Fwd: qotd: Reaping rewards for medical product innovation

_______________________________________________
Quote-of-the-day mailing list
Quote-of-the-day@mccanne.org
http://two.pairlist.net/mailman/listinfo/quote-of-the-day

-------- Original Message --------
Subject: qotd: Reaping rewards for medical product innovation
Date: Thu, 24 Apr 2014 10:38:54 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Fox Business
April 22, 2013
Gilead Profit Triples, Hepatitis C Drug Revenue Reaches $2.3B

Gilead Sciences Inc (GILD), which ignited a fierce debate over
prescription drug prices, said its new $1,000 hepatitis C pill generated
quarterly sales of $2.27 billion, helping the company's quarterly net
profit nearly triple.

http://www.foxbusiness.com/industries/2014/04/22/gilead-profit-triples-hepatitis-c-drug-revenue-reaches-23b/

****

ProPublica
April 23, 2014
MIA In The War On Cancer: Where Are The Low-Cost Treatments?
By Jake Bernstein

Increasingly, Big Pharma is betting on new blockbuster cancer drugs that
cost billions to develop and can be sold for thousands of dollars a
dose. In 2010, each of the top 10 cancer drugs topped more than $1
billion in sales, according to Campbell Alliance, a health-care
consulting firm. A decade earlier, only two of them did. Left behind are
low-cost alternatives, including generics, that have shown some merit
but don't have enough profit potential for drug companies to invest in
researching them.

The predominant focus of cancer drug development today is on "targeted
therapies" that are both innovative and lucrative. These drugs block the
growth and spread of cancer by interfering with specific molecules
involved in tumor growth. Fashioning these targeted therapies involves
costly molecular and genetic experimentation, but once patented the
investment can translate into enormous drug company profits.

http://www.propublica.org/article/where-are-the-low-cost-cancer-treatments

****

RAND Corporation
April 22, 2014
Healing Medical Product Innovation
By Steven Garber, Susan M. Gates, Emmett B. Keeler, Mary E. Vaiana,
Andrew W. Mulcahy, Christopher Lau, Arthur L. Kellermann

Previous studies aimed at reining in spending on technology have focused
on changing how existing medical technologies are used. But what about
also encouraging the creation of technologies that could improve health
and reduce spending, or that provide large-enough health benefits to
warrant any extra spending? A recent RAND study focused on policies that
could help change which medical products—drugs, devices, and health
information technologies—get invented in the first place.

To spur inventors to create medical products that lower health care
spending and promote health, policymakers need to address the perverse
financial incentives that lead inventors and investors in the opposite
direction. Currently, large profits are most often available from
creating increasingly expensive products that boost spending, whether or
not they also substantially improve health. In contrast, inventors face
relatively weak incentives to create products that would help decrease
spending.

The RAND research team developed ten high-priority policy options that
could change the costs, rewards, and risks that inventors and investors
face. We synthesized information from scientific, trade, and popular
literature; conducted interviews with more than 50 national experts from
a variety of fields; sought input from a panel of accomplished technical
advisors; and developed illustrative case studies of eight medical products.

Ten Policy Options for Healing Medical Product Innovation

1. Enable More Creativity in Funding Basic Science

2. Offer Prizes for Inventions

3. Buy Out Patents

4. Establish a Public-Interest Investment Fund

5. Expedite FDA Reviews and Approvals for Technologies That Decrease
Spending

6. Reform Medicare Payment Policies

7. Reform Medicare Coverage Policies

8. Coordinate FDA and CMS Processes

9. Increase Demand for Technologies That Decrease Spending

10. Produce More and More Timely Technology Assessments

Because the stakes in reining in health care spending are so high, and
the need to get more health benefits from the money we spend is so
great, we believe all of these options should be considered—the sooner
the better.

RAND Research Brief
http://www.rand.org/pubs/research_briefs/RB9767.html

****


Comment by Don McCanne

New technology and drug development is being driven by profits in the
private sector - massive profits. Even those of us fortunate enough to
not have to use the new technology are still paying for it through taxes
to support government health programs and through higher premiums for
private insurance plans.

As the nation with the highest health care spending it has become an
imperative that we do something about this. The drive to obtain lower
prices in health care will not come from the private sector since its
first priority is massive profits. Change will have to come from our
government.

RAND has published a Research Brief listing ten policy options for
"healing medical product innovation." The list includes some reasonable
concepts and some ideas that perhaps are not so hot. What is important
is that policy wonks are thinking about the problem and pushing us to do
something about it. Especially important is the concept that innovation
should be targeted to reducing costs when possible, not to deliberately
designing products to be more expensive.

RAND's suggestions do include a major role for the private sector, but
give them too much control, in my opinion. More control should lie with
government entities such as the NIH. The private sector wants better
products at higher prices whereas the government should incentivize
better products at lower prices. As long as the private sector would be
willing to provide us with greater value, they should receive legitimate
costs plus fair margins.

The benefits of medical product innovation should accrue primarily to
the people, both as improvements in health technology, and as reductions
in costs. It is the consumers who ultimately pay for the development
costs who should be reaping most of the benefits - not Wall Street,
Madison Avenue, passive investors, nor the superabundance of
administrators that permeate our health care system.

The point is that we can do something about this misdirection of our
funds. We need to place a priority on the ethics of health care spending
- the same type of priority that would also lead to a single payer
financing system - thereby creating much greater value in health care
for all of us.