[Ip-health] Wash Post op-ed: Prescription for Reform

[Mike Palmedo]

http://www.washingtonpost.com/ac2/wp-dyn/A24136-2003Nov30?language=printer


Prescription For Reform


By Merrill Goozner

Monday, December 1, 2003; Page A23

The prescription drug benefit sections of the Medicare legislation just
passed by Congress do nothing to rein in the rising cost of
pharmaceuticals or to foster innovation in the drug industry.

In fact, it will probably make a bad situation worse.

A 2001 Nobel Prize went to three economists who explained how unequal
access to information distorts a marketplace and robs consumers. The
only solution to the "imperfect information" problem is for government
to either set prices or pass prudent regulations aimed at correcting
mistaken purchases by poorly informed consumers. A good example of the
latter is automobile lemon laws.

Under current regulations, no marketplace is more prone to the problem
of unbalanced information than pharmaceuticals. As the late U.S. senator
Estes Kefauver (D-Tenn.) put it while investigating drug industry
price-fixing in the early 1960s, he who prescribes does not buy and he
who buys does not prescribe. Combine that with the fact that neither the
drug purchaser -- whether it be patients or their insurance companies --
nor the prescriber -- the physician -- has very good information about
the best and most cost-effective use of most drugs, and you have a
prescription for price gouging.

The root cause of this information deficit can be found in the nation's
system for studying and approving drugs, whether they are supposedly
innovative molecules seeking government approval for the first time or
older medicines that have been around for years. For the most part, we
expect the pharmaceutical industry to conduct those tests.

The result is that both the public and the medical profession receive a
skewed analysis of the relative worth of various medicines.

Yes, a new drug is safe.

Yes, it is somewhat efficacious against the targeted disease; no drug is
universally effective, and many drugs help only a small portion of the
people who take them. But how does it stack up against those already on
the market?

Only in rare cases does the industry engage in comparison trials, since
the risk of losing -- and getting totally shut out of a market -- is too
great.

It is much easier to develop new drugs to replace those coming off
patent and then push the latest (and therefore more expensive) offerings
by sending out an army of salespersons, enrolling physicians in
semi-scientific "seeding" trials whose real purpose is to expose their
patients to the new drug or flying physicians off to exotic locales for
industry-sponsored continuing medical education seminars, where the
latest results of seeding trials can be unveiled before an afternoon
round of golf.

Patients have even less information about the latest drugs. Since 1997,
when the Food and Drug Administration lifted its ban on
direct-to-consumer advertising, potential drug customers have been
exposed to a rising tide of commercials with virtually no scientific
content. The medicines touted in these ads are new. But are they truly
improved? Only comprehensive comparative trials, conducted by a neutral
third party, can provide that kind of objective information.

On the rare occasion of such trials, they have generated surprising
results.

For instance, last winter, the National Institutes of Health released
the results of its decade-long $80 million test of competing blood
pressure control medicines.

It showed that diuretics, so-called water pills that have been around
since the 1950s and can be purchased for pennies a day, were slightly
more effective than the still-on-patent calcium channel blockers and ACE
(angiotensin converting enzyme) inhibitors.

This is not to say that the newer drugs aren't the right choice for many
patients, or that elderly Americans who need more than one drug to keep
their blood pressure under control shouldn't have access to them. But
with $15 billion being poured into blood pressure medicines every year,
the study's authors believed the nation's health care system could save
billions by starting most patients off with diuretics.

Two easy reforms would rectify this information deficit.

First, the government could empower NIH or an independent agency to
conduct systematic comparative trials on all classes of medicines with
multiple entries. The results of those trials would provide physicians
with authoritative clinical practice guides to the best and most
cost-effective medicines.

Second, the FDA's drug approval process could be amended to include
comparative clinical trials for any new drug that a company wants to
bring to the market.

The industry will complain that the additional clinical testing would
drive up the cost of approving new drugs and choke off innovation.

But just the opposite would occur. The pharmaceutical industry currently
spends more than 60 percent of its $34 billion research and development
budget on clinical trials.

But much of that money is wasted on trials designed to benefit the
marketing arms of the companies and winds up generating more noise than
useful information for practicing physicians.

A new requirement that drug companies test their latest offerings
against existing medicines would force them to focus their R&D budgets
on truly innovative medicines and help identify the best uses for
existing drugs.

/Merrill Goozner, a Washington-based writer, is author of the
forthcoming book "The $800 Million Pill: The True Cost of New Drugs."/