National Cancer Institute, the agency has also agreed to cover some colon cancer drugs off-label when they are used to treat other cancers, provided that doctors agree to participate in clinical trials that will monitoring their effectiveness.

Dr. McClellan’s Medicare reforms may be controversial, but only because he is trying to shift the agency from a fee-based model to a quality-based model that reimburses providers for offering more effective care to their patients and collecting empirical data on what really works. Once this data is made public, it will hopefully help spur a national shift towards quality and outcome based health care, which would benefit all Americans.

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U.S. drug prices 81% higher than in 7 Western nations Study of name brands shows steep rise in differential since 2000
The San Francisco Chronicle, 10-29-04

Patented drugs ought to be sold with a tiny bull’s-eye on their packaging, since they are inevitably the object of critics who want to pin America’s health care woes on greedy corporations. Fact: America’s prescription drugs are more expensive than elsewhere in the developed world, although not by as wide a margin as most people think. Fact: America’s policy of letting drug prices fluctuate with demand rewards companies for their research and investment and encourages more pharmaceutical innovation. The greater number of new molecular entities released first in the U.S. as compared to Europe, where there are strict drug price controls, vindicates this policy since America is often the first market that gains access to innovative new drugs.

Studies like this one also neglect to mention that, thanks to its laissez-faire approach to prescription drug prices, the U.S. also has the largest market for generic drugs (about half of U.S. prescriptions are for generics), and U.S. generic drugs are cheaper than they are in Europe. If this enormous component of the American prescription drug market was taken into account (which this study does not do), American drug prices would appear much more competitive with European and Canadian standards. Indeed, Patricia Danzon, a health economist at the University of Pennsylvania’s Wharton School of Business, estimated last year that “netting out exchange rate movements, Canadian [drug prices] are only 14 percent lower than U.S. prices.” (See Prices and Availability of Pharmaceuticals: Evidence From Nine Countries," with Michael F. Furukawa.)

Last week, in the New Yorker, Malcolm Gladwell took up the issue of prescription drug prices and noted that most of the total increase in prescription drug spending in the U.S. was due to widening drug treatment for common ailments – for diabetes, heart disease, and asthma, among other conditions – which undoubtedly has enormous patient benefits. The question then is not how much money we are spending on prescription drugs, but how much value we get for the money we are spending (whether on generics or branded drugs).

There is a significant body of data showing that spending on prescription drugs displaces other, more expensive forms of patient care – hospital visits, for instance – and that the shift to drugs from other forms of care is actually a natural and beneficial development. Focusing only on the prices of branded drugs, as this paper does, while ignoring other trade-offs in price versus value – or the degree to which the U.S. underwrites global pharmaceutical R&D – skews the debate over prescription drugs towards the foregone conclusion of price controls.

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Vaccine Useful Against Cancer In Clinical Trial
The New York Times, 10-29-04

For the first time an experimental cancer vaccine (Provenge, by the biotech company Dendreon) has shown that it can extend patients’ lives in a late-stage clinical trial. (Provenge was given to patients with advanced prostate cancer who had stopped responding to traditional hormone therapy.) Cancer vaccines like this one don’t immunize patient’s against disease the way normal vaccines do. Instead, researchers hope to use cancer vaccines to improve the effectiveness of a patient’s own immune system by training it to recognize the cancer as a foreign invader. While the exact data on the vaccine has yet to made public, if it holds up under public scrutiny it may represent a critical validation for the underlying treatment concept.

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How Bad Will the Lawsuits Get? Really, really bad.
Forbes, 11-1-04

“Will Vioxx be the next Baycol, or Rezulin, or fen-phen?” To early to tell, but if history is any guide Merck may find itself in tort hell. Trial lawyers are remarkably adept at mounting national litigation efforts, capitalizing on media attention, pooling information and critical documents, and combining thousands of plaintiffs with minor or dubious injuries with a handful of severely injured victims to create national class action lawsuits. Once trial lawyers have battle tested a winning formula, they will shop relentlessly for judicial forums where they can play on anti-corporate prejudices to generate multi-billion dollar jury verdicts.

Fortune opines that “given the millions who were taking Vioxx, it is a statistical certainty that thousands suffered heart attacks and strokes. Obviously Vioxx won’t have caused all those, but plaintiffs lawyers will likely have little trouble finding medical experts who’ll testify to a causal connection.” The real issue in mass tort cases is not compensating people who were injured. Everyone agrees that corporations should compensate those plaintiffs. The problem is that the tort system has no mechanism for separating out real injuries from spurious ones, and commonly compensates lawyers handsomely for clogging the system with non-meritorious injuries.

Reasons for restraint: Any drug taken by over 20 million people (as Vioxx was) will undoubtedly have side effects, some severe. Other widely used drugs Americans rely on (anti-inflammatories, “the pill”, diuretics for high blood pressure) have serious risk profiles ranging from ulcers, to stroke, to diabetes. Given the current litigation climate, those drugs might not be approved today if they had to navigate the same hurdles – despite their enormous benefits. What we need (and what everyone is working towards) are biomarkers and other profiling tools that would allow physicians and pharmaceutical companies to predict how different drugs affect different people – personalized medicine that would help doctors keep drugs away from patients who are at high risk for serious adverse events.

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Ancestry Trumps Race In Predicting Efficacy Of Drug Treatments
Wall Street Journal, 10-29-04

The pendulum swings in strange ways. The late 19th and early 20th century was in many ways a nadir for science in the public square, an age when Social Darwinism and eugenics (pseudoscienes) joined forces with Nazism to identify “degenerate” races and helped to ignite a conflagration of hate.

Since then, scientists have scrupulously avoided the topic of race, or, when they touch on it at all, deride it as an empty concept. Small wonder then that the new science of pharmacogenetics, which seems to tell us that some drugs work differently in different racial and ethnic groups, has stoked controversy by aligning science on the side of genetic racial differences. The controversy was spawned by a study showing that a drug designed to treat congestive heart failure was ineffective in white patients but highly effective in African Americans (the drug in quitestion is BiDil). In short, the latest genomic research tells us that at least some genes cluster in ethnic groups.

Still, the issue is generating more heat than light. After all, visible racial differences (with the exception of certain well isolated ethnic groups) correlates very poorly at the genetic level. For instance, “about 30% of white Americans have enough non-European ancestry – more than 10% – to make self reported race an unreliable indicator of their genetic make-up.” The same is probably true across the entire American melting pot. The real question is figuring out which drugs work best in which gene clusters and why – i.e. we need genetic markers for disease that correlate with high drug response rates or, for that matter, adverse events.

Even so, as genetic biomarkers are developed we are apt to stumble into truly thorny questions of screening for disease propensity, the creation of genetic databanks, and insurer access to genetic information. However, despite these practical and ethical hurdles, our first glimpses into pharmacogenetics promises to help physicians create personalized therapies for individual patients, rather than the treat-first-ask-questions later standard that prevails today.

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Commentary

EDITORIAL: The answer isn't in Canada
The Star-Ledger, 11-2-04

“It’s time to face reality: Canada cannot solve the U.S. prescription drug problem.” True enough, but the editorial goes on to endorse a ban on direct-to-consumer prescription drug advertising, which the Star-Ledger thinks “might do more to lower prescription drug prices than importing drugs from Canada.”

This is a doubtful prospect since the real driving force behind America’s prescription drug spending is our aging population and steadily rising affluence. Americans are notoriously impatient with any kind of physical inconvenience or impairment, and demand more prescription drugs to reduce the ill effects of aging – and our cheeseburger-laden diets. Right now, Americans spend money on health care like they were playing with other people’s money – which they are, through employer based insurance coverage and government programs.

Advertising serves the valuable function of giving consumers and physicians better information about new drugs and the relative effectiveness of different drugs. It would have an even more valuable role in a consumer-driven health care system, where companies would have to justify their drug’s cost directly to consumers, rather than depending on insurers to automatically cover the cost of new treatments.

Until more responsibility is shifted back to individuals for their own health care costs (through high-deductible HSAs) and Americans have some financial skin in the game, health care costs will continue to spiral out of control, prescription drug advertising notwithstanding.

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Medical Progress Today is published by the Center for Medical Progress at the Manhattan Institute for Policy Research.

For more information about Medical Progress Today, please contact the managing editor, Paul Howard, at phoward@manhattan-institute.org, or via telephone at 212.599.7000, x319.

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HOME

SPOTLIGHT

Figuring the Benefits and Risks of Drug Therapy

NEWS

Is Kaiser The Future Of American Health Care?
Novartis Drug Gains Wider Use
Vaccine Works to Prevent Cervical Cancer
Medicare Takes Steps Broadening Coverage of Cancer Care
U.S. drug prices 81% higher than in 7 Western nations Study of name brands shows steep rise in differential since 2000
Vaccine Useful Against Cancer In Clinical Trial
How Bad Will the Lawsuits Get? Really, really bad.
Ancestry Trumps Race In Predicting Efficacy Of Drug Treatments

COMMENTARY

EDITORIAL: The answer isn't in Canada
Center for Medical Progress 
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