IN AN IDEAL world, doctors would combine excellence of care with cost-effectiveness. Unfortunately, the U.S. health system is wildly expensive compared with those of other rich nations. In a second-best world, doctors would deliver treatment that prices some people out of the market but that's great for the majority. On the whole, the U.S. system meets that standard. But in a really not-at-all-good world, doctors would be driven neither by cost-effectiveness nor by medical ideals. Unfortunately, bits of the health system do behave that way, because financial incentives push in a perverse direction.
Consider a loophole that may open soon with the expiration of a ban on Medicare and Medicaid payments to new specialty hospitals. There's nothing wrong in principle with small clinics that focus on one or two procedures; it's possible that specialization boosts quality and efficiency. But there is a lot wrong about the fact that specialty hospitals are often owned by the doctors who refer patients to them. The conflict of interest is obvious: If a patient accepts the doctor's advice to undergo back surgery, for example, the doctor may profit as the surgeon who performs the procedure, as an executive of the hospital at which it is performed and as a shareholder entitled to a chunk of the hospital's profits. These incentives are likely to cause doctors to recommend surgery more than they would otherwise -- in particular, to patients who might have recovered, at less cost and with less medical risk, with a few weeks of physical therapy.
Federal law bars hospitals from rewarding doctors who refer Medicare and Medicaid patients to them, recognizing the danger of a conflict of interest. But at the time the law was written, doctor-owned specialty hospitals had barely emerged, so they're not covered by the legislation. Today about 100 specialty hospitals have been established across the country, concentrated in states that have loose rules on opening hospitals. Maryland, Virginia and the District have been spared this epidemic because of tougher regulations. The specialty hospitals have proved wildly profitable for the physicians who own them, so many more are likely to spring up unless regulators block them.
The consequences go beyond unnecessary operations. Because doctors refer only the simpler -- and therefore more profitable -- cases to their own hospitals, they leave full-service community hospitals with cases that often cost more to treat than the reimbursement offered by Medicare. This can threaten the viability of hospitals on which sicker and poorer patients depend. Traditional hospitals serve a higher proportion of Medicaid patients and racial minorities than the profitable specialty upstarts. The specialist hospitals have no emergency rooms, thereby eliminating the opening through which uninsured patients gain access to hospital services.
Two years ago Congress imposed a moratorium on Medicare payments to new specialty hospitals because of these concerns. That ban ran out in June, though the administration has announced measures that extend it until January. The government's Medicare Payment Advisory Commission has recommended yet a further extension until January 2007, but a permanent solution is needed. Sens. Charles E. Grassley (Iowa) and Max Baucus (Mont.), the top Republican and Democrat on the Senate Finance Committee, have proposed a measure that would ban doctors from referring Medicare and Medicaid patients to most specialized hospitals in which they have a financial stake. This common-sensical idea should become law quickly.
washingtonpost.com
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Monday, August 8
A Medical Conflict
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 06:05 PM EDT
Canadian panel says Vioxx safe enough
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 08:54 AM EDT
A Canadian expert advisory panel recommended that Merck & Co. Inc.'s arthritis drug Vioxx be allowed back on the market despite the possibility of cardiovascular risks.
Link to Article MSNBC.com
At Midpoint of Vioxx Trial, Merck Looks Battered
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 08:52 AM EDT
By ALEX BERENSON
Ernst v. Merck, the first Vioxx-related lawsuit to come to trial, is not over yet, but Merck appears to be in a deep hole. Link to Article NYTimes.com
F.D.A. Will Not Release Some Data on Heart Devices
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 08:51 AM EDT
By BARRY MEIER
The Food and Drug Administration said yesterday that it would not release information that it receives annually from the makers of heart devices detailing how often and why products fail. The agency called such data a corporate trade secret. Link to Article NYTimes.com
F.D.A. Responds to Criticism With New Caution
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 08:50 AM EDT
By GARDINER HARRIS
Stung by a series of drug safety scandals, the F.D.A. has issued a blizzard of safety warnings and slowed its approval of drugs. Link to Article NYTimes.com
Research on Female Twins Finds Adult Occupational Class Influences Adult Health, Above and Beyond Early Life Conditions
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 08:48 AM EDT
Healthorbit.ca
Singapore: a biotech hot spot in the making?
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 08:47 AM EDT
Anonymous. Chemical Market Reporter New York:Jul 25-Jul 31, 2005. Vol. 268, Iss. 3, p. 22 (1 pp.)
Less than two years after opening the doors on Biopolis, a purpose-built biomedical R&D hub, Singapore is launching the second phase of construction at the site. The move underscores Singapore's commitment to broadening its role in the life sciences to become a leader in both manufacturing and research. Plans for the first phase of Biopolis were unveiled in April 2001. The goal, says Yeoh Keat Chuan, deputy director of the biomedial sciences group of the Singapore Economic Development Board, was to provide a physical platform for the biomedical industry that would enable life sciences companies to leverage shared resources. Since the site was officially opened in October 2003, Biopolis has attracted 20 R&D companies, with over 90 percent of the 2 million square feet of space now occupied. The early success of Biopolis has led Singapore to push up the second phase of the project-adding two new buildings, or 400,000 square feet of R&D space. Construction on Phase II began early this year, and the new space is expected to be completed by late 2006. In tandem with the expansion of the Biopolis, Singapore has set ambitious goals for its manufacturing sector Biomedical manufacturing accounted for S$6 billion ($3.5 billion) in 2000. The country has already exceeded the target set in 2001 to double output by 2005, with biomedical manufacturing output reaching S$15.8 billion in 2004. As such, a new goal has been set: to achieve S$25 billion in manufacturing output and employment levels in the sector of 15,000 by 2015. To reach those lofty targets, Singapore is touting its competitive tax environment, intellectual property recognition and the infrastructure, which includes a highly skilled workforce, land for growth, and a stable utility infrastructure.
FDA advances HIV/AIDS generics
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 08:47 AM EDT
Feliza Mirasol. Chemical Market Reporter New York:Jul 25-Jul 31, 2005. Vol. 268, Iss. 3, p. 23 (1 pp.)
A WAVE of first-time generic HIV/AIDS drugs are expected to hit the worldwide market following tentative approvals granted by the Food and Drug Administration (FDA) in recent months in its bid to speed HIV/AIDS treatments to market. Motivated by the Presidents Emergency Plan for AIDS Relief (PEPFAR), first announced in 2003, the agency has been moving quickly to make generic formulations available to HIV patient populations. Indian drug companies are taking much of the spotlight. Aurobindo Pharma Ltd. in Hyderabad received five of the PDA's tentative drug approvals during June and July. The company will market lamivudine (GlaxoSmithKline's Epivir), nevirapine (Boehringer Ingelheim's Viramune), efavirenz (Bristol-Myers Squibb's Sustiva), stavudine (Bristol-Myers Squibb's Zerit), and a fixed-dose combination product of lamivudine and zidovudine (GlaxoSmithKline's Retrovir). Ranbaxy Laboratories Ltd., India's largest pharmaceutical company, received tentative approvals for zidovudine and nevirapine. Ranbaxy s zidovudine, approved in a 300 mg tablet formulation, is the first PDA-approved generic version of GlaxoSmithKline's Retrovir. "We are pleased with the speed with which US FDA has moved in approving our products, and will continue to work with them for the approval of our remaining ARVs in support of PEPFAR. Simultaneously, we are extending full cooperation to WHO [World Health Organization], so that they can also approve the same products under their prequalification program," says Brian Tempest, Ranbaxy s CEO and managing director. South Africa-based Aspen Pharmacare is the first non-US generic drug company to have received a tentative approval for a generic HIV therapy. The FDA gave the green light earlier this year for the company's copackaged antiretroviral regimen, comprised of the fixed-dose lamivudine/ zidovudine combination pill and the nevirapine tablet. Although existing patents and exclusivity issues presently keep these generics off the US market, the PDA's tentative approval bodes well. Under tentative approval, these products are now available for purchasing consideration by PEPFAR. PEPFAR is currently providing $15 billion over five years to fight the HIV/ AIDS pandemic, with a special focus on 15 of the hardest hit countries, says the FDA. Enlarge 200% Enlarge 400% [Photograph] India's Aurobindo Pharma will market GSK's Epivir PEPFAR was designed to target three specific areas related to HIV/AIDS: prevention of viral transmission, treatment of AIDS-associated conditions, and care of infected individuals, orphans and vulnerable children. The plan is expected to prevent 7 million new HIV infections, treat at least 2 million HIV-infected people and care for 10 million HIV-affected individuals, according to the FDA. Amid the flurry of generic approvals last month, the FDA also approved a new drug, Aptivus (tipranavir), a protease inhibitor developed by Boehringer Ingelheim. Aptivus, granted marketing authorization under accelerated review, is indicated for use with ritonavir for HIV-1 infected adults. The FDA based the approval on 24-week data from ongoing studies. The HIV market remains one of the most favorable areas for clinical development and regulatory approval, notes Waltham, Mass.-based Decision Resources Inc., which has published a new HIV-market analysis. Growth can be expected for both new treatments and traditional therapies, given the dynamics of the disease. "Growing resistance to current ARV products will drive the uptake of new products within the conventional ARV classes as well as emerging classes," says John Lebbos, therapeutic area director at Decision Resources. "As the prevalence of HIV increases over the next 15 years, the drug-treated population is set to expand, further driving growth." Decision Resources projects the total market for HIV therapies to grow from $6.8 billion in 2004 to $10.8 billion in 2019. New classes of drugs currently under development are expected to gain in market share, including CCR5 antagonists, CXCR4 antagonists, and integrase inhibitors. CCR5 antagonists and integrase inhibitors are the most promising classes. Both have the potential to be used across a broad segment of the HIV population, with initial use in the highly treatment-experienced sector, later moving into treatment of patients in earlier stages of the disease. "Some of the key unmet needs in HIV treatment include classes with novel mechanisms of action, products with longer durability or viral response, agents with lower incidence of long-term toxicity, advanced generation products with retained activity against drug-resistant strains, and agents with higher resistance barriers," Lebbos says.
CDERWEEK 8/1 - 5/2005
by
Alex Hsieh on behalf of Professor Henry Wang
on Mon 08 Aug 2005 08:45 AM EDT
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