Convergences

Biotech & Data

FierceBiotech says that the Health Care Reform draft includes a 12-year data exclusivity provision for biosimilars, thus following the Senate, and dealing a loss to Henry Waxman.

However, passage of Health Care Reform in the near future seems improbable, so the data exclusivity issue will still be open. The House Health Committee is solidly in favor of the longer period, though.

Also, FB's John Carroll notes:

At some point, rising costs may force lawmakers to actually get tough with drugmakers, and that would have an effect on biotech--the de facto R&D arm of the global drug industry. So far along, the industry has managed to dodge a bullet. But something tells me that the war over drug prices won't be ended by this reform bill.

Bleeding Biotech

At The American, a new article Bleeding Biotech, arguing for better protection of intellectual property in data. I frame the question as

In the end, we will never be able to arrive at agreement on the perfect period for data protection for biological research. There is still no agreement on the proper period for patent protection, and that system has been around for hundreds of years. A 20-year period was picked for patents, and it seems to work well enough, so the failure to achieve perfection is not of great concern.

With regard to biotechnology and data exclusivity, we are and will remain similarly ignorant. So the question is actually quite simple: what are the costs of error in each direction?

The answer is that the costs of too much protection are low, or non-existent; the costs of too little are very high. Which should make the decision easy.

State of Biotech

To the extent that the health care debate thinks about biotech, the focus is on how quickly generics can be introduced so as to cut immediate costs.

Back in the real world, investors seem dubious about the industry. Xconomy is running a series and concluded:  "Luke did a massive analysis of the financial health of all the public biotech companies we follow the Boston area and the news… Well, it wasn’t good." The situation:

Even though jobs have been cut, drug candidates have been shelved, and some last-ditch partnerships have been struck, all that frenzied activity didn’t really add up to a strengthened financial future for a majority of the region’s money-losing companies. The cash crunch has prompted a couple of Massachusetts companies to fold this year . . .  a couple more to sell out for a pittance . . .  and one company that actually improved its financial position to move to Wisconsin . . . .

Rather than worrying about sharing the wealth, the political system should be worrying more about how to produce the wealth in the first place. The Xconomy report is not exactly a harbinger of Spring.

The Bio Revolution

Jon Entine defends the bio revolution of genetically modified crops in Green Revolution in the Balance (The American; Oct. 3, 2009).

AEI will hold a session tomorrow on Science and Technology in the Balance? Food Security, Precaution, and the Pesticide Debate.

Health Care & Innovation

Anything written by Reason science correspondence Ronald Bailey is worth reading, and his "Does High-Tech Medicine Mean Higher Health Care Costs?" is no exception.

He analyzes a new study by economist Frank Lichtenberg published by the NBER and finds that the answer is "no." 

FIrst of all:  "[L]ife expectancy increased faster in states that more rapidly adopted advanced diagnostic imaging techniques, newer drugs, and attracted an increasing proportion of doctors from top medical schools." But: there was no correlation between increases in spending on high-tech and new drugs and increases in per capital health care expenditures.

Lichtenberg's tentative explanation is that "while newer diagnostic procedures and drugs are more expensive than their older counterparts, they may reduce the need for costly additional medical treatment."

Bailey's translation:  "In other words, high-tech medicine may initially cost more, but it reduces spending in the long run, while increasing the life expectancies of patients."

So contrary to the fashionable CW, innovation in pharmaceuticals and devices is a remedy for the cost inflation, not a cause.

P.S. Shrinkwrapped also likes Bailey's article, and adds:

[K]eep in mind that every government run healthcare system treats innovations as expenses to be minimized rather than as opportunities to enhance life.  This is inevitable and one of my major reasons for opposing the current plans for fundamental reform in how we finance our healthcare.

I concur - see Saving the Goose: Intellectual Property and Follow-On Biologics (FOB) (pp.13-14).

Spend More on Health

Popular Mechanics interviews health care inventor Dean Kamen, who is one of those who thinks that we should spend more on health care.

We spent on all pharmaceuticals in the United States last year $260 billion. That means all those vaccinations to prevent diseases, all those pills to treat diseases, all those pills to cure them so we don't have to treat them anymore. We spent in all branches of all our pharmaceutical suppliers, $260 billion. . . . Last year what did we spend in the United States on soft drinks? $121 billion.

More:

You can't look at the problem and say, "I want them to do more, better, faster miracles—and not invest in research, not invest in development, and have those miracles delivered to me free." It's unrealistic. And people know that about most things. They do. Nobody expects that just because they've made computers better they're going to give them to you free.

And:

If we want to sit here and keep assuming we should be fighting, and that we should be striving to spend less of our intellectual power and our money on great achievements to come in healthcare—that we should be fighting to make it a smaller piece of our economy—I want to know what you want to make a bigger piece of our economy. What do you want to see the future look like?

I think this debate shows a fundamental lack of vision, a lack of confidence, a lack of understanding of what's possible.

Also from PM, last March: 20 New Biotech Breakthroughs that Will Change Medicine.

Via The Agenda.

Health Care Markets

As noted earlier, Princeton economist Uwe Reinhardt bemoans the confusion and opacity surrounding health pricing.

Someone is doing something about that. The Surgery Center of Oklahoma has a public schedule of prices for common procedures. Furthermore, it has heard the term "competition."

It is no secret to anyone that the pricing of surgical services is at the top of the list of problems in our dysfunctional healthcare system. Bureaucracy at the insurance and hospital levels, cost shifting and the absence of free market principles are among the culprits for what has caused surgical care in the United States to be cost prohibitive. As more and more patients find themselves paying more and more out of pocket, it is clear that something must change. We believe that a very different approach is necessary, one involving transparent and direct pricing.

Gee, Congress better act quickly, because if this approach catches on it might not be necessary to enact a health care takeover bill that channels vast sums to favored interest groups, and then where would our politicians be?

It's a Dog's Life (You Wish!)

Classical Values points out that a dog can get better and cheaper care than a person. He muses:

While I realize technology has added many tools to the medical arsenal since the 1940s, the same tools have been added to the veterinary arsenal, so that can't be all there is to it. I have not seen any vet bills from the 1940s, but I am sure that a cursory examination would reveal that the rate of increase has risen in a normal manner that we would expect, while the rate of increase for human medical care has skyrocketed.

A presentation by Dr. Arthur Robinson explains at least some of the difference:

My youngest son Matthew has a dog named Rusty. When Matthew takes Rusty to the veterinarian, the vet can take a blood sample from Rusty, put it in a computer peripheral beside his PC, which costs $1,000, get the analysis in a few minutes, diagnose Rusty, and go on about his business. It measures the same couple of dozen things that would be measured if you went to a physician. Some veterinarians, in fact, send their samples to the local hospital and put them through the same medical devices used for humans.

In any case, the veterinarian can do this for Rusty, but he can’t do this for Matthew. If he measured Matthew’s sample, that would be unlawful. And, if a physician had this device in his office, he also couldn’t use it. That also would be unlawful. The only people allowed to use these devices are working in approved commercial clinical laboratories, and most of those laboratories would not measure a sample if Matthew asked them to do it. But, there is an out. Matthew can measure his own sample. If he does it himself, it is lawful.

Robinson thinks:

Something needs to be done in medicine and the entrepreneurs and technologists of the Telecosm are the exact people to do it.  It involves moving diagnostic medicine into the hands of the consumers—taking the diagnostic and technological tools of medicine and making computer peripherals out of them, as well as making on-person monitors and turning the Internet into an interpretive tool, so that the consumers of medicine can evaluate the product that they receive and medicine itself could be turned into a therapeutic industry competing on the basis of quality and price.

An audio of his whole presentation is here.

Connections - Broadband & Health Care

A number of posts here have emphasized the importance of policies that promote (or at least avoid deterring) health care innovation. 

CLI's interests extend far beyond health care -- to areas of broadband and telecom, intellectual property, software, innovation (collaborative and proprietary). And one of our fundamental points is that all of these interests are connected.

See, for example, this note by Anoop Gupta, Microsoft VP for Technology Policy & Strategy, on Moving a National Broadband Plan Forward:

Today, broadband is foundational for driving innovation and productivity across all economic sectors, including energy, education, healthcare, and e-government.

For example, at Microsoft we envision a connected health ecosystem that enables predictive, preventive, and personalized care. Telehealth technologies can be used to remotely monitor patients, facilitate collaboration between medical professionals, exchange medical data and images, and instantaneously provide efficient emergency service to remote areas. We see medical research increasingly benefiting from the HUGE amounts of patient and genomics data for drug discovery and personalized medicine.

He links to a letter recording a tele-meeting with FCC Chairman Genechowski and CEOs John Chambers (Cisco); Steve Ballmer (Microsoft); Jeffrey lmmelt (GE); and Steve Hemsley (UnitedHeath) at which the sectoral breadth of the broadband plan was emphasized.

To talk of "broadband policy" is misleading. You can't think effectively about broadband policy as a pure abstraction. You also need to think health care policy, education, and energy.

It works in reverse, too, in that thinking about these substantive areas requires consideration of the capabilities of broadband.

The FCC, in developing a broadband policy, is also developing health care policy, and energy policy,a nd so on. Example: Net neutrality, in its strong form of uniform treatment of all bits, whether related to the latest P2P piracy or on-line surgery, would do a lot to prevent innovation in medical services.

Do Not Make Health Care Into a Zero-Sum Game

A WSJ column today by Brit Rupert Darwell makes a crucial point about "what might be termed the 'lump of health care' fallacy," in which "health-care resources are assumed to be fixed, [so] those resources should be prioritized for those who can benefit most from medical treatment." In contrast:

[I]n a market-based system triggering one person's contractual rights to health care does not invalidate someone else's health policy. Instead, increased demand for health care incentivizes new drugs, new therapies and better ways of delivering health care. Government-administered systems are so slow and clumsy that they turn the lump of health-care fallacy into a reality.

Exactly. Government health care makes us all into political pleaders rather than customers. The health care budget is set irrespective of demand by the public as consumers, and various disease-related interest groups then lobby to get bigger shares of this politically-determined pie.

One likely outcome -- suppression of innovation. New treatments are usually expensive because they lack a broad base over which to spread the costs, and research is certainly expensive, so innovation looks bad from the stand-point of short-term, static cost-benefit analysis.

There is a bit of karmic justice here. Seniors (a group of which I am a reluctant member) have asserted that they have a "right" to have their health care subsidized by the rest of society, so they voluntarily gave up their autonomy as customers in favor of their electoral clout. It's a good scam, but eventually the burden becomes too great and there is indeed a backlash against us greedy geezers.

The moral: it is better to be a customer rather than a supplicant.