Health Business Blog

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

I’m upset about the Bextra withdrawal

A close friend of mine has rheumatoid arthritis. Under the supervision of her rheumatologist she’s tried all the prescription and OTC options and found that Pfizer’s Bextra –and not any other COX-2 inhibitor or other medication– worked well for her. I know someone else with a similar story about Vioxx.

Yesterday the FDA asked Pfizer to withdraw Bextra from the market. A number of cardiovascular, gastro-intestinal, and dermatological adverse events –some fatal, along with Bextra’s failure to prove its superiority to other treatments, doomed the drug. In an unusual move, the FDA overruled its Advisory Panel, which had recommended that the drug be allowed to stay on the market. The only hope the FDA left for patients who feel they need Bextra was to state that a proposal for a compassionate use program would be received favorably, if Pfizer wants to propose one.

Something’s gone terribly wrong here. The pharmaceutical companies made a big mistake by promoting COX-2 inhibitors to the widest possible customer base. As a result it looks like a number of people who should have been treated with the occasional Tylenol or nothing at all ended up sick or dead. And after the FDA was caught asleep at the switch, it may have overreacted to the latest data. As I wrote last month, J&J is taking the lead in balancing risks and benefits in its direct to consumer advertising –this is in the industry’s own best interest.

I read Marcia Angell’s book, The Truth About the Drug Companies when it came out, and there is a lot of truth in there. But I disagree with one of her main arguments –that me-too drugs (similar drugs in the same class) are bad and should not be allowed. Celebrex, Vioxx, Bextra, and the rest may be quite similar, but for whatever reason each seems to work better in some patients than others. There are similar stories in other drug classes, notably in drugs for depression. It doesn’t matter to me whether the motives of the drug companies are pure; I’d rather have more choice than less.

In 20 years or so, when pharmacogenomics and personalized medicine are the norm, we won’t have to go through trial and error treatment with many different drugs. But for now it’s the best we can do.

Stem cell funding in California triggers reactions back East

I’m quoted briefly in the March issue of Boston Magazine in an article(“Hard Cell”) about the difficulties Massachusetts is having in establishing prominence in stem cells. There’s no way Massachusetts can compete with the stem cell funding levels that are promised in California, and people here are nervous.

The Harvard Stem Cell Institute is looking to raise about $100 million, but even that is small change compared to the $3 billion initiative in California. In addition, tussles between the state legislature and Governor Mitt Romney on this issue don’t increase the draw.

There are some small signs of movement on the Federal level. The New York Times reports today that the leadership of the NIH is beginning to agitate for a loosening of restrictions on Federally funded embryonic stem cell work. The article mentions that Federally funded researchers are at a disadvantage to those funded in California. It doesn’t mention that they are also at a disadvantage compared to overseas researchers in countries like South Korea, Israel, and Australia.

Encouraging signs of hospital transparency

The Wall Street Journal reports that a few hospitals are publishing more quality data than required by Medicare’s Hospital Compare website. No hospital is the best in every treatment area, so the overwhelming majority have been unwilling to publish comprehensive data that would show their weak spots. But Dartmouth-Hitchcock Medical Center and The Cleveland Clinic are publishing comprehensive information, while four hospitals in Colorado, and hospitals in New York State are publishing more information than is typically available. (Note: the Dartmouth site was down when I tried it this morning.)

If the trend gathers momentum, it’s just a matter of time before hospitals that don’t publish comprehensive quality information will be at a competitive disadvantage. At some point we can expect to see most or all hospitals publish data on quality and even cost effectiveness.

This trend should be encouraged. It will help hospitals improve their quality and keep costs under control.

Pregnant women lead the way in shopping for health care

Yesterday I contrasted consumer businesses –where sophisticated customers are in the driver’s seat– with health care, where they aren’t. In consumer businesses, like computers, detailed quality and technical information is widely available. And of course prices are posted. None of this is so in health care.

Despite the challenges, unininsured and under-insured pregnant couples are using their sophisticated shopping talents to finding good, affordable maternity care, according to the Wall Street Journal (Childbirth for Bargain-Hunters). They are buying maternity discount cards, such as MaternityCard, and also attempting to negotiate rates with doctors and hospitals, using insurance company reimbursements as their price benchmarks. It’s somewhat reminiscent of how automotive pricing transparency evolved. Everyone used to deal with sticker prices, then slowly adopted Edmunds for dealer cost data and used buying clubs with pre-negotiated discounts. Now, even the dealers quote their prices relative to the invoice.

Childbirth is a clear place to expect consumers to try to take charge. Pregnant couples have an extended encounter with the health care system, giving them time to shop and deal. It’s also often a repeat experience, so the couple knows more-or-less what’s involved. Pregnant women are usually healthy, so they have the energy to confront the system. And pregnancy is for younger people who are more apt to view health care as a consumer service industry and want to engage with their caregivers on a more equal basis.

The customer is king –but not yet the patient

The Economist has a special report this week on how the internet has empowered customers. Dell’s chief marketing officer is quoted as saying, “I am constantly amazed at the confidence level and sophistication of the average consumer.” There is tremendous technical detail and commentary available about computers and other consumer products, and customers have become savvy about their choices. According to the article, when Dell makes a price change on its website it sees an impact within one minute. Consumer oriented companies are now at the mercy of their customers.

Alas, things aren’t like that in health care. Quality data is rudimentary and spotty. For example, a $7.95 profile of my physician on HealthGrades tells where he went to school, what languages he speaks, and whether he has any malpractice judgments against him. So what? The new Hospital Compare website goes a little further with quality data on hospitals, but is limited in scope. (To be fair to the health care system, this is more information than you can easily find on accountants, lawyers, or consultants.)

Now AOL founder Steve Case has announced plans to invest $500 million of his $825 million net worth in launching a new consumer oriented health care, wellness, and resorts company, according to Business Week. Case is motivated by the death from brain cancer of his older brother, Daniel Case III.

[Case] saw for himself just how difficult it is for even the privileged to make well-informed decisions about their care. Case… is interested in [companies] that provide online data about the price and quality of doctors and those that make available electronic medical records; he’s considering everything from high-end personalized health coaching services to clinics housed in Target stores. As he says: “Health care is monumentally complex, confusing, inefficient, and inconvenient. Meanwhile it’s the biggest industry in the country, and everybody hates it.”

Case is not the first tech entrepreneur to look at health care and think he can make things better. I’m reminded of Jim Clark (of Silicon Graphics and Netscape fame) who started Healtheon amidst grandiose talk about revolutionizing health care. He ended up with a successful business formed by mergers and acquisitions, but we’re still awaiting the revolution.