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medpundit |
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Sunday, July 28, 2002Jane Galt says that drug companies have a limited market, and are therefore hit harder by price decreases. But they use this limited market to their advantage, too. A person with high blood pressure, for example, doesn’t have much of a choice in what drugs are going to work to keep his blood pressure down. Ditto a diabetic and his blood sugar. And a person in the throws of a heart attack isn’t in a position to shop around for the most cost-effective thrombolytic therapy. The hypertensive, the diabetic, the heart attack patient all rely on their physician to give them the right drug. The physician, in his turn, doesn’t always choose the most cost-effective drug, either. Given the choice between reducing mortality by 1% or saving money, the doctor is going to choose lowering mortality, even if it comes at a higher price. Part of this is due to the litiginous nature of our society. No one wants to be accused of skimping on medical care. Some of it is due to third party payers. As long as someone else foots the bill, the sky’s the limit. The drug companies realize this. That’s why they raise their prices whenever the market for their drug increases. Take a look at the report of Families USA on the increase in drug prices from 2000 to 2001. For many of the drugs, their market increased because of the increase in the elderly population who uses them. In some cases, however, the market increases coincide with the publication of research or treatment guidelines that suggest an advantage in mortality or morbidity by using them. The price of metoprolol, a drug used for blood pressure and heart disease, rose 20% (almost eight times the rate of inflation) in that one year period. Why? Because the demand increased. In 1999, a study showed that metoprolol improved survival rates after heart attacks. I can attest that the number of patients taking metoprolol compared to other beta-blockers rose steeply in my community after the publication of that paper. I’m sure the same thing happened elsewhere. Let’s look at some of the other drugs whose prices increased dramatically in the same time period. Demadex, a water pill that is especially useful in people with chronic renal failure, increased by 17.8 percent (nearly seven times the rate of inflation). The latest numbers I could find for the incidence of chronic renal disease were from 1997, but the incidence, even then, had increased from 150 new cases per 1,000,000 population in 1988 to 287 new cases per 1 million population in 1997. My guess is that it has continued to increase since then and will continue to do so as the population ages. Expect the price of Demadex to keep going up, too. The cost of Premarin, the now much maligned estrogen, rose 17.5% (seven times the rate of inflation). This was before the recent hormone replacement study called its usefulness into question, and corresponds to a time when doctors believed estrogen protected against heart disease. As a result they recommended it unequivocally for postmenopausal women. It also happens to correspond to a time when baby boomers were beginning to enter menopause, pushing the market for estrogen up. Market went up, so did the price. The price of Plavix, a drug that inhibits blood clotting, rose 16.8 percent (more than six times the rate of inflation). The drug is favored by cardiologists to keep cornary artery stents open after placement. In addition, the American College of Cardiology together with the American Heart Association recommended it in 1999 as the drug of choice for heart attack patients who couldn’t take aspirin. Not coincidentally, Plavix sales rose 128 percent in the first quarter of 2000. Sales and price jumped up together. How many car companies could do the same and get away with it? None. People would stop buying the car if they kept increasing the price. But there is no alternative to Plavix in the guidelines, so drug companies do get away with it. Zestril prices rose 14.6 percent (more than five times the rate of inflation). Zestril belongs to a class of drugs called ACE inhibitors (angiotensin converting enzyme inhibitors.) ACE inhibitors are exceedingly popular and urged on physicians as a drug of choice in many situations: diabetics with high blood pressure, diabetics without high blood pressure, people who have heart disease, nondiabetics with high blood pressure, and people with congestive heart failure. In 1999, the American Heart Association and American College of Cardiology recommended their use in all heart attack patients whose blood pressure could tolerate it. Insurance companies keep track of physicians’ rates of use of ACE inhibitors in these conditions as a “quality assurance” measure. Zestril is especially popular because of its once a day dosing. It was the number one prescribed ACE inhibitor in 2000. As the population ages, more and more prescriptions for it are written. Larger market, higher prices. Lipitor, a cholesterol-lowering drug, rose 13.5 percent (more than five times the rate of inflation). In 1999, a study was published in the New England Journal of Medicine that showed treatment with Lipitor was as effective as angioplasty for low-risk people with stable coronary heart disease. By 2000, Lipitor had jumped from the number three to the number one most prescribed drug. More customers, higher prices. Physicians could do their part to fight this upward spiraling trend by considering the true cost of our recommendations. We should be more critical of guidelines instead of embracing them as if they were God’s own word. Organizations like the American Heart Association, the US Preventive Task Force Services, and professional societies should consider the economic consequences as well as the public health consequences when coming up with them. As for pharmaceutical companies, I don’t hold much hope that their executives will ever have the moral compass to refrain from charging as much as they can get away with. Their covenant is with the stockholders, not the patients who rely on their drugs. While I don’t believe that complete socialization of the pharmaceutical industry is desirable, I do believe that some sort of measure is needed to reign in their greed. In a way, we are seeing an attempt at that within our system now, in the drug reimportation bill, and in the generic drug bill. They need to change their fundamental ethos, and if it takes a shake up via legislation or grass roots revolt, so be it. posted by Sydney on 7/28/2002 06:26:00 AM 0 comments 0 Comments: |
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