Tag Archives: pharmaceuticals

Controlling the Costs of Innovation: Let’s Refocus and Remember The Patient

In a controversial study released this week, Tufts University’s Center for the Study of Drug Development estimates that the cost to bring a new drug to market exceeds nearly 2.6 billion dollars.  The study, which was 40% funded by industry has been criticized for over estimating these costs in favor of industry and misrepresenting some cost estimates.  While we will not know fully the extent of the methodology of the study until later in 2015 when it is published in a peer reviewed journal, these preliminary findings were released in advance and have already begun to spur debate.

However, irrespective of these criticisms, I believe that the study does have merit and brings an important issue forward—is the FDA stifling innovation with excessive fees and paperwork?  Are smaller, less well funded researchers/corporations unable to significantly contribute without partnering with big pharma? Who will ultimately bear the increased cost of drug development?

Innovation is what has always made healthcare in the US great–it is what separates us from the rest of the world.  For decades, the US has been able to attract talent from throughout the world and this has resulted in numerous “game changing” breakthroughs in medicine.  Through continued development of new drugs, new technologies and new ways to better treat disease, we are able to improve outcomes and reduce death from preventable disease.  The US has always been a place where others from around the world have come to incubate and grow ideas.  Now, it appears that innovation must come at a substantial cost–the increasing capital required for drug development as well as taxes on medical device companies only serve to squeeze out the “small guys with big ideas” and limit our ability to continue to produce new, more effective therapies and cures.  In addition, these additional costs to the pharmaceutical industry are not simply added to their bottom line–they are pushed on to the healthcare consumer as well as Federally funded healthcare plans.  Ultimately, the taxpayer bears the brunt of the increased cost.

The process of drug development is long and arduous.  Government regulation, politics and greed have served to make it even more difficult.  Physicians in academic medicine, scientists, pharmacologists and leaders in industry have learned to partner and share ideas in order to bring basic science principles from the bench to the bedside—ultimately translating ideas into cures.  Certainly, big pharma is in place to make profits and increase market share.  But as costs increase, many drug makers are putting less and less profit back into research and development.  Growth can become stagnant and new ideas may never reach the bench or bedside.  Federally funded research–such as NIH grants–face big cuts and budgets are often embroiled in political battles.  Legislators use research dollars as bargaining chips and fund projects that appeal only to a particular interest group or a group of favored donors.  We must find a better way to promote medical innovation and reward research.  We must find better ways to choose the most promising projects for funding.  We must be good stewards of the R & D dollar and make every single investment count.

As with most things in medicine, we must always pause and remember to focus on the patient.  Advocating for the patient suffering with disease is the reason most of us became involved in medicine in the first place.  Whether the study from Tufts over-estimates the cost of development or not, it should still serve as a wake up call to us all.  We must work to control the cost of developing new therapies—we must limit excessive taxation, we must promote entrepreneurship and begin to fix the current system of FDA approval for new therapies.  We must separate politics from medicine and streamline processes—eliminate paperwork and promote efficiency–if we are to continue to lead the world in medical innovation.  We must continue to make room for the “small guy with the big ideas”–If we do not–ultimately it will be our patients that suffer in the end.

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Healthcare Reform and The Cost of Prescription Drugs: Price Gouging or Providing Hope?

There are many factors that have contributed to the massive healthcare expenditures in the US today.  Costs of technology, costs of hospitalizations and hospital based services, physician fees, drug costs and costs of litigation (see tort reform and how Senator John Edwards made his fortunes) are all major factors that drive the cost of care higher.  To be effective, healthcare reform must address ALL of these aspects equally–regulation and cost containment must be applied to each of these entities in order to successfully lower cost while maintaining quality care.  One area that does not receive enough attention in healthcare reform discussions is that of drug costs.  In 2010, Americans spent nearly 262 billion dollars on prescription drugs.  Since the beginning of the new affordable care act (ACA) Americans have only saved a modest 3.7 billion in prescription drug costs.  I argue that this is not nearly enough.  Many new biologics and so called designer drug therapies are being produced at enormous expense.  Many of these therapies have not been shown to significantly impact disease survival.  However, they do often provide hope for patients left with few options.

Yesterday in the New York Times,  I read another wonderful article by cancer patient Dr Susan Gubar.  Once again, Dr Gubar inspires with her words.  In her blog, Dr Gubar discusses the expense and frustration associated with drug therapy.  Often  availability and production become an issue for desperate patients.  Costs prohibit access to new therapies for many.  As Dr Gubar points out, it is often the most vulnerable that are harmed by drug shortages and outrageous costs–kids with leukemia, and the elderly.  Our system of drug development and marketing has been entrusted to businessmen and women who are held more accountable by Wall Street investors than by the patients they serve.  This is not to say that pharmaceutical executives do not care about the patients that their drugs impact–however, they do care a great deal about PROFIT.  A good example of this was revealed in a pre reform New York TImes article from 2009.  In this article author Duff Wilson reports on the pharmaceutical industry’s practice of raising drug prices in advance of healthcare reform legislation.  The drug makers raised prices over 9% in a move to limit their profit reduction when potential federal mandates arrive that force them to lower prices.  In effect, the industry has attempted to  set up a higher price base prior to the inevitable reductions that will come with reform.  In essence they are hoping for a net zero change–certainly these types of strategies will limit any reform’s ability to contain costs.  This is just plain wrong and is reminiscent of the price gouging that is seen after natural disasters such as Hurricane Katrina.

Healthcare reform is here.  How it is implemented remains up for some debate.  To be successful we must address all factors that are driving up the cost of care.  Drug makers must be held accountable to the Americans who depend on their therapies.  Pharmaceutical cost  must be regulated and the cost of new biologics must be weighed against their effectiveness.  There is no debate that outcomes data has to be a part of this type of decision making process.  Patients depend on a constant and reliable supply of certain drugs.  We must hold drug makers accountable for shortages–we must shift the pharmaceutical executives focus from making expensive, new designer drugs to providing quality service and a reliable supply at a fair cost.  Do I have an answer for this?  Most assuredly I do not.  However, we must all come together–physicians, politicians, pharmaceutical and other industry executives as well as patients to find some common ground.  It is only thru cooperation and compromise that the real healthcare reform in the US will come to fruition.

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