Progress
Wednesday, October 22 2008
From Maggie Mahar, in part one of a two-parter about health care costs:
The culprit behind long-term health care inflation, the study reveals, is not a “who” but a what: “advancing medical technologies” combined with low productivity.
She’s talking about a report from the Robert Wood Johnson Foundation. One of their conclusions is that “Technology – not demographics or medical malpractice – is the key driver of health spending, accounting for an estimated half to two-thirds of spending growth.”
What do “advancing medical technologies combined with low productivity” look like? If you have Crohn’s disease, it means you probably started off taking prednisone (a generic, so cheap) and/or a 5-ASA like Asacol (patented, so about $350 a month). On this regimen, you still had occasional flares, and sometimes horrific side effects from the prednisone, but you got by. Today you might be getting Remicade (~$3500 a month), which controls the flares better but also leaves you susceptible to infections and rare cancers, not to mention the possibility of a severe allergic reaction to the drug itself. Meanwhile, you’re probably still taking Asacol as well. Are you doing better than you were? Maybe. Are you ten times as healthy as you were? No fricking way. Is your health care dollar much much less productive than it used to be? Definitely.
Of course, Remicade is a blockbuster for its maker Centocor, so now other drug makers are focusing their research on similar – and similarly expensive – biologics: Humira by Abbott, Cimzia by UCB, and so on. These companies are spending millions of dollars to convince patients and doctors that their drug is the bestest, but not a cent looking for a more cost-effective treatment. Efficiency just isn’t anywhere in the business model of the modern pharmaceutical company.
Fun fact: Robert Wood Johnson earned his fortune as head of Johnson & Johnson. In 1998, right after it launched Remicade, Centocor was bought by Johnson & Johnson. Ah… the circle of life!
I’ll look forward to part two of Maggie’s post. In the meantime, I’m stuck wondering why Robert Wood Johnson’s parents passed up such a marvelous opportunity – why not Peter Wood Johnson? or Eberhard Wood Johnson? or Rod “Big Red” Wood Johnson? What a shame.
