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I will be writing about this issue in far greater depth soon, but there seems to be a view in Beltwayland, among the suburbs of which are the NY Times and the LA Times, that drug prices ought in some sense to reflect “costs,” however defined, and that efforts by the pharmaceutical producers to establish prices for new drugs in accordance with their higher economic (or medical) value is illegitimate.

Well. Let us recognize that politics by its very nature is the art of wealth redistribution, always and everywhere, and so discussions of drug prices must proceed with that context firmly in mind. Drug development is a process of iterative investment, research, and testing; that process must appeal to the capital market (investors) in order to be viable, that is, expected returns (adjusted for risk) must justify the prospective costs of the development process for any given project. If prices reflect only costs and not value, investment streams will be reduced from levels that would prevail otherwise; and that means automatically that the future supply of new and improved medicines will be lower than in the alternative.

And so the preference for cost-based drug pricing on the part of those utterly compassionate with other people’s money in the end boils down to the argument that future patients ought to subsidize current ones. It is only a coincidence, of course, that it is the current patients who vote; thus does the wealth redistribution dynamic emerge yet again. And yet again the highminded compassion of the elites proves as phony as it is in so very many other contexts, except that a reduction in the supply of drugs means more future suffering and higher medical costs overall. Such are the outcomes yielded by the nostrums of the unthinking.

Apparently Consumers Union thinks that we should pay higher, not lower, hospital and doctor bills to prop up failing hospitals and subsidize charity care. At least that’s the rationale for the so-called consumer group which publishes price and quality ratings stereos and cars and supports price controls on prescription drugs for opposing the trend towards publishing the prices of doctor and hospital services. See for examples. Bill Vaughn who publishes Consumer Reports, the ratings guides said that ” if enough patients choose less expensive hospitals, other facilities could have trouble caring for patients who cannot pay for services, which “would further break up the social safety net.” Or the more competitive hospitals would be able to care for more patients. Or perhaps the entire system would respond to consumer demand and begin to actuallly prevent disease before it starts rather than treat it after it happens using the newer medicines whose prices Consumer Union wants government to lower. In otherwords, Consumer Union wants government to limit the freedom of people to choose the best price for hospital and physician care and to drive down the price of new medicines artificially through price controls.

Ten years ago, few people predicted the impact of the Internet or the cell phone. Today the digital revolution has transformed the way we work, live and learn. Information is being turned into knowledge literally at the speed of light. Today, we are on the verge of another revolution that will dramatically change the way we live and how well we live.

So why aren’t people paying attention?

Over the next decade, researchers will use genomics to develop many more disease-specific drugs and diagnostics to predict who will respond best and who needs a medicine most than ever before. And medical information will be used to discover the best way to care for people based upon their unique genetic and individual circumstances.

So why doesn’t the media write about it more (or more enthusiastically)?

Drug, biotech and diagnostic firms are already gathering genetic information on patients taking part in clinical trials. New technological tools are currently available or under development that will help achieve this vision. The real concern, for industry and society alike, is not that technology will not advance, but that the technology itself will not be fully used.

So why isn’t government doing something to help FDA facilitate and advance the public health?

Last week the FDA announced the next phase of the Critical Path project — and in great detail. Unfortunately the announcement was largely ignored by the media, assorted thought-leaders, and our elected representatives.

We here at will do our best to fill in the blanks, but we’d certainly appreciate some assistance from the MSM

Well, not really. But I did enjoy my 12 minute live segment on last night’s NewsHour with Jim Lehrer. Ray Suarez interviewed me and Dr. Alistair Wood on the future of the FDA. We talked about Andy von Eschenbach and Critical Path, and personalized medicine, and the fact that if we want the FDA to do more we need to make sure the agency is properly funded. And, yes, we also touched on Plan B.

Here’s a link to the audio archive:

And here’s the video clip (“FDA Under Fire”):

The Name Game

  • 03.17.2006

Interesting article by Anna Mathews in today’s edition of the Wall Street Journal on how the FDA approaches the regulation of prescription drug product names.

Here’s a sample …

“The FDA’s scrutiny, an odd corner of the federal bureaucracy where language meets safety, is a growing problem for drug companies. They spend as much as $1 million per product making up, checking and registering words like Lipitor, Prozac and Zyprexa. In the 2004 fiscal year, the agency’s name-safety reviewers turned down 123, or 36%, of the proposed names they received. That was up from 90, or 29%, the year before, and 86, or 31%, in 2002. The rejection rate now may be even higher. The FDA recently toughened its procedure by requiring that possible names be checked against overseas brands because of concerns about U.S. drugs that have names identical to some used abroad, but very different uses.”

“To find out whether a drug works, a manufacturer runs studies, with the guidance of the FDA. The agency then decides whether the product merits approval. With a proposed name, the agency does its own internal tests to see whether the name is likely to be confused with that of an existing drug. The tests involve writing the names on mock prescriptions to check how they would look in real-world conditions, conducting Web searches and using a proprietary software program that the agency has never released.”

The full story (and it is worth reading) can be found at:

Here’s a link the the FDA’s Critical Path Opportunities Report.

Download file

Andy who?

  • 03.16.2006

Yesterday I spent a lot of time talking to reporters about why I believe Andy von Eschenbach will make a terrific FDA Commissioner. Today all the news is about Plan B. And while that’s certainly relevant, what about some background on AvE? Isn’t that important information for the public to know? Doesn’t the media have a responsibility to report it?

Guess not. Too bad. We will.

It’s official. President Bush nominates Andy.

It’s news today — even though DrugWonks reported it last week.

But whatever — it’s the right choice.

Graham Crackers

  • 03.15.2006

Bob Goldberg calls it like he sees it …

Last week, according to Fox News, South Carolina Senator Lindsay Graham urged GOP activists to make sure the party returns to its roots before Election Day. “We’re not going to win by being Democrats,” he said “Conservatism sells.”

Does being a conservative include voting to place the pharmaceutical and biotechnology industry under the the same government controls that exist in Canada and the United Kingdom? The same controls that have destroyed innovation and delayed access to new medicines in Germany? How does Graham’s flirtation with command and control health care square with his desire to ensure the party returns to its roots? Or does he mean pushing conservative principles six feet under?

Bob Goldberg has his mind in the toilet as well …

The last time I checked Costco did not control 60 percent of the toilet paper market and therefore did not, as a matter of course tell people to use the Kirkland (that’s the Costco house brand for you outsiders) before stepping up to the Charmin two-ply plush. And by the way, if you don’t like Costco’s limited selection of items for each type of good, you can go to Walmart or Target or Kohl’s or any number of department stores, etc.

This is not about price. This is all about choice and value. And the fact is there is not one example, not one, of a government system “negotiating” drug prices where access to medicines are not delayed or denied and where the total cost of treating disease does not balloon as a result and where people do not die waiting for important drugs. THEY are the ones making this about saving money. Let’s make this a battle about saving lives now and in the future.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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