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PHARMA/POLICY: Price negotiations coming?

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Joe Paduda is puzzled that drug company prices and profits are going up, yet the NY Times thinks that we can’t get a better deal on drug prices for Medicare. But in some ways that’s a little irrelevant, as the introduction of price negotiations are a political not an economic question. And despite the fact that in 2003 negotiations were politically unacceptable to Tom Delay et al, it appears that (as quoted in Krugman’s column today), the politics of negotiation are all one way.

This is clear from the latest Newsweek poll, which shows overwhelming public support for the agenda Nancy Pelosi has laid out for her first 100 hours if she becomes House speaker. The strongest support is for her plan to have Medicare negotiate with drug companies for lower prices, which is supported by 74 percent of Americans — and by 70 percent of Republicans!

Even assuming that the Dems don’t fumble their current advantage away (or more accurately that the Republicans don’t keep shooting themselves in the foot and the knees) and they take the House and Senate, we’re not getting negotiations tomorrow. First, it might not get past the Senate filibuster, although those poll numbers are pretty scary for Republicans and will take a boatload of PhRMA cash to overcome. Second, Bush will likely veto it, as the current MMA is basically what passes for his domestic legacy (unless he wants “I cut taxes for the richest people in the world and made the children of the middle class pay for it” on his tombstone).

But in any event Pharma needs to prepare for a world in which Medicare drug price “negotiations” are much more likely than they’ve expected heretofore.

TECH: Avatars, and the Metaverse

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I have been struggling with the new attention on online virtual worlds like Second Life, World of Warcraft, etc, etc. I think that there’s something here that’s more than games. But I can’t quite tell what yet. And if it’s just games, well I don’t want to get sucked into this, as I waste enough time on the Internet already.

Here’s an article by a tech veteran suggesting that this is The Next Big Thing. The question is, what moves to virtual worlds? If it’s just games, then it’s self limiting as only some people have that much time on their hands and they’re not the ones with the money. There are obviously options for moving community online to virtual worlds, but community per se doesn’t have that much economic value. However in some aspects of health care, like patient groups, there is real value from community.

The web though is most important for moving commerce and information online. It’s not clear to me how you put that into a virtual world, other than advertising to those who are playing games or otherwise spending time there which is the TV/newspaper model. Any ideas?

(Note: Slight edits made to clarify)

TECH: Stents, apparently overused to be replaced by better ones

Here’s the article from the NY Times confirming that drug-eluting stents are being used less since the recent findings of increased risk over bare-metal stents.

But now stent sales are falling and some doctors are rethinking their faith in the devices, driven by emerging evidence that the newest and most common type — drug-coated stents — can sometimes cause potentially fatal blood clots months or even years after they are implanted.

SNIP

There is no question that stents have saved countless lives in the short term by preventing impending heart attacks or opening arteries while an attack is being treated. But neither type of stent, no matter how much better it may make a patient feel, has been shown in rigorous clinical trials to improve long-term survival compared with other forms of treatment.

SNIP

Drug-coated stents cost an average of about $2,200 each in the United States, nearly three times the price of bare-metal ones. Despite the higher price, they quickly captured more than 85 percent of the United States market after their introduction in this country two years ago. Overseas, where national health insurers have been more reluctant to pay the higher prices, drug-coated stents have caught on more slowly.

SNIP

But other doctors’ uncertainty is starting to show in the declining sales of stents. Just this week, Boston Scientific said that its third-quarter stent sales, $572 million, were 4.8 percent lower than a year earlier.  Johnson & Johnson, whose Cypher is the only other drug-coated stent currently sold in this country, said this week that its worldwide stent sales of $627 million in the quarter included a 6 percent decline from a year earlier in the United States. Its sales in Europe were down 3 percent.

And showing what’s going to replace these drug-eluting stents—more CABGs? more drugs? diet and exercise? Dean Ornish’s program (still waiting for Medicare reimbursement 15 years after it’s been more or less proven to work? Unlikely.

Several competitors are still anxious to enter the domestic market, including medical giants like Medtronic and Abbott Laboratories and smaller players like Conor Medsystems whose products are already on the market overseas. Some have claimed that results to date suggest their products have little or none of the clotting risks. Because none of them plan to apply for F.D.A. approval before next year, it is unclear whether or how the agency’s new scrutiny of stent safety will affect their prospects. New stents will not address the issue of whether too many patients get stents instead of first trying therapy with drugs, including statins, that might improve their condition.

HEALTH PLANS/HOSPITALS: Maverick pulls hosptials out of HMOs

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This medical maverick,  (or that’s what the paper’s calling him) owns three hospitals in The OC (California) and has cancelled all his HMO contacts—going after Medicare patients and charging HMOs and PPOs full fare for those admitted via the ER (and being very difficult about transferring them out).

My two questions are:

1) What happens when the HMOs won’t pay the full charge for ER and post ER care—if they feel they have to, that has very interesting anti-trust implications. Why shouldn’t all hospitals cancel their HMO contracts and just charge the Medicare rate? (at least in areas like Orange County where Medicare pays more than the HMOs do)

2) He owned a medical group that got bought by Phycor which then went bust, so that his stock was worthless. So where did the money come from to buy his helicopter and the hospitals?

QUALITY/POLICY: The Scourge of Skid Row

This is very, very unpleasant. A staph infection outbreak in Los Angeles that’s got its own name— the Scourge of Skid Row. And it’s one reason why public health, including the real basics like housing, clean water and access to medical care affects everyone—not just those without it.

 

POLICY: Six Dirty Little Health Care Secrets

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I’m up at Spot-on talking about Six Dirty Little Health Care Secrets. Comments back here if you like….


With no lurid sex scandal this week and apparently little public interest or Congressional caring about what’s going on overseas, ABC News and USA Today have turned to the health care system to fill some air time and column inches. As you may have heard, ABC’s even been wise enough to ask a couple of bloggers – yes, I’m one of them – to chime in on the debate.


They were asking for solutions to the health care crisis. But asking
for that’s pretty much a waste of time. Americans may hate their health
care system, but they apparently like their health care providers and
even think that their costs are OK. Or at least that’s what one survey
said. But suveys don’t tell the whole story – they serve as a kind of
cover for the real reasons it’s so hard to change the system we live
under. Continue …

PBMs: Cynics patrol

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Late last month Jack Bruner joined PBM Caremark Rx as VP of Marketing. What was he doing before? He was head of Hewitt’s Global Health Care Practice. Who’s Hewitt? It’s one of the biggest benefit consultants in the world. What did it do last year? It tried to put together a coalition of  coalition of employers (HR Policy Association) to go around the PBMs. It basically appears to be failing.

How hard did it try, and on whose side is it (and the other benefits consultants) really on? I’ll let you Wall Street Journal readers decide if you’re suspicious of a revolving door between the consultants and the PBMs.

POLICY/POLITICS: New York Times, dogs, pustilent sores, licking of.

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After the previous three times, I don’t think I can bear it.  This time David Leonhart has written a NYT article saying that the reason we spend more here is because of American culture. This may be the most moronic sentence of the whole series of articles:

We Americans tend to treat any rejection of a health claim as some conspiracy by insurance companies, the government, doctors and the pharmaceutical industry. In other countries, people have arrived at a better understanding that health care necessarily involves economic triage — that $10,000 spent on quixotic care is $10,000 that can’t be spent more usefully.

“We Americans” are somehow are magically controlling the spending, apparently over the objections of  “insurance companies, the government, doctors and the pharmaceutical industry”

He’s supposed to be the economist. Does he have no idea who controls health policy and health care spending in this country?  For chrissake, the government here more or less represents the “insurance companies, the government, doctors and the pharmaceutical industry” and their interest is in spending more, not less. “We Americans” did not get a seat at that table, unless you count patient groups that also have an interest in higher spending and are co-opted by industry. Any high school senior doing a basic political science class  who read the cliff notes on Stigler’s theory of capture can tell you how that works. But apparently you get to miss that class, or Econ 101 if you want to write on health care for the NY Times.

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