Graham Walker (of Gross Anatomy fame) has created an excellent Flash animation to explain single payer to the masses. Go take a look and if you don’t agree, how about creating your own about HSAs, innovation, managed competition or whatever. Getting more Americans to understand all this health policy stuff is not a bad idea at all!
PHARMA: The real debate behind reimportation
So to continue from last week’s rant on reimportation, I got an email from the subject of the rant Stephen Chang. (And correcting something I said in my original post Stephen’s group does have a website Cures California.org (I just couldn’t find it easily on Google). Stephen wrote to me saying:
My you get upset easily! I certainly understand your points and the panels and probaly agree on some of them. However, uncontrolled illegal importation from Canada via trans shipments is not the answer. This will potentially make the issue worse as we will jeopardize our own fragile drug supply. I too have been looking for that answer in how to increase access to drugs and fully agree that something needs to be done. Do you have a sensible plan/policy that could be a win-win for everybody? Would love to hear about it
So I thought about this for a while, but before I spell out my ideas it’s worth noting that many people within the pharma business have serious problems with the industry’s stance. Don’t believe me? Take a look at this thread on the pharma-marketing list-serv about pricing, and look at this opinion piece by Pharma Marketing editor John Mack. John says correctly that ‘Pharma needs to realize that it just can’t “win the argument.” ‘ John also has two excellent articles on both the crisis in professional detailing and (on p 10) about better models to target physicians. There are also stories in the Pharma professional press on how high prices are hurting compliance (i.e. sales). This is all by way of showing that the industry has many sympathetic friends and even big-time supporters who feel that it has lost its way. So this is my reply to Stephen–it’s the closest I’ll ever come to trying to get big pharma to find a “Third Way” out of the mess it’s in.
Stephen–I don’t mean to get angry with you in particular, but you said one or two things on the show that I’m afraid were the straw on the camel’s back, following a year or two of me listening to PhRMA fail to make a serious argument in this debate. I don’t think you did yourself or your organization any favors by a) not speaking to the profit level of pharma companies, and — when countered with two GAO reports by your opponent on the show brought up — b) stating that only that research is expensive (“costs hundreds of millions of dollars”) without producing any evidence of its effectiveness or that pharma actually spends that much on R&D, especially when I’d already said in my call that marketing costs are nearly 3 times those of R&D.
However, you are not a professional PR person, you have a real job and a sincere position, so let me try to tell you why I think that your current position is counterproductive.
1) A simple executive order could allow the FDA to investigate and certify as safe a number of Canadian pharmacies, or a number of US based pharmacies that import from certified European pharmacies. Everyone knows that and that’s why the safety argument (or, worse, now the “terrorism” argument) is so disingenuous. Failing to do this when people are importing pharmaceuticals anyway is in fact increasing the risk of safety violations and means that the government’s position (bought and paid for by a short-sighted PhRMA) is actually increasing the risk to the American people.
2) The reimportation issue cannot be that big a deal for the US pharma market. Currently it’s less than $1 bn of a $200 billion market. Even if it went up tenfold it would be less than 5% of the market. PhRMA’s stance does two things. It stops some seniors getting drugs at a decent price (not that many are stopped I admit, but there are some who don’t want to break the law and it means that reasonable people are forced to flout the law). More importantly, it gives the anti-Pharmaceutical left a huge stick with which to beat the industry. More than 80% of seniors are opposed to the ban. Sometimes when you’re that outvoted you have to realize that your position is untenable.
3) The likely consequence of this is that there’ll be a backlash either in 2005 or 2007 or 2009 against big pharma, and severe price controls will come in shortly thereafter. The only people within pharma who don’t care about this are the senior executives of the big pharma companies who are judged on their current quarterly profits. People who care about the creation of new drugs and the availability of those drugs five to ten years out (i.e. you and your coalition) should be concerned about creating an environment in which those drugs for which the efficacy and cost-effective can be proven are available to patients. Currently big pharma’s only trump card is the vast amount of cash it has spent with the Republicans (even if some of them haven’t stayed bought as they can read polls too). That luck will run out sometime –and this November is my guess as to when.
OK, you asked how we get to a better place? I propose three quick measures which wouldn’t cost pharma companies much and would put them in a much better spot.
a) Help the FDA set up a safe channel for drugs from Canada and commit to supplying a decent amount of drugs in a safe import market. I suspect the amount would be smaller than PhRMA fears, and this would remove the number 1 image problem that pharma has.
b) Announce a voluntary reduction in the size of sales forces and marketing budgets, and transfer some of that money into R&D spending, and some into price cuts. This will have to happen anyway, and by getting ahead of the game pharma will be able to control it. Having the CEOs of Schering, Pfizer, GSK, Amgen, etc take a public salary reduction down below $5m from their current stratospheric levels wouldn’t be a bad idea, although it would alert the public to the obscene amounts they get now.
c) Realize that there is a long-term cost problem with health care and set up a system to deal with it. Expecting the rest of society to keep paying more and more into the bottomless pit of health care costs is not only heads-in-the-sand foolish, but it ends up denying access to health care insurance and basic care to millions of Americans. Pharma R&D has some potential to actually alleviate health care costs (the success of Tagamet in reducing ulcer surgery is a prime example, but the replacement of bone-marrow transplant with Gleevac is another). Pharma should be starting a real debate about how as a society we are going to deal with a future of genomics-inspired drugs, and which ones we should be funding. Again if pharma doesn’t lead that debate, the government will in a few years, and it’ll be much less pretty that you and your group would like.
QUALITY: DSM–Alive and kicking?
A while back I wrote about the VA and its care management program and in that post I noted that DSM appeared to be getting bigger but wasn’t sure as to whether it was a big deal. I took that discussion over to the very active DM Forum list-serv and it spawned a great deal of posting, which by now has veered off into the realm of Chaos Theory and non-iterative prisoner’s dilemmas. But in the brief period before the philosophers took over and while it stayed on message there were some interesting responses.
The most interesting was from Al Lewis who’s Disease Management Purchasing Consortium essentially owns the research and RFP-type consulting in the space. As no one else is really looking into this as a research business, I find that to be a proxy for it being a small market. I suggested to Al that as Gartner, Forrester, Advisory Board, Harris, Datamonitor etc hadn’t made much of run at it, as a derived anecdote, it suggested that this isn’t that much bigger an area of focus than it was 5 year ago. Al responded to me that “the field has been growing at 22-25% annually and for 2004 will exceed $800-million (including postacute patient mgmt). “ The recent news that market leader American Healthways has seen its revenue in 2003 grow 35% to $165m probably bears out Al’s estimate. In another reply later he suggested that the internal use of DSM was broadly equivalent to that spent externally. So one can guess that roughly a little under $2bn is being spent on disease management programs. To put it in perspective, if the entire DSM business was a drug, it would be less important than the second ranked Cox-2 inhibitor. You can get much more data and information from Al (although it will cost you actual money–as it should!). He also noted that:
The reason these other orgs haven’t made a run at it (or me) is that I pretty much own the space. The DM companies are private for the most part–I’m the only one who can estimate their revenues because I get their RFPs with average pricing and # members. And in the case of the Advisory Board at least, this isn’t their market–no one on the hospital side will spend a lot of money to learn about this field.
Again that’s all true, but if the market was ten times the size Al would find more competition in his niche. But the bigger question is even if it’s growing relatively fast from a small base, has DSM lived up to its promise of becoming a real market? On this broader point Al writes:
The Disease Management Purchasing Consortium tracks revenues by vendor and has been doing so since well before “Monica Lewinsky” was a household name and I can tell you with drop-dead certainly that the field has been growing roughly 25% a year.
It’s a little like soccer. How, might you ask, is disease management like soccer? Well, when I was a kid all the big tough kids (the ones who were getting to third base in sixth grade but who now mostly sell used cars, or, if they are lucky, quality pre-owned vehicles) played football at school. Our school offered soccer to the rest of us, to keep us off the streets (since we listened to the Monkees, that’s how cool we were, I’m afraid the streets would have had little to fear from our being on them in any case). Well, when one of our parents friends or some other random adult asked what sport we played and we said “soccer” we had to explain what soccer was. Likewise, seven years ago when you said you were in “disease management” you had to explain to people–even people in managed healthcare–what disease management was. Now, even ordinary cocktail-party-type people kinda sorta know. That, my friend, wouldn’t be happening if the field weren’t growing by leaps and bounds.
Now Al’s current style belies his alleged 6th grade wimpiness. I grew up playing soccer in the UK–it’s a real hard man’s game there–and there are plenty of fat, bald middle-aged men limping around London who wish they hadn’t run into a dirty central-defender called Holt in their youth. And for that matter, if you saw the Olypmic women’s soccer final, you might have noticed some pretty rough stuff being dished out by both the Americans and the Brazilians, and The Guardian indicated that the Americans kicked the Germans off the field in the semis. That’s what less talented but very determined teams do to win in sports. (England’s 1966 World Cup Win is a case in point)
However, to return from that little digression, you might think of taking Al’s point about DSM and soccer getting more important in the US together. But it would have been more convincing if it hadn’t been tested by another poster who said that “I was at a cocktail party just last night and happened to mention disease management and the general response from folks was: ‘but, isn’t that what doctors do?’“ David Tinkelman, MD from the National Jewish Medical and Research Center backed up the cocktail party folks:
Some times, people who work in the provision of healthcare services called “Disease Management” forget the reality that this small intervention is but a part of the larger world of management of disease. In that world, the reality is that the principal relationship is between the patient and a physician (not necessarily an ongoing relationship, as in those who primarily seek their care in emergency rooms and clinics). It is in that relationship that medications are prescribed, care is administered,prevention is applied and presumably trust is established. Most external entities who provide “disease management” services do not provide medications directly, hands on care, and take direct care and responsibility of emergency and life threatening situations. These have been and are the roles of the physician community. To believe that outside entities really provide management of disease without direct physician input is putting on blinders to the reality of the healthcare system as we know it in the United States.
But on the other hand Robert M. Ross, MD wrote:
I am not completely convinced that physicians “have” to be the lynchpin in the process. I have been involved in too many DM programs that achieved remarkable results without and sometimes despite physician involvement. However, for those that cannot live without them, there is no option other than Pay to Play programs. Yes, there are some physicians who will strive to do everything for their pts, but for most, it is not practical or financially sound.
So–assuming that DSM programs aimed at patients outside their interactions with physicians can only get us so far–it appears that we’re stuck in a world in which the doctors can’t or won’t get involved, but are needed to make the big changes. So what do the doctors need? Obviously incentives is one thing. But another is technology to support DSM in the clinical workplace. The CHCF had a roundtable looking into IT use in Chronic care management which reported this week.
Funnily enough the report was written by my colleague Robert Mittman who spent the 1990s being the most pessimistic person I know about the adoption of IT in the clinical setting, and may have been too optimistic! The report is an excellent summary of the state of play, and it basically says that in the small to medium sized physician’s practice–that is where most Americans get their health care–we are nowhere. Or rather we are just starting on incomplete disease registries, and hoping the eventually they’ll get built into the ever-coming but not quite here electronic medical record.
Now there is a very important reason that these efforts should continue, and Medicare can help by changing the way it pays for DSM but that’s a tricky process. In the meantime we have more independent confirmation in Health Affairs from Ken Thorpe that 15 big disease categories consumer most of the money we spend on health care, and many of them like diabetes, heart and lunch disease are in the wheelhouse of DSM’s successes to date.
But I hate to remind Al that while around the world soccer is just getting bigger and bigger as a sport and as a business, in the US the women’s pro league folded last year, and the men’s game is a sickly 7th or 8th in terms of TV time and fan importance despite a 1/4 final-round appearance in the 2002 world cup for the men, and sustained success for years for the women. So just because something should be a big deal, it doesn’t mean it is. But let’s hope it will be.
