Latest Drugwonks' Blog
Here's how it begins:
"AMERICANS HAVE, at best, a love-hate relationship with the life-sciences industry—the term for the sector of the economy that produces pharmaceuticals, biologics (like vaccines), and medical devices. These days, the mere mention of a pharmaceutical manufacturer seems to elicit gut-level hostility. Journalists, operating from a bias against industry that goes as far back as the work of Upton Sinclair in the early years of the 20th century, treat companies from AstraZeneca to Wyeth as rapacious factories billowing forth nothing but profit. At the same time, Americans are adamant about the need for access to the newest cures and therapies and expect new cures and therapies to emerge for their every ailment—all of which result from work done primarily by these very same companies whose profits make possible the research that allows for such breakthroughs."
During the course of his article, Troy discusses the issues that threaten to derail medical progress (litigation, an overly cautious FDA and, of course, legislation to put Uncle Sam in charge of our healthcare). Troy concludes:
"Just as there is potential danger from the way in which Americans take the power of the antibiotic for granted, so, too, one of the greatest threats to our health and continued welfare is that Americans in the present day, and particularly their leaders, are taking for granted the power, potency, and progress flowing from life-saving medical innovations. And in so doing, they may unknowingly prevent the kind of advance that could contribute as vitally to the welfare of the 21st century as the discovery of the antibiotic altered the course of human history for the better in the century just concluded."
Tevi's complete article can be found here.
All the rest is, well, commentary.
We talked about it here:
“The Vast Reich Wing Conspiracy”
And here:
“Pink Cadillac”
And now we welcome the Wall Street Journal to the debate. Here’s what they had to say on this today:
Taxing Health Care
Obama and Democrats owe John McCain an apology.
Democrats have spent years arguing that proposals to equalize the tax treatment of health insurance are an outrage against the American people. Workers pay no income or payroll taxes on the value of job-based plans, but the same hand isn't extended to individuals who must buy coverage on their own. Last year liberals mauled John McCain for daring to touch the employer-based exclusion to finance more coverage for the individually uninsured. He was proposing "a multitrillion-dollar tax hike -- the largest middle-class tax hike in history," said Barack Obama, whose TV ads were brutal.
But now Democrats need the money to finance $1.2 trillion or more for their new health insurance entitlement. Last week Senate Finance Chairman Max Baucus released his revenue "policy options" and high on the list is . . . taxing health benefits. Or listen to White House budget director Peter Orszag, who recently told CNN's John King that the exclusion "was not in the President's campaign plan, it wasn't in our budget. Clearly, some Members of Congress are putting it on the table and we are going to have to let this play out."
Mr. King tried again. "Let this play out. But would the President sign a bill that includes a pretty significant tax increase? That would be a tax increase." Mr. Orszag: "We're not going to be -- I think it's premature to be commenting on individual items . . . There are lots of ideas that are being put on the table." Translation: You betcha he'd sign it.
The tax exclusion is such a big revenue prize because Mr. Baucus is scrubbing every other tax nook and cranny and only coming up with rounding errors. A sampler:
- Impose an excise tax on hard alcohol, beer and some kinds of wine. That would be in addition to a sin tax on beverages sweetened with sugar or high-fructose corn syrup, such as soda. Mr. Baucus doesn't offer revenue estimates, though the Congressional Budget Office says a $16 per proof gallon alcohol tax might raise $60 billion over 10 years, and another $50.4 billion at three cents per 12 ounces of sugary drink.
- End or limit the tax-exempt status of charitable hospitals, which only costs currently a mere $6 billion a year.
- Make college students in work-study programs subject to the payroll tax. Also targeted are medical residents, perhaps on the principle that they'll one day be "rich" doctors. CBO has no score on these.
- Reducing Medicare reimbursement rates for supposedly "over valued physician services," such as diagnostic imaging. CBO says that requiring doctors to get prior clearance could save $1 billion in 10 years.
- For individuals with high-deductible insurance plans, contributions to health savings accounts would no longer be tax deductible. That would penalize patients who choose plans that encourage them to be informed consumers. CBO says that banning HSA payments entirely would yield all of $10 billion.
By contrast, the employer-based exclusion offers a huge money pot -- an estimated $226 billion in 2008. Yet as liberal MIT economist Jonathan Gruber recently told Mr. Baucus's committee, "no health expert today would ever set up a health system with such an enormous tax subsidy to a particular form of insurance" (his emphasis). It creates a coverage gap between workers who receive it from their employers and those who pay -- or can't afford to pay -- with after-tax money.
The tax exclusion is also one reason health costs continue to rise. It encourages workers to take an extra dollar of compensation in fringe benefits instead of cash while also routing low-deductible health spending through third parties. Some 84 cents of every medical dollar is spent by someone other than the patient. The insured have no incentives to make cost-conscious decisions about care.
So reforming the exclusion would inject a dose of discipline into American medicine. But for most Democrats the goal isn't to create a more rational health-insurance market. They simply want the revenue for another government program. Mr. Baucus won't target gold-plated employer insurance plans in general, because union-negotiated benefits are usually gold-plated. Rather, he may cap or phase out the exclusion by income, starting with workers earning more than $200,000. Insurance options that don't conform to government diktats (health savings accounts) would also lose any tax advantage. This would do nothing for market efficiency, but it would be one more stealth tax increase.
Democrats owe an apology to Mr. McCain, and it'll be fascinating to see if they will now suffer a political backlash of their own making. Having told the country that this tax reform is really a tax increase, Democrats are opening themselves to the same attacks they leveled against Republicans.
They could avoid that fate if they used the tax exclusion money to finance, say, a tax credit for the uninsured. That would be a genuinely bipartisan reform. But liberals won't accept that because they want to take one giant step toward government-run health care. And the only way they can pay for it is by taxing everything in sight, including your current health insurance.
Sir Michael noted that comparative effectiveness cannot be conducted by relying on randomized clinical trials and should instead use tools that allow doctors to determine who responds best to what treatments over time. Predictive and interventional approaches are obviously the most valuable. Such tools can provide every one a clearer idea of the value of care.
Over the course of the four hours we spent together that the way forward requires an approach described artfully by Ralph Snyderman, Chairman Emeritus of Duke University Medical Center:
- Start with high power predictive tools for big time clinical decions with short term impact on major diseases
- Create model clinical settings where clinical data and genetic information can be collected and combined
- Use clinical setting to establish predictive reliability of clinical decision tools and measure clinical outcomes
- Measure value of such tools to employers, individuals and health plans
Ultimately the reimbursement for health care will have to be inverted to pay for prospective care and reward targeted therapies.
But our critical path group is committed to doing the hard work. We don't need any more conferences about comparative effectiveness. We need to take the first steps forward.
Specifically:
To ensure that executive departments and agencies include statements of preemption in regulations only when such statements have a sufficient legal basis:
1. Heads of departments and agencies should not include in regulatory preambles statements that the department or agency intends to preempt State law through the regulation except where preemption provisions are also included in the codified regulation.
2. Heads of departments and agencies should not include preemption provisions in codified regulations except where such provisions would be justified under legal principles governing preemption, including the principles outlined in Executive Order 13132.
And here's a direct slap at the FDA's New Labeling Rule preamble:
3. Heads of departments and agencies should review regulations issued within the past 10 years that contain statements in regulatory preambles or codified provisions intended by the department or agency to preempt State law, in order to decide whether such statements or provisions are justified under applicable legal principles governing preemption. Where the head of a department or agency determines that a regulatory statement of preemption or codified regulatory provision cannot be so justified, the head of that department or agency should initiate appropriate action, which may include amendment of the relevant regulation.
The complete memo can be found here.
This should put to bed any lingering doubts as to the Administration's views on the topic. Happy Hour for the trial bar begins immediately.
Pretty subjective proposition.
The draft guidance (which can be found here) also introduces a new term, "net impression." DDMAC will now consider the “net impression” of consumer ads and physician detailing materials to determine if a piece conveys accurate information about a particular product.
In other words, rather than creating brighter lines so that industry can be in compliance, the agency is opting for even greater regulatory ambiguity.
Not good.
On May 4-5 the Harvard Business School Health Alumni Association along with the Young Presidents Organization/World Presidents' Organization (YPO/WPO) sponsored a conference in Washington, DC, "Health Reform at the Intersection of Government and Markets.” After two days of robust debate and discussion over a wide range of issues, the event ended with a troubling episode.
So troubling, in fact, that one physician in attendance along with another independent businessman felt obligated to write to Randy Cohen, who pens “The Ethicist” column at the New York Times, with the following query:
“We were attending a conference on health reform which had included an impromptu presentation on the swine flu pandemic. As the conference was closing, a physician was introduced and he said that as a “treat” for all his fellow attendees he would write prescriptions for TAMIFLU and that if he ran out of scripts, he would send one to anyone who emailed him a request. A large line immediately formed of people eager to avoid the risk of shortages or rationing. When confronted with our question as to the ethics and legality of his offer, he explained that he was a physician and had worked with the CDC and was confident he was acting in a morally and professionally correct manner – was he? For that matter, were the conference organizers in ethically troubling territory?”
To which Cohen replied:
“As you know, it is a violation of medical ethics to prescribe to a non-patient, i.e. to someone you've not examined (albeit a violation committed by, one study suggests, 100% of physicians). It is also a more general ethical transgression for a healthy person to stockpile a medication that might end up in short supply. In a more just world, this guy would have his license suspended. But I wouldn't count on that happening.”
Over lunch the other day, my doctor friend shared the rest of the story:
“From every angle, this was reprehensible and should not have been permitted. From a medical professional code of conduct point of view, it is an abuse of prescriptive authority to offer Rx of any drug to people who are not patients of a prescribing physician. It is medically irresponsible to give access to drugs which are not without risk as any adverse event could not be accountable (or appropriately handled) to this particular physician prescribing Tamiflu.
This is an act that can be considered illegal in several states, ethically wrong, medically reckless and dangerous, and inexcusable, especially in the manner it was presented to the conference attendees. From a "conflict-of-interest" point of view, this physician was offering Rx as a "treat" (code word: perk/kickback) to conference attendees who had paid to come to the conference. So, while there is no direct exchange of money for the Rx which will benefit this physician, it could easily be interpreted that he was an agent of the conference (since the conference organizers condoned the offer by allowing him the podium to present his offer and did not rebuke or stop him from doing so) and therefore Rx access was exchanged for money. From a supply chain, he was encouraging stockpiling of Rx, which is to give people access to a Rx for storage in their medicine cabinets (which will likely not be used) and taking it out of the supply for the nation.
Given how much we were talking about economic forces of supply/demand affecting behavior, it is highly ironic that this was permitted. From a public health perspective, this physician took advantage of a perceived panic (pandemic only means "widespread" and does not indicate severity) and called his actions "giving access" to a "needed therapeutic" during a "pandemic." It seems interesting that if he truly felt that way, then why did he not go out onto the streets or to the inner city and offer his scripts to others (who wouldn't necessarily have access). Funny how he should only offer this to people who most easily can gain access to their physician should they want and need the Rx (members of HBS Health Alumni Association). This could also be interpreted as an odious way to win friends and influence people.
And finally, from a medical practice point of view, Tamiflu is not without risk. When challenged, this physician merely mentioned that he was asking everyone if they had kidney problems (a contraindication for prescribing the Rx), but he did not warn anyone that there have been quite a number of cases internationally of behavioral changes that are reported with the use of Tamiflu. Without discussing risk and only touting benefit could be defined as medical malpractice.
As organizers of this event, this behavior should not have been encouraged nor condoned. Silence is the wrong action because it is not recognizing that everything this did in the final two minutes, in effect, undermined the intention and perception of the conference.”
Indeed.
Dr. Brock – what can you do about this?
Somehow, I don't think Adam Smith had this in mind.....
I bought my daughter Botox jabs for her 18th birthday...says mother who has spent £45,000 on plastic surgery
By Tamara Cohen
May 26th 2009
Most mothers would aspire to pass on something of themselves to a teenage daughter.
But for Margaret King, that didn't mean offering young Jodie advice on the opposite sex or even guiding her on her wardrobe choices.
For her 18th birthday, she bought her Botox injections to get rid of the 'wrinkles' on the teenager's forehead.

Jodie King and mother Margaret, who bought her daughter Botox injections for her 18th birthday
Mrs King, who has spent £45,000 on cosmetic surgery procedures for herself, said: 'Jodie's forehead is like mine - she gets pronounced lines when she makes a facial expression. I knew Botox would solve the problem.'
Many surgeons do not recommend using Botox under the age of 30 because the skin has not sufficiently wrinkled and it could lead to an unnecessary loss of facial expression.
But Jodie, who had been worried about her complexion, is now addicted to the jabs and has spent £1,000 on them. "
"According to the Congressional Budget Office, taxing all employee health benefits would yield a whopping $246 billion every year. Even limiting the tax to higher-income employees would go a long way to funding universal health care. Employer-provided health insurance is the biggest tax break in the whole federal income tax system.
Tax-free employer-provided health care is also, in effect, the government-backed health insurance system we now have. It now covers three-fifths of the American population under 65. Seventy percent of the 253 million Americans with health insurance receive at least some of it through their employers."
Lately we've been hearing about all those "wealthy executives" who get "Cadillac health plans." Reich joins in as follow:
"Top executives and their families get gold-plated plans guaranteeing top-notch medical attention for just about every risk imaginable, along with extra coverage in retirement."
(For more on "Cadillac" health plans, click here)
And here comes who gets it in the neck -- "The good news is that a program providing universal health care doesn’t need the full $246 billion a year generated if every employee now receiving tax-free health benefits had to start paying taxes on them. Obama’s health care reserve fund needs around $650 billion over ten years. So a sensible and politically feasible alternative is to limit tax-free employer-provided health benefits to workers whose incomes are under, say, $100,000 a year, and subject those with higher incomes to progressively higher taxes on them."
That's right -- higher taxes for Americans with employer-provided healthcare who earn over $100,00 a year.
Do you feel like a "wealthy executive" yet?