Category: Policy and politics

Small Business Health Plans

published date
December 21st, 2006 by

Jay Ragley of the National Federation of Independent Businesses makes a good case for Small Business Health Plans and other measures –such as a relaxation in mandated benefits– that would make it easier for smaller companies to provide health insurance.

You can read his editorial in South Carolina’s Greenville News.

The value of private funds for drug research

published date
December 20th, 2006 by

Babies with “short bowel syndrome” are fed intravenously to keep them alive. Unfortunately prolonged IV feeding often leads to liver failure. Doctors at Children’s Hospital in Boston haven’t been satisfied with that trade-off and have experimented with a variety of ways to avert liver problems. A particularly promising remedy is to use Omegaven, a fish-oil based formula that’s on the market in Europe (for adults) but not the US.

Omegaven’s maker, Fresenius AG doesn’t want to market Omegaven here. Basically, they’ve decided it’s not in their commercial interest. Instead Fresenius has a new product in development that they’d prefer to bring to market. Meanwhile Fresenius is happy to sell its existing product, Intralipid. That’s tough luck for babies who need treatment now. Fresenius has actively resisted efforts to allow testing of Omegaven, and the FDA hadn’t been too helpful either. The Wall Street Journal wrote an article on the topic (A Doctor’s Push For Drug Pits Him Against Its Maker) a month ago.

Now, according to another Wall Street Journal article (Trial to Test Drug for Sick Babies) the trial is going ahead. The FDA relented and The March of Dimes stepped in with funding. The trial will pit Omegaven against Intralipid. Babies who start on Intralipid will be able to switch to Omegaven if they develop liver damage. Likewise babies starting on Omegaven will be able to switch to Intralipid if they have problems.

Meanwhile Fresenius is getting a free lesson in how not to build a corporate reputation in the US.

Based on what I read in the Journal, I’m going to make a donation to the March of Dimes, and I suggest you consider doing the same. (MedImmune is matching donations dollar for dollar during December, up to $50,000.)

Henry Ford regulates pharma reps

published date
December 19th, 2006 by

The Henry Ford Health System is banning free lunches and gifts by pharmaceutical and medical equipment sales reps, starting January 1, according to the Detroit Free Press. Representatives will also have to schedule appointments with physicians and pay a $100 certification fee to Henry Ford before being allowed to do so.

“The evidence shows that when physicians are exposed to pharmaceutical representatives, their decisions are different,” Dr. A. Mark Fendrick, a U-M drug price specialist, told the Detroit Free Press. “It is very unusual to find generic drugs in a physician’s sample closet.”

The program is portrayed as a way to keep industry in line, but I look at it as part of the maturation of the relationship between pharma and docs. Sales reps buy lunch and provide gifts because doctors want that to happen; many expect it as a kind of entitlement. It’s just as well to have that practice end. I’d suggest Henry Ford use that $100/rep tax to fund an education program for physicians to help them get the most out of their interaction with drug reps. Maybe an online course to explain industry economics and help doctors ask the right questions.

There are at least a couple of companies I can think of that could benefit from Henry Ford’s decision:

  • PreferredTime, which schedules rep appointments with physicians
  • Medvantx, which makes machines that provide generic samples in doctors’ offices

Missing the point on biogenerics

published date
December 18th, 2006 by

A Boston Globe article, Lobbyists focus on safety in debate over generic drugs, describes the positions taken by the biotech industry and generic industry over proposals to create a regulatory pathway for generic versions of biotech drugs. In essence:

  • Biotech manufacturers want generic players to conduct extensive clinical trials before gaining regulatory approval. According to their association, “Unlike a pharmaceutical product, where you can simply demonstrate that you have the same chemical formula and you don’t need the clinical data, a follow-on biologic is a very, very different process.” Obviously this will drive up the cost of entry dramatically and delay the introduction of new products.
  • Generic manufacturers admit there is something to the argument, but they want legislation to explicitly authorize biotech generics.

Generic versions of chemically based drugs have helped keep drug spending under control, and there’s an implicit assumption that the only way to control biotech prices is with biogenerics. However, there is another way, as I’ve discussed in A better idea than biogenerics:

  • Allow biotech drugs to be approved and marketed as they are now, without price regulation
  • After patent expiration or after a certain number of years on the market, regulate price. The price could be based on cost of goods, a percent of the previous selling price, or some other mechanism

Biotech and generic company lobbyists aren’t going to be interested, but lobbyists for taxpayers should be!

Cracking down on abusive medical debt collection practices

published date
December 18th, 2006 by

Thank goodness for the Boston Globe. The four-part series on Debtors’ Hell that ran over the summer highlighted the abusive nature of the debt collection business. Now, at least some Massachusetts counties are responding.

The headlines from the summer series more or less tell you what you need to know:

  • Part 1: Preying on Red-Ink America. No mercy for consumers
  • Part 2: A Court System Compromised. Dignity faces a steamroller
  • Part 3: Enforcers’ might goes unchecked
  • Part 4: National Crisis, Official Silence. Regulators, policy makers seldom intervene

One of the articles in part four, For some, a bitter remedy for overdue medical dental bills, described the following, all-too-common situation:

When Marcy Armington objected to her obstetrician’s bill, believing her health insurance should cover the $300 balance due for the birth of her daughter, she had no idea that such a common dispute would leave her vulnerable to the ”The Hubbard Law Office Experience.”

That would be attorney Richard R. Hubbard of Uxbridge. Hubbard sued Armington on behalf of Dr. Thomas A. Spina of Hopedale – though the suit listed the wrong address, so she knew nothing about it. Last March, two Worcester County sheriff’s deputies came to her Milford home to take her car. To keep it, Armington had to pay $983, to cover the $383 court judgment and the $600 sheriff’s fee.

Debt collection is a very sleazy business to begin with as the series describes—

Constables…carry badges and have arrest powers — yet are untrained and unmonitored. [M]any do the dirty work of property seizure for some of the most aggressive debt collectors in the state… In Boston, 88 of the 186 constables have criminal arrest records of one kind or another…

–so I’m not surprised that debt collectors would try these tactics. But what’s appalling to me is that unpaid, contested medical bills are considered legitimate debt and that sheriffs so willingly participate. Anyone in the medical field knows bills are often just plain wrong and almost always hard to understand.

There’s still nothing like front-page exposure in a big city newspaper to effect change. The Globe reported today that sheriffs in three large counties are no longer seizing cars to repay medical and dental expenses, nor when the amounts owed are less than $1500. Those changes have been enough to drop seizures by half, which tells you something about how common these cases are.

As previously reported, medical bills are a major contributor to bankruptcy filings. Even people with health insurance can end up in BK if they encounter a serious, prolonged illness. One reason is that medical care is expensive. Another is that administrative errors, bureaucratic indifference, and aggressive “debt” collection are enough to drive people over the edge.