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With travel, the trip to Highland took a spectacular 9 hours all together (I’d never been there, and two successive bus drivers forgot to tell me where the stop was).

With travel, the trip to Highland took a spectacular 9 hours all together (I’d never been there, and two successive bus drivers forgot to tell me where the stop was).

And until we’re able to SEE the damned rates for what they are, controlled for who they target, we can’t do anything to course correct.That’s why its useful. Spread the love Categories: Uncategorized Tagged as: Policy, Uncategorized “,””,””,””,””,””,””,””,””,”” “”,”200″,”OK”,” Xerox PARC — Silicon Valley’s most famous research center. The place where the HomeBrew Computer club used to meet. The place from which good ideas were “appropriated” and become the core of minor companies like Apple, 3Com and later Microsoft.  The place of the legendary Thursday afternoon lectures, and yup, now it’s risen to its all time height (or hype) and it’s hosting me! So if you want to hear me talk, it’s happening at 4pm on Thursday 25 May, free and open to the public. I’ll be talking about health care, IT, Doctors, bribery and corruption….the stuff you know and love Directions here HEALTHCARE UNBOUND! A Visionary Conference & Exhibition on Remote Monitoring, Home Telehealth and Pervasive Computing. July 17-18, 2006, Cambridge, MA. For full details, please visit: Spread the love Categories: Uncategorized Tagged as: Policy/Politics, Startups “,””,””,””,””,””,””,””,””,”” “”,”200″,”OK”,” In an study in the news yesterday Bain, the big management consulting firm, said that the cost of bringing a drug to market was $1.7bn.  I’ve heard the $7-800m number many times before and scoffed but this one made me do some basic math.  The CMS (a newly pharma-friendly organization) put out a report this year that suggested that R&D for pharma would be $30 billion (see chart on page 13), although the same report suggested that R&D spending was 13% of revenues of branded drugs revenues of $130bn. So that actually indicates that the number was $17bn.

  But let’s go with the $30 billion number and assume that it’s constant over a ten year period (which it hasn’t been).  When I last looked at this about 2 years ago there were about 500 drugs with over $10m sales in the US, and who knows how many more worldwide. In the US according to this list of the top 200 prescribed drugs some 80 odd (or 40%) were generic. So assuming that to be true for the top 500 drugs, means that there are 300 branded drugs.  Assume further that in a 10 year period there’s turnover of 80% of the branded drugs (and it’s probably faster than that), the back of the envelope calculation is that some 500 drugs of any reasonable size come onto the market every decade.reduslim su amazon Yet at its most generous assessment, R&D spending is only $300bn in decade–leading me to guesstimate that the cost of R&D per product is, at the outside, in the $5-600m range, not more than 3 times that. Now Bain is playing both sides of this.  It’s acting on behalf of its pharma clients to keep their line about the costs of R&D in the press, but it’s also interested in frightening them into serious restructuring to combat their lack of revenue from new blockbusters and to get them to spend consulting dollars on the development of new business models.  But if you thought these numbers had me perplexed, my anonymous pharma veteran who is an occasional contributer to THCB is foaming at the mouth about it: What the hell; let’s do a study to show that it actually costs $2 Billion to bring each new drug to market.

  Stick in all fixed costs  (maintenance, landscaping, inspections, property taxes, perquisites for senior management, depreciation, anything else we can think of.)  Yes, let’s show that Big Pharma is in a real pickle and they should get a federal bailout.  Highest return on equity of any industry? On sales?  Guys like Ray Gilmartin sitting around with $90 Million in unexercised options and Hank McKinnell getting $40 Million a year?  Nah, none of that matters.  Blame the foreigners (Old Europe, the Canucks, everyone else) for not allowing unconscionable profits the way we do.  Blame the retirees for not adequately planning for themselves, blame baby boomers for being too short sighted.  Hell, if none of that sticks, then just grease the politicians and make sure we get a bunch in there who can do business on a bought-and-paid-for basis.  It’s just like the advocates and opinion leaders we’re always buying off, only this will be easier because there’s no goddamned competitor with enough hash to pay them to go the other way. And then he calms down, somewhat Oops, sorry, that was my Texas alter ego that got out of the cage.  I just stuffed him back in there, together with some crony capitalists, militarists, jingoists and religious fundamentalists. But his hyperbole does have a point.

  I recently completed a study for a Big Pharma client who gave me the actual dollar costs to develop two, recently launched products.  Take the smaller of the two spurious figures (i.e., $800 Million), divide it by 20 and you’ll be in touch with reality.  Looking at the range of drug development costs, these products were on the low side because they’re in a category where Phase III trials enroll between several hundred and 3,000 patients.  If you go to something such as hypertension where trials often enroll upwards of 15,000 patients, costs will be higher but still within the $200 million range and not the billion dollar level.  Only by throwing in the kitchen sink and dividing all R&D costs by the number of new products do the whores at Tufts get to $800 billion.  The other whores at Bain throw in the toilet and shower as well by including costs for marketing, sales, bribery and what not. Now the pharma veteran’s alter ego has flown off the handle somewhat, and he may not be including the costs of failed drugs in his calculations (although there aren’t that many highly expensive failures).

But let’s remember what this is all about.  It’s about convincing the WTO and the US trade negotiators that price setting by foreign governments is a restraint on trade, and that far from Canadian prices coming here, ours should go to Canada, and Europe and Japan, etc! This is not a joke.  Said the man from Merck (Ian Spatz, VP for public policy), “”This is all going on in this larger context of growing unrest in the United States that other countries are not paying their share of the cost of pharmaceutical research.””  And PhRMA is starting with Australia. The poor Aussies, who sent soldiers to Iraq over the objections of the vast majority of their citizens in order to get a free trade deal that would enable their agricultural goods to get onto US dinner tables, did not see this one coming! But if big PhRMA manages to convince us all that those costs are real, why wouldn’t they at least try to take them to the rest of the world? You may have thought that “”growing unrest”” over drug pricing here was all about American seniors taking the bus to Canada to buy drugs cheap. PhRMA thinks instead that we’re all upset about subsidizing the Canadians, and if we’re not we should be! After all the best defense is a good, pre-emptive, offense! Spread the love Categories: Uncategorized Tagged as: Pharma, Uncategorized “,””,””,””,””,””,””,””,””,”” “”,”200″,”OK”,” Every so often it’s worth remembering the human and economic costs behind our uninsurance statistics. The following TCHB contributor was employed and insured until about a year ago, but like many with her health condition cannot afford insurance now she’s uninsured.

I’ve kept the author anonymous for obvious reasons, although she lives in the San Francisco East Bay, but read on and you’ll understand why there are economic costs for all of us from the uninsurance numbers: I recently had my own health care crisis, and I thought I’d share it with you as something to ponder. I don’t have any context to put it in, so I will leave larger analysis to you. My basic reaction, though, is that as relieved as I am that I had access to good care, the whole process was utterly stupid from the taxpayer point of view. A few weeks ago I had a large hemorrhage in one eye. This is a harmless condition for most people, but I was worried because I have an underlying genetic condition that causes a form of macular degeneration, and I was worried about hemorrhaging that I couldn’t see in the area of my retina. If this was the case,time was of the essence if I didn’t want to lose a chunk of my vision. It was 2am when I discovered the problem. I’m uninsured, but I knew that an ER would have to treat me. I walked to Alta Bates in Berkeley. As a pathetic side note, I went to the wrong Alta Bates campus – I then had to walk to the Alta Bates with the ER (on Ashby). By the time I got there, I had a lot of pain in my legs (the same genetic condition causes claudication), and I had trouble explaining to the nurse that while I was limping and in tears, this was normal for me and was not why I needed to see a doctor. 🙂 The only reason I’m relating this is that I don’t think many people think about how poor people go through to actually get to the ER in the middle of the night in the first place. I was treated very well as a person at Alta Bates.

They didn’t make me feel uncomfortable about my lack of insurance at all. They gave me charity forms to fill out. I waited 5 hours to be seen, which turned out to be normal for both Alta Bates and Highland. The initial doctor I saw at Alta Bates did not give me adequate care. She glanced at my eye and told me there was nothing to worry about with that sort of hemorrhage. Since I provided information on my underlying condition up front, she should have given me a thorough eye exam.

This visit cost the taxpayer $356.00 for the ER plus whatever the physician fee is (probably around $200.00). I know enough to test my eyes myself, so the next day I tested myself. My vision was distorted. I tested over and over again just to make sure: I certainly didn’t want to go through the ER experience again. But the tests were always the same, so I went back to the ER. That’s a second $356.00 (possibly more for ophthalmology set up) plus the physician fee. This time Alta Bates gave me an urgent referral to Highland Hospital.

Highland has an ophthalmology clinic, and a program for indigent patients. Highland, however, didn’t want to take the referral. It was written on my aftercare instructions instead of the form they wanted. I called Alta Bates to ask for the right form, and they insisted I was holding the referral. I called back and forth all day. Alta Bates finally faxed the referral, and Highland said it would be at least three days before they could verify they even got the fax(!). This referral had urgent written on it because the Alta Bates physicians thought I needed to see a specialist fairly quickly. At one point I called Berkeley Free Clinic to see if I had any other county health system options for ophthalmology.

Highland unfortunately was the only place for me to go. An Alta Bates nurse then advised me to go back to Alta Bates, get a copy of my medical records, and go to Highland Urgent Care so a Highland physician could refer to the ophthalmologist. That’s right: my THIRD 5-hour emergency room visit for the same problem. The taxpayer was unnecessarily triple-billed because of some bureaucratic issue. With travel, the trip to Highland took a spectacular 9 hours all together (I’d never been there, and two successive bus drivers forgot to tell me where the stop was). Once again, I have no complaint about my treatment as a human being. I described my situation, and the insurance person didn’t bat an eye. She just gave me the forms to fill out. I was also very well treated by the triage nurse at Highland. After I told her about the problem with the referral, she physically tried to run after the on-call ophthalmologist. I almost lucked into seeing him right then and there, but he had to go into surgery. He did however give the triage nurse an appointment for me on the spot.

A morning later, I took another trip to Highland. The wait in the ophthalmology clinic was down to an hour. The ophalmologist gave me some tests, took a look at the area of my eye that was the source of distortion, and confirmed it wasn’t actively bleeding. (Keep in mind that I had gone through the past few days under continual fear that I might be losing my sight minute by minute). So, big relief. He thought the distortion was being caused by blood vessels and/or related scarring. It might have actually been there for months: I just never noticed it without the tandem visible hemorrhage. As a member of the uninsured, I had not had access to regular ophthalmology checks that are really necessary for someone in my condition. Perhaps an economic analyst like yourself might realize that the public issue here is that denying me health care in the first place (especially in a frivolous “specialty”) means that the taxpayer gets to pay long term when I’m permanently disabled. While I wasn’t in an acute situation, my vision was still damaged. The ophthalmologist referred me to a retinal specialist at Summit.

This retinal specialist was supposed to give me an angiogram to show whether blood vessels were the issue, and whether my vision could be helped or at least prevented from deteriorating by laser surgery. The good news for me as an indigent patient is that I was sent to the same retinal specialist that anyone else would go to. The bad news for the tax payer is yet another weird system disconnect occurred. I went to the retinal specialist, but I didn’t get the angiogram. I got the exact same eye exam I got from the ophthalmologist instead. Afterward, the retinal specialist gave me a rerun of the angiogram and laser surgery talk.

He needed to schedule me for another appointment for those. The appointments system was down so the nurse was supposed to call me. My phone is sketchy, so I gave my email as well. It’s been a few days, and I haven’t been contacted by either phone or email. I plan to call after I finish this note. So many things have been surreal about this entire situation.

I was honestly surprised that the people dealing with the insurance forms were all non-judgmental and dealt with me in private. This would not have been the case in my home state of Virginia, where the economy is regulated through shame. 🙂 On the other hand, the actual medical care varied, and it required a lot of proactive work on my part (to negotiate between Alta Bates and Highland). This was difficult for a fairly well-educated and strong person like myself: I wonder what happens to people who are more docile or more acculturated to conditions of poverty. I thought that the first doctor in the Alta Bates ER should have taken a closer look at me, but all the other doctors I saw were great. It was also stressful to go through all the bureaucratic hassles at a time when it was possible that every minute could be costing me more of my sight.

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