Tag Archives: health care reform

Will Health Care Reform Slow Medical Research?

The nation’s noisy debate over health care reform seems to be generating more heat than light. As a rule of thumb, I say, don’t believe half of what you hear, and be suspicious about the other half.

That said, I’d like to look at one little piece of the health care reform debate, which is the claim that limiting what pharmaceutical companies charge for prescription drugs would hinder medical innovation. Americans pay far higher prices for the same prescription drugs than anyone else in the world, but it is argued that this is necessary to pay for research to develop new drugs and other health care products.

Analysis

Certainly, medical innovation is critically important to people suffering from mesothelioma and other asbestos-related diseases. There is promising research being done in the area of mesothelioma treatments. Would health care reform really slow down medical research?

Recently at the Washington Post, Ezra Klein interviewed Dr. Jerry Avorn, chief of the division of pharmacoepidemiology and pharmacoeconomics at Brigham and Women’s Hospital in Boston. Dr. Avorn called the argument that pharmaceutical companies need big profits for research “specious” for three reasons.

First, according to their own filings with the Security and exchange Commission, the big pharmaceutical companies are spending only 15 cents of every dollar on research. By comparison, they spend 30 cents on marketing and administration. “I think any venture capitalist would say a company spending 15 percent on research is not a robust innovation engine,” Dr. Avorn said.

Second, the big pharmaceutical companies really haven’t been generating that many new drugs in recent years. And a large percentage of new drug products are “me, too” drugs. When a drug’s patent is about to run out, pharmaceutical companies will bring out a new version of the old drug that is just different enough to earn a new patent. The new drug may be no more effective than the old drug, but it won’t have any competition from generic drugs so the drug companies can charge more for it.

Third, for many years most of the breakthrough research has not been done at private pharmaceutical companies but at federally funded research labs, usually universities or academic medical facilities. The for-profit drug companies then take that basic research and use it to create and manufacture their products. The research done by drug companies does take time and money, but they aren’t doing the innovation by themselves.

I read recently that the pharmaceutical companies spend $11 million a day for “direct-to-consumer” advertising of prescription drugs. You’ve seen the ads — they usually end with a voice-over that says “Ask your doctor if [name of drug] is right for you.” Until 1997, prescription drugs were advertised only in medical journals and other media for doctors.

By advertising to consumers, the pharmaceutical companies are encouraging people to go to their doctors requesting the brand-name drug — Gee, doctor, my toenails look funny. Shouldn’t I be taking that drug I saw on teevee? Is that $11 million a day really making anyone healthier? Hmm, what if that $11 million were being spent on medical research?

— Barbara O’Brien