Health Business Blog

Health care business consultant and policy expert David E. Williams share his views

Neglect of manufacturing in the pharmaceutical industry

Today’s Wall St. Journal describes how quality control problems in pharmaceutical manufacturing plants are causing shortages of critical medicines, including methotrexate, which is used to treat leukemia in children.

For those of us working in the industry, it’s not surprising news. During the 1990s, the pharmaceutical industry focused on marketing and to a lesser extent R&D. Manufacturing was neglected. According to the Pharmaceutical Research and Manufacturers Association of America (PhRMA), from 1990 to 2000 marketing employment grew 57%, R&D 11%, and production/quality control shrank by 1%.

Regulatory agencies are none too happy about the situation, and have been moving more aggressively to cite offending plants and even seize products. The FDA’s Dr. Janet Woodcock has called manufacturing, “the poor stepchild” of the pharmaceutical industry and it’s easy to see why.

Closing the feedback loop

Low-cost cholesterol testing machines that provide results within minutes are allowing doctors to provide feedback to patients while they’re still in the office, according to the Boston Globe. Used well, it could be a powerful motivational tool to help patients understand how medications and lifestyle changes can affect their cholesterol results. It’s even getting to the point where it’s practical to have such machines for home use.

Providing feedback to patients, especially for conditions such as high cholesterol and high blood pressure that the patient can’t feel, is a useful way to help patients take better care of themselves. This is often overlooked in discussions of patient compliance.

HMO’s new cost control technique: patient involvement

Charles Baker, CEO of Harvard Pilgrim Healthcare, has apparently given up on traditional managed care cost control tools. Baker is calling for radical, “disruptive” measures to get patients involved in slowing down medical inflation.

He’d like to see a greater use of high-deductible plans, and more disclosure of cost information to generate competition among providers.

When I saw Baker speak a few months back, I had the distinct impression he was looking for ways to steer patients from the high cost, high reputation Harvard hospitals in Boston to more cost effective community hospitals. That will be tough.

Maybe he should speak with the folks at Sam’s Club about how to unleash the genius of the consumer.

The unmentioned piece of the malpractice puzzle

An article in today’s Boston Globe points out that fewer than 1 in 15 patients injured in the hospital actually sues for malpractice. The focus of the national debate has been on the damage done to the medical profession by the occasional sky-high award, but little attention has been given to the much larger number of cases where a patient is injured but not compensated.

We need to turn the debate toward how to prevent patients from being injured by the medical profession in the first place. The answer is to learn from the quality systems in place in other high-risk industries, such as commercial aviation.

Cap on Medicare drug benefits proposed

A week ago I predicted major pressure on the Medicare drug benefit by the 2006 election cycle. It may be coming sooner. According to Modern Healthcare:

Two Republican senators introduced a bill that would limit the cost of the Medicare prescription drug benefit to $395 billion over 10 years, the initial Congressional Budget Office estimate for 2004 to 2013…The bill, sponsored by Sens. Lindsey Graham (S.C.) and Jeff Sessions (Ala.), would establish annual spending caps and require that the benefit be reduced if its cost exceeded the annual limit.