The Perils of Low Cost Medicine

Today’s Managing Health Care Costs Indicator is  128,000

I’ve often posted about “accretive innovation,” new medical technologies that cost a lot, and offer only a small portion of patients what is often only a tiny benefit.  I've talked less about the consequences of when prices are too low - which means we'll not obtain the potential societal benefits of a new drug. 

First, an example of accretive innovation.

In 2001, Xigris (human activated protein C, Lilly) was approved for use in severe sepsis based on a small study.   The drug was heavily marketed by Lilly – including hiring a PR firm and secretly funding an ethics task force which came up with guidelines that promoted Xigris use.  Subsequent studies showed that the drug was associated with a higher risk of brain bleeding and did not improve survival rates. The drug was withdrawn from the market last fall.  The result of all of this marketing is that a wildly expensive drug ($8000 per dose) gained high market acceptance; sales were $200 million per year. 

I’m reminded of the Xigris story by the New York Times last week, which reported that tranxemic acid, a dirt-cheap generic medication, could save up to 128,000 lives a year, 4000 of them in the US.

From the Times report:

For months, a simple generic drug has been saving lives on America’s battlefields by slowing the bleeding of even gravely wounded soldiers.

Even better, it is cheap. But its very inexpensiveness has slowed its entry into American emergency rooms, where it might save the lives of bleeding victims of car crashes, shootings and stabbings — up to 4,000 Americans a year, according to a recent study.

Because there is so little profit in it, the companies that make it do not champion it.   

This isn’t the first time we’re seeing the ugly side to drugs costing too little.  We have serious shortages of generic oncology medications and generic attention deficit disorder medications right now.  We need effective drug company marketing to bring pharmaceutical innovations to physicians – but disseminating knowledge about drugs is difficult if there is no one with a profit motive to do so.    

I was aghast at the FDA approval of brand name colchicine,  a drug that cost pennies, was well-accepted for gout and other indications, and which skyrocketed in price to over $5.    I felt rage when the Wall Street Journal reported that a pharmaceutical would charge $1500 for a previously-generic $20 progesterone injection to prevent premature deliveries.  But perhaps my anger is at least partially misdirected. 

It’s obvious that we can’t afford ridiculously high prices for drugs.  It's a bit less obvious but no less true that we need high enough prices for effective drugs that their makers will manufacture them and market them for appropriate use.

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Supreme Court Overturns VT Ban on Selling Physician Drug Data

Just a brief note.  The Supreme Court agreed with my post from a few months ago and will allow pharmaceutical companies to purchase data on physician drug prescribing practice. The vote was 6-3; Sonia Sotomayor joined Anthony Kennedy and the four pro-business conservatives.

I think having more of this data collected in a standard way will be good - and eventually will help us improve prescription practices.  I'd like to see this data available in patient-friendly ways.

In an era of high patient cost-sharing, patients will start wanting to know if their doctor is making cost-effective prescription choices.

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Let the Pharmas Data Mine Prescription Records

Today’s Managing Health Care Costs Indicator is 3.99 billion

Vermont, New Hampshire and Maine have passed legislation prohibiting pharmaceutical companies from using data from aggregators that track physician prescribing practice for marketing purposes.  The Supreme Court heard arguments yesterday about whether these laws should be struck down as restrictions of free speech.

Physicians wrote 3.99 billion prescriptions in 2010 , a rich database that can be used to increase the value of the health care system, or to market increased use of high margin medications.

I don’t have a lot to say about the constitutional issues posed by this legislation, but I’ve been thinking about the practical implications.  When I was in full-time clinical practice, I was always surprised that the drug representatives who visited our practice knew which drugs I used and which I didn’t.  Frankly, I didn’t much like it.  However, I certainly learned that my prescription practices were being watched.

The pharmaceutical companies use this data to focus on which physicians are more likely to be persuaded to prescribe the drugs that they were targeting –which were often high-priced high-margin brand name medications.  The legislators in northern New England saw a powerful public policy reason to restrict use of this data. They saw physicians prescribing unnecessarily expensive medicines, impoverishing patients, raising the cost of health insurance, and increasing the cost of state Medicaid programs.  Further, they also explicitly allowed use of this data for purposes felt to be socially beneficial, such as research or quality reporting.

The pharmas, the data aggregators, and the American Medical Association have lined up in opposition to these state efforts to restrict data mining.  The AMA is concerned that physicians might be inappropriately profiled, and also incidentally  makes more money from licensing physician lists than it does from member dues each year. 

 

I hope that the Supreme Court does not uphold the states’ rights to restrict the use of this data . I think there is a good public policy reason to let the pharmas use this data – even while knowing that their intent is to increase profits, which will drive up the cost of health care.  

I fear that if the pharmas are not allowed to use this data in a way that  they find commercially viable, it’s highly likely this data will not end up being developed.  It’s fine in theory to restrict the use of this data to “socially valuable” purposes like research, physician quality profiles, and counter-detailing.   But there are large costs involved in sorting through this data, and lack of an “anchor customer” to underwrite the cost makes it more likely that this data will never see the light of day.

Transparency can help decrease variation, and can be used to develop profiles in which physicians are most cost-effective.  I imagine a future where patients will be able to have robust information about the practice patterns and quality of their physicians. Open databases are more likely to lead to accountability and systematic improvement than databases subject to large restrictions on their use.  I support the open availability of this data, even when it will be sometimes be used in ways that don’t make me happy.

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