To Modern Medicine

[billroper]

I have type two diabetes. I take a couple of pills a day for it, along with a couple of shots of Byetta -- which I understand will soon be available as a weekly injection -- and my blood sugar is in a happy, healthy place. Losing weight would be a good thing (as well as a hard thing to do), but modern medicine is keeping me relatively healthy. I'm fortunate to have a good job and a good health plan that subsidizes the cost of these drugs, of course, but I'm immensely thankful that the pharmaceutical industry has developed them and I don't begrudge the fact that they're making money on them. I also know how much it costs to bring a new drug to market, and it isn't cheap.

I want us to keep developing newer and better medical treatments. So does Dean Kamen, who is a very smart man. :)

(If you haven't heard of him for anything else, well, he's the guy who invented the Segway. And a bunch of other things that are arguably much more useful.)

Comments

[judifilksign.livejournal.com]

Interesting article. I think that he's right that we need to keep funding research, so that we can continue to have life improving and life saving treatments. As time goes by, new advances do become more affordable. Like you, I don't begrudge making money off of innovation; people ought to be paid for their time and efforts.

I also think we need to make insurance companies more accountable to *people* than to hedge fund investors and making huge profits. One of the biggest problems with medical insurance is that the medical insurance purchaser (employers) is different from the medical insurance consumers (patients). This means that medical insurance plans are tailored to get companies to purchase the plan, but not neccesarily to provide good service to patients. But that's a separate issue.

As a fellow diabetic on Metformin and Byetta, I am very interested in the weekly injection option of my Gila Monster spit. And if it weren't for my job's insurance benefits, I could not afford the treatment.

[madfilkentist]

As you may have seen in my journal, the events which have created a vast gulf between purchaser and consumer in health are a serious concern I've written about. Laws tend to be written to favor the strongest lobbyists, such as the more entrenched members of an industry to the detriment of newcomers; Congress and legislature make lots of noise about serving the public and promoting free enterprise when in fact they're doing neither. Barriers to entry, such as complex regulations which serve little purpose except making competition more expensive, are a common example. Witches in Salem, Mass., have even lobbied to keep "fake psychics" out!

There was an occasion a few years ago when my insurance was dragging on approving my blood pressure medicine, so I offered to buy the initial batch with my own money, and they wouldn't even do that without the insurance company's approval till I yelled at them, which probably neutralized any good effect the medication had on my blood pressure.

[poltr1]

FWIW, Byetta is a product of $PREVIOUS_CLIENT. And yes, it costs hundreds of millions, if not billions, to bring a new drug from conception to clinical trials to market.

I stoppped taking Metformin (generic Glucophage) when I found out it was giving me the runs.

[smallship1.livejournal.com]

The Countess had that. Changing to the slow release form (Glucophage SR) made a big difference.

[(Anonymous)]

The only trouble with Kamen's argument is that he ignores the plain fact that the rest of the G8 countries - maybe the whole G20 - get overall health results as good as the USA's for two thirds to three quarters the cost. Everyone gets a decent minimum of health care in these countries, and no one goes bankrupt over medical bills. It's happening today.

Research and invention are part of the solution, sure, and the improvement in medicine even over the last generation is wonderful. Somehow, though, other countries get the same wonders a lot cheaper. The current healthcare debate is backward looking precisely to the extent the country doesn't look at what's happening outside its borders.

[billroper]

The other G8 countries are, to some extent, free riders who are paying less than their share of the development costs of new drugs and treatments which is how they get the wonders a lot cheaper. The U.S., by paying more, is subsidizing health care for the rest of the world.

I have no objection to subsidizing health care for third world countries, but I'm not sure that we should be doing so for first world countries.

[madfilkentist]

People are increasingly seeking private health insurance in Europe, which should be inexplicable if the tax-supported system is so superior. The long waits for treatment are notorious.

[rdmaughan.livejournal.com]

Sorry but our system is superior. it is not perfect and I am happy to pay extra for priority access to non urgent care. But I am unaware of anyone in the UK going bankrupt due to having to pay medical bills.

[billroper]

On the other hand, I note the British citizen on my friends list who (for reasons that I'm not entirely familiar with, because I haven't lived under the UK health system) is having difficulties because of needing 20 pounds / month to pay for asthma inhalers. And, no, I don't know all the details, but it would seem to indicate an imperfection in the system, since breathing is important. :)

[rdmaughan.livejournal.com]

An imperfection? Which would be why I said our system was not perfect. From what I know of the circumstances of the individual in question I would expect them to be entitled to free prescriptions. I obviously don't have access to their financial records so I cannot say for sure.

There are charges for various things in the UK but there are exceptions for financial and some health issues.Most people in the UK have to pay for eye exams, I don't because my father has glaucoma and this places me at higher risk of eye problems.

[rdmaughan.livejournal.com]

I would be interested in seeing that statement expanded, preferably with supporting evidence.

[billroper]

I only need one assumption to make the whole thing work:

If developing new pharmaceuticals is less profitable, then pharmaceutical companies will develop fewer new pharmaceuticals, because investors will be able to deploy their capital more profitably elsewhere. This seems like a reasonable assumption to me; certainly, it would tend to be supported by real-world economics. (Note that the choice of where to deploy capital is a combination of individual preferences about risk and return. In general, you'll find that higher risk tends to track with higher return.)

Now, if pharmaceutical companies were less profitable (had a lower return), that doesn't really affect their level of risk. Thus those companies wouldn't be able to raise capital unless they became less risky. And -- as I think most people would concede! -- the process of bringing new drugs to market is inherently risky. So if the profitability of the pharmaceutical companies is reduced, you'd expect to see less research into developing new drugs, because developing new drugs is not as good an investment relative to the risk involved.

Now, you ask, how does that relate to my original point about free-riders?

I'm told that the prices we pay for pharmaceuticals in the United States are scandalously high compared to those paid by consumers in other countries, where governments use their monopoly negotiating power (coupled, in some cases, with the threat of expropriation of patents) to get drugs for their citizens at lower prices than we pay here. And that's supported by reports of people in the U.S. getting cheaper drugs by importing them from Canada, which I refuse to think of as other than a first-world country. (And if I did, my Canadian friends would hit me. :) )

Absent some other factor, it looks to me like the pharmaceutical companies are making much more money in the U.S. market than they are elsewhere. Or put another way, we here in the U.S. are responsible for supplying the largest percentage of drug company profits on a per capita basis, while consumers elsewhere are less profitable.

And there's some level of profitability which is required to support pharmaceutical research into new drugs where -- presumably! -- we're already at equilibrium relative to the risk involved.

And consumers in the U.S. are paying more than our "fair share" relative to other first-world countries, as nearly as I can tell.

[rdmaughan.livejournal.com]

An interesting theory. Surely the best way for the US to fix this would be to introduce a national health care system which gives them similar bargaining power? This would level the negotiating playing field and if your theory is correct result in price drops in the US and price rises in Europe.

[billroper]

Actually, I would expect less innovation under such a regime, but that's because I expect that the prices in Europe wouldn't rise. I could be wrong about that...

[patoadam]

Yes, I'm all for newer and better medical treatments, but that doesn't mean I'm happy with our current health care system. My complaints about health care are:

1. Three quarters of the people who are not eligible for Medicare, Medicaid, or employer-sponsored health insurance lack health insurance. This happens for two reasons. Some healthy people choose not to buy it. And insurance companies deny applications from people who are likely to have high medical bills. (I am one of the fortunate few in this category with health insurance. I don't think I would be able to get a new health insurance policy today because my insurance plan is no longer accepting new applicants.)

2. We spend almost twice as much per capita on health care as some other industrialized countries, with similar health outcomes. I don't entirely understand why or what we can do about it. However,

3. I'm aware of some specific ways health care costs could be reduced:

A public insurance option would reduce costs. The government pays medical bills more efficiently than private insurers. 97% of the money Medicare spends pays medical bills. Only about 80% of the money spent on private individual policies goes toward paying medical bills. (Most of the rest is spent by insurers to figure out who needs medical insurance the most, so it can be denied to them.) In some states, one insurer controls as much as 70% of the market, so a public insurance option would also increase competition.

Doctors often recommend useless or harmful medical they profit from. In McAllen, Texas, Medicare spends $15,000 per patient per year. In Rochester, Minnesota, home of the Mayo Clinic, Medicare spends $6,700 per patient. The difference? In McAllen, most hospitals are owned by groups of physicians, who receive a share of the hospitals' profits. At the Mayo Clinic, doctors get fixed salaries, so that they do not profit from their patients' medical procedures.

The Medicare Modernization Act of 2003 denied Medicare the right to bargain for lower drug prices and locked in overpayments to private insurance companies.

[jrittenhouse.livejournal.com]

Due to my chronic leukocytic leukemia, I'm immensely more dependent on modern medicine that I used to be. I **hate** that, but there's not much I can directly do about it. IV immunoglobulin treatments that I take regularly (often once a month) would be $14k a shot IF I didn't have decent health insurance. And I've become dependent on various expensive antibiotics; the real quick killer with this disease is that it leaves you way open to infection. All those recent trips I've had were when I got some sort of major infection that just went nuts.

There are treatments that can be given to me for the CLL, but they're not cheap, and they have diminishing returns, and the docs need to hold those off until really needed. And they're working on new treatments all the time. A cure would be *wonderful*.

Even with the insurance, we easily spend way over $7k a year in medical costs. I don't *dare* change jobs; aside of the pension issues, I'd never get approved with a 'pre-existing condition' for health care coverage by another insurer, and I wouldn't want to think of what would happen then.

I'm watching this whole business about health care issues more carefully than the average bear, because I have to. It's vital to me.

[billroper]

I certainly understand why you watch the health care debate carefully. The one thing I don't understand is your concern about pre-existing conditions when switching jobs. I was under the impression that Congress passed a bill some years ago that says that you can't be denied coverage for a pre-existing condition at a new employer if you were covered for it by your old employer.

Does that not apply in your case or do I just misunderstand?

I do understand that the situation would be much different if you lost your job, of course.