Pharmaphobia by Thomas P. Stossel

Author:Thomas P. Stossel
Language: eng
Format: epub
Tags: undefined
Publisher: Rowman & Littlefield Publishers
Published: 2012-03-22T04:00:00+00:00

Dangerous Discounts

Imatinib exemplifies the aggregate value of industry contributions to product development. Economists have made extensive analyses of health care outcomes in many countries over time and have consistently concluded that medical products extend lives, enhance quality of life, and on balance reduce health care costs by preventing unnecessary hospitalizations, surgeries, and other expensive care.[9]

Conflict-of-interest movement promoters, however, challenge these conclusions by nitpicking at the economists’ data and conclusions.[10] The economists have formally rebutted the objections of those critics, inviting them to explain why, despite an obesity epidemic, we are living longer and healthier lives.[11] That products developed by industry are mainly responsible for these advances is intuitively obvious to anyone, like me, who has worked on the front lines of medical care for a long time.

The conflict-of-interest movement points to the fact that America spends more on health care compared to other countries and achieves similar or worse health outcomes. They imply that excessive medical product prescribing is responsible for the discrepancy.[12] But many of the transnational longevity differences cited are apples-to-oranges comparisons of very different social and geographic circumstances. They largely disappear if one removes auto fatalities and homicides from the analysis. Moreover, prescribing accounts for only approximately 13% of total health care costs,[13] so prescribing costs cannot explain our higher health care expenditures.

These facts, however, do not keep the media from laying the blame for these disparities at the feet of the medical products industry. For example, a front page story in the August 3, 2013, New York Times featured a large photo of a smiling 67-year-old man named Michael Shopenn dressed in a bright red ski suit jauntily snowboarding on a Colorado mountainside. Titled “For Medical Tourists, Simple Math. US Estimate for a New Hip: over $78,000. The Belgian bill: $13,660,” the article recounted how the snowboarder needed a hip replacement because of degenerative hip arthritis. Mr. Shopenn had health insurance, but the insurer wouldn’t pay for the procedure, alleging that the hip condition resulted from a sports injury—a preexisting condition. So Shopenn consulted a local hospital regarding the cost of a hip replacement if he paid out of pocket. The hospital quoted Mr Shopenn a whopping $78,000 price. Shopenn eventually opted to have the procedure done in a Belgian hospital at a cost of $13,660.[14]

The article blames the medical products industry for this discrepancy. Although the price of the hip implant device quoted at the high-priced U.S. hospital was $8,000, nearly twice the $4,200 cost of the one in Belgium, that differential accounts for a mere 6% of the $65,000 variation in procedure sticker prices. Even if the U.S. hospital threw in the device for free, the difference would still be enormous. Why it this health care cost guilt trip the fault of the device manufacturers? What about the roles of the insurance company that wouldn’t cover the procedure or the hospital’s markup of its price?

“If you are making $3 billion a year on Gleevec [imatinib] could you get by with $2 billion? When do

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