Wednesday, April 13, 2011

The unruly "Health" industry: some examples.

The strange medical economy we have going in the US is highlighted in one case by the story of the drug Makena, which is used to help prevent premature births. Women particularly at risk of giving birth prematurely rely on this drug.

The original drug in question, hydroxyprogesterone caproate, was made for years as Delalutin by Squibb (which became Bristol-Myers Squibb).

However, in 1999, Delalutin was discontinued by Squibb (which had been making and marketing the drug since 1959.) It was OK because "compounding pharmacies" ... which is pharmacies that can make their own compound drugs, filled the gap and sold the drug for a fairly low cost ... something like $10 to $20 per dose.

Then, a company called KV Pharmaceuticals decided it was going to market the drug by getting it FDA approved. Once they did that they'd have the sole rights to make this drug in the USA, due to patent law, as I understand it.

... Then they increased the price from about $15 a dose to $1,500 per dose. That's about $30,000 for the entire regiment that women need if they're at risk of premature birth.

Fortunately, Senator Sherodd Brown, The March of Dimes, The American Academy of Pediatrics, the American College of Obstetricians and Gynecologists, and the Society for Maternal-Fetal all protested and the FDA agreed not to restrict compounding pharmacies from making and selling the drug.

Except for these people raising their voices, the cost increase would have just happened. It was clearly the intent behind KV Pharmaceutical to charge $30,000 for a drug regimen to prevent early birth which had previously cost hundreds. (They've since cut the price in half to a mere $15,000).

Read some more details about the story here.

Health journalist Julie Applebee wrote a piece which simliarly serves as an example of the ecosystem of the health care industry, here recounted by Dr. Gregg Bloche on NPR's Fresh Air. I'll let him tell it:

Back in 2007, a so-called 64-slice CT scanner came into use, really high-resolution. Cardiologists loved it. They started buying it for their offices, and...
DAVIES: What does that mean, 64-slice?
Dr. BLOCHE: It means 64 different levels of images very close together. A CT scanner works by taking a cross section of the part of the body that it's scanning.
DAVIES: So you get a three-dimensional picture, in other words, right?
Dr. BLOCHE: Exactly. It's a three-dimensional picture that's made up from a whole bunch of slices. Imagine looking at cross sections, at multiple levels of something. You can do a cross section of the brain at multiple levels. And the closer the cross sections are to each other, the finer the resolution on the CT scan.
So 64-slice is just a fancy way of saying a really high-resolution CT scanner, so high-end resolution that you could put people in it and look at their hearts and figure out how much coronary artery blockage they had without putting a catheter inside their arteries to pump dye into their arteries, which was a rather scary way of assessing levels of coronary artery blockage.
So the cardiologists loved this. They could buy this machine and charge a huge amount for it and show beautiful pictures, stunning pictures, colorful pictures, of people's coronary arteries and the degree of blockage.
Only thing is that this test, it turn out, only turned useful for a very small number of patients who had serious coronary vascular disease. Medicare agreed to pay for it only for this small number of patients.
But the cardiologists exercised their right to petition their government. They lobbied Congress. Seventy-nine congressman from both parties wrote a letter to the agency that runs Medicare, saying: Cover this thing. Medicare soon rescinded its limiting rule and agreed to cover the test much more broadly.
So politics plays a big role in the movement of expensive technologies that yield only tiny benefits right into the marketplace. And then the developers of these technologies know that. And so they keep spending. The investment bankers know it. The venture capitalists know it.

You can read the whole interview here.

Stories like this are very important to the national health care debate and the government finance debate. The Health Reform Act passed recently doesn't seem to address any of these concerns. I'd love to see evidence that it does, but if there is, I've missed it. Nor does it touch on the ecosystem of R&D, which I haven't got time to go into now, which seems to have an equally sordid past of cannibalizing publicly funded research.

Until the ecosystem of health care is fixed and until we go back to funding research done at universities around the country, it seems like we're headed for a downward spiral of increasing costs and no one is talking about it on the national stage (probably for some of the reasons Dr. Bloche pointed out.)