Happy Holidays!

How to Fight Climate Change Without Soaking the Middle Class

The following commentary by Peter Barnes, a co-founder of Working Assets, is reprinted from the On The Commons website.

Fighting climate change is going to cost all of us money. That’s because the price of dumping carbon into the atmosphere must, necessarily, rise. Whether the price rise is prompted by a tax or a cap makes no difference — we will all pay more.

This politically inconvenient truth has long been trumpeted by the coal industry. Environmentalists, for just as long, have glossed over it. But numbers are now coming in from reputable quarters, and they’re big enough to send a message to policy makers: don’t deny the problem, solve it.

Last month, the director of the Congressional Budget Office, Peter Orszag, told Congress [1]that the average American household would pay $1,160 a year in higher prices when carbon dioxide emissions are cut 15 percent. A new report by James Boyce and Matt Riddle [2] of the University of Massachusetts, Amherst, says the CBO’s numbers are low: the average family will pay $1,570 a year in higher prices when emissions are cut by just 7 percent.

That, of course, is only the start. As emission cuts rise toward the ultimate goal of 80 percent, our disposable incomes will take a sizeable hit.

Hardest hit will be low-income families — higher prices for energy and energy-intensive goods will impose a larger burden, relative to income, on them than on the rich. But the middle class will also be soaked, and therein lies the political problem.

Any solution to climate change has to work for forty years or more. A policy that soaks the middle class won’t last longer than a few election cycles. The middle class must be protected. The question is how.

A few ideas are floating about. One is to give tax rebates that offset higher energy prices. Al Gore, for example, proposed in his Nobel acceptance speech that payroll tax refunds be given to every U.S. worker who pays them.

That’s a good start, but it leaves out too many people who are poor and middle class. Nearly half of households in the bottom fifth would receive no payroll tax rebates because they have no taxable wages. Also excluded would be retirees, students, stay-at-home parents and workers outside the formal economy.

The simplest and fairest way to protect the poor and middle class is to give equal rebates to everyone. The money would come from either a carbon tax, or an auction of carbon emission permits.

Boyce and Riddle support a plan called Cap and Dividend. Just as every Alaska resident receives an equal dividend from revenue from state oil leases, so every American would get an equal dividend from carbon permit auctions. The dividends would be wired monthly into people’s bank accounts, much like Social Security payments. They’d help families pay their monthly bills.

There are several nice features of such a plan. One is that it’s automatic — as energy prices rise, so do dividends. Another is that how you fare depends on what you do. The more energy you use, the more you pay. Since everyone gets the same amount back, you gain if you conserve and lose if you guzzle. This is fair to everyone, whether rich or poor. And it takes politicians off the hook for rising energy prices. If voters complain, politicians can truthfully say, “The market sets prices, and you determine by your own energy use whether you gain or lose. If you conserve, you come out ahead.”

A further appeal of Cap and Dividend is that it’s progressive in its economic impact. Even though higher energy prices hit the poor the hardest, the poor actually gain when dividends are added in. What’s more, much of the middle class gains as well. Indeed, according to Boyce and Riddle, more than 60 percent of Americans would come out ahead.

There’s also an attractive premise behind Cap and Dividend: the atmosphere is a commons that belongs to everyone. Those who pollute the commons should pay to do so. And the income should go to the commons’ owners, one person, one share.

If I were a Presidential candidate, I’d latch on to Cap and Dividend in a flash. After all, what’s not to like? With Cap and Dividend, we’d limit carbon emissions, spur private investment in clean energy, create jobs, and send money to everybody. Who wouldn’t vote for that?

What Happens When Drugs Become Supplements

Two items from yesterday's news:

* Unpublished studies on the Food and Drug Administration's website show Merck and Schering-Plough's combo cholesterol-lowering pill -- Zetia -- poses liver risks, the New York Times reports.

* A former Pfizer physician has sued the company for off-label marketing of Lipitor, the world's best-selling cholesterol-lowering drug, the Wall Street Journal reports.

The Journal's Health Blog gives reporter David Armstrong an outlet for fascinating details from the wining and dining that took place. He accompanied whistleblower Jesse Polansky, who now works for the Center for Medicare and Medicaid Services, to several "educational events" where the allegedly illegal off-label promotion of Lipitor took place. The physician presenters at the events suggested the drug was useful for patients with chronic kidney disease, which is not an approved indication under the National Institute of Health's National Cholesterol Education Program (NCEP) guidelines.

A few years ago, I helped organize more than 30 prominent physicians to protest the guidelines because 1) they were written by a group of physicians who with one exception were all on Big Pharma's payroll as consultants; and 2) they expanded use of the drug into populations for which there was no medical evidence that there would be any benefit.

Today, there are millions of these "moderate risk" patients -- people with slightly elevated cholesterol levels but no other risk factors for heart disease -- taking Lipitor and other statins. The evidence that it lowers their risk of heart attack is weak to nonexistent, depending on which subgroup of patients you look at.

Polansky is trying to drag this medically wasteful -- and potentially dangerous, since there is a small but well-established risk of muscle pain and wasting (rhabdomyolysis) -- into the open. It's a shame that CMS and its government lawyers did not back the suit. Many of those millions are on Medicare and Medicaid, and taxpayers pick up the tab for a lot of that waste.

Eye Docs Gain Access to Avastin

What's behind Genentech's decision yesterday to allow opthalmologists to directly order Avastin, the anti-cancer drug that also blocks excess blood vessel formation in aging eyes? The company in October announced that as of January it would stop selling the biotech drug to compounding pharmacies, where the eye docs could get the small doses needed for treating macular degeneration.

I suspect the company realized that it couldn't lose the good will of the eye doctors, who also use Genentech's Lucentis to treat the condition. Most physicians believe there isn't a dime's worth of difference between the two drugs since they both work on the same cellular process and have both produced very good results (we won't know officially that Avastin works just as well as Lucentis until a National Institutes of Health-funded comparison trial is completed in several years).

However, Lucentis costs $2,000 a shot compared to just $40 or $50 a shot for Avastin, which is usually packaged in large vials suitable for cancer treatments. Break down those large vials at a compounding pharmacy and, voila, it's dirt cheap (which proves that the actual cost of producing these biotech wonder drugs is very low).

When a well-insured patient (read low co-pays) walks into an opthalmologist's office, they get Lucentis. But for many poor patients, those on fixed incomes or those with high deductibles and co-pays, the physician is likely to go for the cheaper alternative. If the company followed through on its plans to remove that alternative, it is likely that we would have seen a gray market for Avastin emerge, with local opthalmologists cutting deals with local oncologists to get small doses of the drug. Genentech must have figured it is better to get a few hundred million in sales from the well-insured than turn cancer and eye doctors into surreptitious gray marketers.

Top Clinton Staffer to Run Malaria No More

Thanks to The Washington Note for letting us know that Sen. Hillary Clinton's top legislative aide, Laurie Rubiner, is heading off to run Malaria No More, a well-funded advocacy group pushing rich countries to do more to combat malaria in the developing world.

Rubiner was instrumental in coming up with Clinton's health care plan. A recent New York Times profile quoted her saying:

“Senator Clinton is 150 percent committed to universal health care coverage, and so am I,” she said. “There’s nothing wrong with our health care in this country; the problem is with the health care system. Insurance companies shouldn’t be competing against each other based on their ability to screen out those who need coverage the most. Right now the deck is stacked against the average consumer.”

Frankly, I think there's a lot wrong with U.S. health care, and Clinton's plan admits as much with its heavy emphasis on prevention and her strong support for comparative effectiveness studies and their use, which, as we learned yesterday from the Commonwealth Fund, could save the health care system $368 billion over the next ten years -- a third of what it would take to pay for the uninsured.

It will be interesting to watch this Malaria No More group. Its website noticeably lacks the endorsement of the World Health Organization, its main effort, the Roll Back Malaria initiative, or the World Bank, which has been tasked to come up with a subsidy program for getting low-cost drugs for combating malaria to the developing world.

This year, according to its website, Malaria No More focused a lot of attention on the President's Malaria Initiative (one of the few laudable things done by this administration) and Laura Bush's promotional travels in Africa to boost the government program. The First Husband in Waiting has also made global health a primary focus of his Clinton Global Initiative.

The Crisis in Zimbabwe, and Elsewhere

Doctors Without Borders, the global humanitarian physicians' group, this morning released its top ten underreported stories for 2007. Heading the list is the ongoing civil strife in Somalia, where hundreds of thousands of people have been displaced from the capital of Mogadishu as government forces, backed by Ethiopia and the U.S., clash with Islamic rebels.

On the health care front, the growing health care crisis in Zimbabwe, once one of the richest countries in southern Africa, goes all but ignored. Here's what they have to say about conditions there:

Rampant unemployment, skyrocketing inflation, food shortages, and political instability continued to wrack Zimbabwe in 2007. Up to 3 million people are believed to have fled to neighboring countries in recent years among a population of 12 million.

The national health-care system, once viewed as one of the strongest in southern Africa, now threatens to collapse under the weight of this political and economic turmoil with the most acute consequences potentially for the estimated 1.8 million Zimbabweans living with HIV/AIDS. Currently, less than one-fourth of the people in urgent need of life-extending antiretroviral (ARV) treatment receive it. This translates into an average of 3,000 deaths every week. And the prospects for a further scale up of the national AIDS program are dim.

Trained medical professionals are leaving the country, the government program for HIV/AIDS treatment is oversubscribed, and the lack of ARV supplies has stifled further expansion. Patients often face obstacles to reach hospitals or clinics because of high fuel and transport prices.

Through programs in Bulawayo, Tshlotsho, Gweru, Epworth, and various locations in Manicaland province, MSF provides free medical care to 33,000 people living with HIV/AIDS, 12,000 of whom are receiving ARV treatment—nearly one tenth of all people on treatment. However, MSF's ability to care for more people in need is hindered by the lack of trained health workers, restrictions on which staff can prescribe ARV drugs, and stricter administrative requirements for international staff to work in the country.

At the same time, Zimbabweans are feeling the health impact of degraded or nonexistent water-and-sanitation systems. During the year, outbreaks of diarrhea affected people living in the capital, Harare, and Bulawayo, the second largest city. Fleeing the country is also a dangerous enterprise as evidenced by the reports of refugees being beaten and raped along the South African border, and those who do make it across may be destined to live in the shadows with little or no access to health care.

If you're still looking for a place where you can make a charitable contribution this holiday season, you might want to click on the Doctors Without Borders website and follow their easy instructions.

Wennberg's Day in the Sun

Jack Wennberg of Dartmouth, who has spent the past 30 years documenting the disparate levels of health care spending in the U.S. with no difference in outcomes, is all over the news today. In his laudatory article today about Shannon Brownlee's new book, "Overtreated," New York Times economics columnist David Leonhardt focuses on his work, which she uses extensively in the book. And so does this column by Jim Jaffe in the Baltimore Sun.

If you haven't thought much about the reasons why Medicare spends more than $9000 per senior citizen in Florida and just a third of that in New Mexico or Oregon, please read these articles, and then buy Shannon's book. You'll understand a lot better why health care costs in the U.S. consistently rise without better outcomes, and you'll think twice about the co-pay you have to pay the next time your physician orders that pricey procedure or test.

Congress to Earth: Bah Humbug!

Congress is patting itself on the back this morning for passing an energy bill that raises the fuel efficiency standards for cars and trucks (long overdue), and sharply increases the amount of ethanol that fuels them (pleases a special interest -- corn producers).

Meanwhile, to satisfy the president from Big Oil, it couldn't summon the votes to strip $9 billion a year in unwarranted tax breaks from ExxonMobil and its buddies and give the subsidy to solar and wind manufacturers. It also refused to mandate that the nation's electric utilities produce 15 percent of their electricity from renewal sources within a decade.

Here's the card that should accompany the legislation as Congress sends it over to the White House for the president's signature:

Dear President Bush,

Hope your campaign supporters in the oil and utility industries and the corn lobby have a very merry Xmas and a happy new year! Make sure to invite them to the signing ceremony -- and the lobbyists, too.

Warmly,
Congress

P.S. See you in the Sunbelt over the holidays. We know where to go to get some solar (ha ha).

Health Savings Opportunities

The Commonwealth Fund released a new study today that puts a price tag on health care cost savings opportunities. Where lies the greatest chance of saving money while improving health care outcomes, according to the study? Comparing different treatments for disease, and focusing physician incentives on using the most cost-effective means. It could save payers $368 billion over ten years.

Other areas highlighted:

Strengthen Primary Care and Care Coordination: saves $194 billion over 10 years if all Medicare fee-for-service beneficiaries were enrolled. "Estimated national savings would be larger if this approach were adopted by all payers," the study said.

Public Health measures like reducing tobacco use through increasing federal taxes by $2 per pack of cigarettes: saves $191 billion savings over 10 years, shared by all payers.

Promoting Health Information Technology: saves $88 billion over ten years.

Isn't it interesting that the much ballyhooed Health IT produces the least savings among those items highlighted in the press release (there's about 15 technologies analyzed in the full report)? As an individual who'd like to have personal access to his own medical records, I'm all for computerized medical records. It will substantially reduce medical errors, too. But as a cost saver for the overall system, it pales besides more significant health care reforms like comparative effectiveness research tied to incentives for adoption, and strengthening our primary care system.

The Commonwealth Fund deserves a pat on the back for financing this important study. It gives reformers solid information to argue in favor of these crucial reforms in the years ahead.

Beyond the Donut Hole: Who's Watching?

The famous donut hole in the Medicare prescription drug benefit -- where seniors have to pick up 100 percent of costs once total expenses go beyond $2,400 a year until it hits $3,850 -- was a major bone of contention when the bill passed in 2003. So you'd think the Center for Medicare and Medicaid Services would keep a close eye on how many seniors are falling into the donut hole so they can make sure they get picked up once their drug costs go above the $3,850 mark.

As they like to say in New York: fuhgeddaboudit. A new report from Health and Human Services department Inspector General Daniel Levinson shows that nearly a third of insurance companies selling drug benefit plans to seniors have not bothered to report to CMS how many seniors have fallen into the donut hole. The law required the reports.

And what is CMS doing aobut it? The agency said it had received "few complaints" from beneficiaries about companies failing to accurately calculate their out-of-pocket costs, but it would work to improve its reporting system for drug companies.

Bottom line: Seniors should closely track of their own bills to make sure their insurance companies start paying the catastrophic benefit when they reach $3,850. It's either that or rely on your insurance company, since this government isn't paying attention.

Unintended Consequences?

Major donors have lavished attention on the "big three" health care epidemics plaguing the developing world: HIV/AIDS, tuberculosis and malaria. But is this emphasis detracting from helping poor countries develop their basic health infrastructure? An investigation in the Sunday Los Angeles Times says yes. The story quotes several prominent physician-activists like Paul Farmer of Partners in Health criticizing the tunnel-vision approach of the Global Fund to Fight Aids, Tubeculosis and Malaria and the Bill and Melinda Gates Foundation.

The article has generated a heated debate in the posted on-line comments, with many thoughtful comments on both sides of the argument.

Medicare Advantage Strikes Out

If Democrats on the Hill needed more ammunition to give them the gumption to cut Medicare Advantage payments, the New York Times provides it this morning with a damning story about unscrupulous insurance agents pulling vulnerable seniors out of traditional Medicare and putting them in private health maintenance organizations. The story features insurance agents forcing their ways into seniors' homes; lying about "being from Medicare"; and sticking poor seniors with high co-pays that had previously been paid by Medicaid.

Medicare Advantage gets about 12 percent more than the average Medicare payment for each enrollee. The agents get hundreds of dollars off the top for every person they enroll. The insurance companies add an extra layer of administration and profits to the nation's total health care bill. The evidence overwhelmingly points to Congress eliminating the extra money paid to the insurance industry for selling these plans. If the plans don't save traditional Medicare money, there is absolutely no reason for Medicare (dis)Advantage to exist.

The Pharmaceutical Innovation Conundrum

Breathless reports highlighting the latest medical breakthroughs are a staple of the media landscape, but they mask a darker reality. Pharmaceutical innovation is on the decline. Large sums poured into medical research by the private and public sectors have not produced the promised payoff. The number of important new drugs and biologics introduced into medical practice has dropped precipitously in recent years and has been on a downward trend for over a decade.

The cause of this slowdown has been the subject of much speculation and research, befitting its status as a chronic disease. Despite numerous diagnoses, the sickness still lacks an effective cure.

How bad is it? Between 1993 and 2004, drug industry expenditures on R&D increased 147 percent in inflation-adjusted dollars, from $16 billion to nearly $40 billion. U.S. government R&D over the same period, primarily from the National Institutes of Health, doubled to nearly $30 billion. Yet new drug applications submitted by pharmaceutical and biotechnology firms to the Food and Drug Administration increased just 38 percent. The number of applications for significant new drugs – those that hold out the great therapeutic promise, increased just 7 percent. And new approvals for unique therapeutic molecules or biologics, the ultimate bottom line for drug discoverers, have declined from a peak of about 40 new drugs per year in the mid-1990s to about 20 per year in this decade.

And there’s no sign of a turnaround. Through the first ten months of 2007, the Food and Drug Administration approved just 14 new molecular entities (a newly invented drug never before approved for use in humans) and just one new biologic. And only seven of those drugs were considered a significant advance over previously invented drugs, making 2007 the worst year in pharmaceutical innovation since Congress passed the Prescription Drug User Fee Act of 1992, which was designed to expedite the pace of new drug approvals.

In 2006, the Government Accountability Office sought an explanation for the declining productivity of pharmaceutical industry research and development. The agency convened a panel of scientific experts to ponder the reasons for rising inputs and declining output. Economic theory suggests that higher investment in R&D should produce higher levels of innovation. And while a mature industry might expect a declining rate of return for each additional dollar invested in new technology development, the absolute decline in research productivity by an industry considered one of the crown jewels of American high technology was simply unprecedented.

Add to this the fact that the pharmaceutical and biotechnology industries have been showered significant government support in the form of direct public investment, tax credits, reduced regulatory burdens and a laissez-faire government attitude toward the industry charging exorbitantly high prices in the largest market in the world, and the government’s auditors recognized something beyond the industry’s traditional lament – “R&D is growing more costly; it now costs (fill in the blank: first it was $500 million; then $800 million; now $1.2 billion) to develop a new drug” – was called for. It has become painfully apparent that throwing more money at the industry in the form of higher prices isn’t going to solve it lackluster performance in coming up with new and innovative therapeutics.

The government analysts highlighted some of the more significant factors, but missed the core of the dilemma. They, like many drug industry supporters, identified the issues of prices, investment, regulation, and risk – core concepts in economics – as the drivers of innovation. They placed too little emphasis on science and public health, which, in my view, have always been and remain the wellspring of medical progress.

Lost in Translation

Every analyst seeking an answer to the declining medical innovation conundrum recognizes the crucial role that scientific understanding plays in coming up with new therapeutic approaches to chronic disease. In its report last year on the declining output of drug industry research and development, the Government Accountability Office noted that the public and private sectors have done a poor job in translating the nation’s massive public investment in basic science and private sector investment in translational science into new therapies.

Think about the remarkable “breakthroughs” of recent years. University and government scientists have mapped the genome, identified key receptors on numerous cancers, and uncovered parts of the biological cascade behind chronic conditions like arthritis, Alzheimer’s and arteriosclerosis. Industry scientists have developed extraordinary tools for discovering new drugs like mass screening of new molecules using computer-chip bioassays and rational drug design based on x-ray crystallography.

There’s growing public investment in new fields like gene therapy and stem cell research, which hold out the promise of curing genetic disorders and degenerative diseases like Parkinson’s and diabetes. Barely a week goes by where a news magazine or the nation’s leading papers do not herald the alluring promise of some new biomedical breakthrough percolating in some company’s lab for one of the many forms of heart disease, one of the more than 200 forms of cancer, one of the numerous neurological disorders, or one of the musculoskeletal disorders that contribute to the frailty and infirmities of old age.

Yet years go by without significant advances against any of these chronic diseases, which are the primary causes of ill-health in an aging society. Something clearly is amiss, the report concluded, in translating basic science into usable products.

The report then critiqued the drug industry’s corporate culture, framed by the demands of Wall Street. The financial incentives formed by the stock market force R&D decision-makers to focus most of their attention on developing blockbuster drugs for proven mass markets. Minor aches and pains, allergies, depression, cholesterol management, acid indigestion – the rewards for a successful new entry in one of these categories, whether or not it represents a significant new advance over previous therapies, are measured in the billions of dollars in sales.

However, the cost of developing new drugs in these categories is high and major contributor to growing R&D costs since showing superiority to placebo for these products often requires clinical trials that enroll thousands if not tens of thousands of patients. Why? Since the drug itself has marginal utility, consumers, regulators and the companies themselves require larger trials to allay concerns that the new, unproven product may be less safe than readily available, proven alternatives. The additional expense of the larger trials inevitably inflates research costs and deflects scientific talent from investigating fields where the risk of failure is far greater.

To be sure, there are some areas where the evolution of scientific understanding has reached the point where successful therapeutic intervention is not only possible, but the likelihood of success is high. Yet industry ignores or under-invests in these areas because they only affect a few thousand or tens of thousands of people. The National Organization for Rare Diseases maintains a database that tracks more than 1,000 diseases, most of which receive scant attention from commercial drug developers. Yet the Pharmaceutical Research and Manufacturers Association – the trade group for the U.S.-based pharmaceutical industry – reports only 300 drugs in development for these conditions.

The blockbuster mentality also leads to a proliferation of so-called me-too drugs, which replicate the action of drugs already on the market and add little or nothing to physicians’ armamentarium for fighting disease. Besides the wastefulness of this activity, it also contributes to the high cost of developing drugs. lt is conceivable, of course, for a company developing a new acid indigestion pill to improve on the 90 percent effectiveness of those already on the market. But it’s not likely. And it’s hard to imagine that the medical benefit would ever justify the cost of enrolling ten thousand or more patients in a clinical trial capable of showing superiority in a statistically significant way. Yet the tests go on. Why? The sad truth is that the upward spiral of drug development costs in recent years in intimately tied to the drug industry’s desperation to replace blockbuster drugs coming off patent with comparable drugs that may provide another 20 years of market exclusivity (and thus marketability), but not much else.

This trend, noted in the GAO report, led the auditors to conclude that the nation’s patent laws were one of areas in need of reform if industry was going to refocus its attention on medically significant products. A series of laws and court rulings have given manufacturers the right to obtain new patents for minor changes in chemical structure, changes in routes of administration, and new uses for old products. These patent extenders provide substantial financial rewards to firms that focus their research attention on extending the marketability of their existing products instead of focusing on the truly new and innovative – always an inherently risky proposition.

Finally, the GAO’s panel endorsed the views of those who partly attribute the slowdown in new drug approvals to regulatory uncertainty, lamenting the fact that the FDA does not have precise standards for measuring the safety or effectiveness of new drugs. Moreover, those standards are constantly shifting, they alleged. In this view, regulatory standards have become progressively tougher in recent years due to a number of high profile safety scandals that led to pulling popular drugs from the market like the fenfluramine/dexfenfluramine combination (1997), Propulsid (2000), Rezulin (2000), Baycol (2001), Vioxx (2004), and Trasylol (2007). With tougher standards have come fewer new drug approvals.

FDA officials vigorously rejects that charge. "I've been at the FDA for 15 years and we've never changed the standards for drug approval," John Jenkins, director of the FDA's Office of New Drugs, told the press when it became apparent that 2007 was shaping up as a very poor year for new drug approvals. Moreover, the rate of approvals has run roughly parallel with the rate of new drug applications, according to FDA statistics.

Blaming the Messenger

Contrary to popular belief, the regulatory environment for new drug development has grown less stringent over the past two decades, not more so. A succession of changes in food and drug laws plus new rules propagated by the FDA itself, which began when an alarmed HIV/AIDS patient community began clamoring for new drugs to treat that deadly disease, substantially liberalized the rules under which new drug development takes place.

The Prescription Drug User Fee Act of 1992 sharply reduced the amount of time that FDA reviewers may take to evaluate new drugs once all the data from confirmatory clinical trials have been submitted to the agency. Regulations put in place the same year allowed new drug applicants to measure surrogate markers, not clinical endpoints, to get new drugs approved.

For instance, patients with AIDS saw their white blood cell counts dwindle to near zero. The agency began approving drugs based on a temporary improvement in those white blood cell counts, even though it didn’t substantially increase the likelihood that patients suffering from the disease would survive. It was only when a number of marginally useful drugs were used in combination with each other that clinicians finally figured out how to control the disease in a way that actually saved lives.

The industry also won relaxation of the rules governing industry marketing with passage of the Food and Drug Modernization Act of 1997. Direct-to-consumer electronic advertising began flooding the airwaves. Policing of print advertising and detailing materials (the handouts and gifts used by salespersons who routinely visit physician offices) declined as the number of inspectors on the FDA payroll plummeted. The industry also won strengthened intellectual property protection in the form of extended patent life for conducting pediatric clinical trials or additional market exclusivity for drugs that treat rare diseases.

The FDA Amendments Act of 2007, signed by President Bush in October, passed in large part because of the Vioxx scandal where an estimated 40,000 people died from heart attacks, strokes and other cardiovascular complications that were the unwanted side effect of a painkiller that was no better than many others already on the market. It was the first reversal of the deregulatory trend since the 1970s.

Opponents of the new law at first claimed its passage would slow the pace of innovation. This allowed industry lobbyists to succeed in eliminating most of its more stringent proposals, such as forbidding direct-to-consumer ads for the first three years a new drug is on the market. By the time it passed, even industry applauded the bill.

Why is there any reason to think that this modest bill will slow the pace of innovation, even if it had included the tougher measures?

If anything, history shows that the tougher the rules, the greater likelihood that industry will pursue innovative therapies. The number of new drugs and biologics approved by the agency fell consistently over the past 15 years, a period when the legal and regulatory environment was becoming substantially more hospitable to winning approval of new technologies.

On the other hand, the greatest tightening of standards in the history of drug regulation – the 1938 passage of the safety requirement and the 1962 passage of the efficacy requirement – ushered in eras of rapid medical progress and an explosion of new therapeutics as companies adapted to the higher, more scientific standards. It’s unlikely the 2007 law, which focuses primarily on post-marketing safety issues, will have a comparable positive effect. But there’s no reason to think its impact will be negative.

Clearly, something else is at work to slow the pace of innovation. And that something, in my view, is intimately related to the maturity of the drug industry, and its biotechnology offshoot. It’s been a little more than a century since the German histological chemist Paul Ehrlich developed the “magic bullet” theory of medicinal chemistry. He subsequently developed the first antibiotic for treating syphilis. Today, the FDA has more than 2,400 different approved drugs listed in its so-called Orange Book, covering nearly every imaginable disease (and some that are near to being imagined like restless legs syndrome).

A common ailment like hypertension, where there is a clear correlation between reducing its incidence and curbing heart disease, today has at least six classes of molecules and multiple molecules in each class competing for the large patient population requiring the medicines. In the anti-acid field (an age-old affliction; Alexander the Great is said to have died from a burst peptic ulcer after an all-nighter of binge drinking), acid binders like calcium carbonate (the active ingredient in Tums) begat H2 antagonists like Zantac (now over-the-counter), which begat proton pump inhibitors like Prilosec (now over-the-counter), which begat Nexium (the enantiomer half of the Prilosec racemate mixture, which means when you’re taking Prilosec, half of the pill is made up of the chemical in Nexium). Despite its lack of additional efficacy compared to the OTC medications that could be obtained at a fraction of its price, Nexium was the second best-selling drug in the world in 2006 with $6.7 billion in sales and a 16.9 percent annual growth rate.

A similar analysis could be conducted for many serious ailments like cancer, arthritis, diabetes and asthma. It’s not that these diseases have been cured by the pharmaceutical revolution. Many drugs that exist today only mask symptoms or provide very inadequate relief. Other drugs, such as many of the new antidepressants, are not much better than placebo in treating the disease. Many cancer drugs only extend life for a few months or years, and even then at a frightful cost in terms of caustic and sometimes harmful side effects. The need for better drugs is clear. But after a century of concerted research and development by tens of thousands of scientists and physicians working in the public and private sectors, the low-hanging fruit of medical progress has been picked.

The Challenges Ahead

Today, there are two great scientific challenges facing medical science.

In the advanced industrial world, the biggest challenge is discovering cures for the diseases that affect aging bodies like Alzheimer’s, cancer, Parkinson’s, diabetes, and crippling arthritis. In many of these fields, science hasn’t matured to the point where effective intervention is possible. There’s no guarantee that it ever will.

Because I wrote a book debunking industry’s claims about the cost of new drug development, I often get asked, “So, how much do you think it costs to develop a new drug?” I often begin my response this way: “Let’s start by calculating how much it costs to develop an effective Alzheimer’s drug.”

The answer to that hypothetical is an infinite amount of money. Why? Since there are no effective drugs for treating Alzheimer’s, to presume a cost based on historic calculations of drug development costs in other fields is to presume that scientists will succeed some day, which may not happen. After all, in the four decades since President Richard Nixon declared war on cancer, the government spent nearly $100 billion in current dollars (and the private sector additional billions more). Yet physicians still don’t have an effective treatment for many of the 200-plus forms of that disease.

The wild frontier of medical research today is personalized medicine. Much of the hope surrounding stem cell therapies is based on the idea that cells containing personal DNA and grown for a specific purpose are less likely to be rejected by the body. Cancer tumor analysis – breast cancer may be a half dozen different diseases – has created the new field of targeted drugs. And the fact that some drugs’ side effects only effect certain people is allowing scientists to think about evaluating individual genetic make-up so physicians can target medicines to those who will only experience their benefits, and not their risks.

But to the extent any of these personalized medicine strategies succeed, it will erode the drug industry’s blockbuster marketing model, based as it is on selling common cures to tens of millions of people. For the industry to maintain current levels of sales and profits based on targeted therapeutics will require unprecedented price levels on every breakthrough. It’s an untenable economic model in aging societies necessarily concerned about health care cost containment.

The second great challenge facing medical science today is meeting the medical needs in areas of the world where the patients have very little money. Where there is no money, there is no market, and hence does not attract investment by the global pharmaceutical industry. Malaria, leishmaniasis, Chagas disease, hookworm, drug-resistant tuberculosis, diarrheal diseases – the list of infectious diseases devastating the developing world is long, and the science to develop cutting edge therapeutics for treating them is at the pharmaceutical industry’s fingertips. But its resources are rarely deployed in that direction because there is no potential financial payoff. The latest combination pill for treating chloroquine-resistant malaria must be sold at 10 cents a dose or it will not reach the people who need it the most. The drug industry simply will not invest significant sums in that arena for that paltry return.

The same dynamic is at work in first world markets where there is also demand for medical innovation. The U.S. is now experiencing a major outbreak of drug-resistant bacteria, primarily in its hospitals where two million patients are infected each year, resulting in about 90,000 deaths, according to the Centers for Disease Control and Prevention. More than 70 percent of the bacteria responsible for these hospital-acquired infections are resistant to at least one antibiotic. Yet, according to a database available on the Pharmaceutical Research and Manufacturers Association website, there are just 20 anti-bacterials in development. That is far less than the 77 drugs and vaccines in development for HIV/AIDS, for instance, even though bacterial infections are a comparable public health threat with similar levels of mortality.

The disproportional effort cannot be explained by the relative size of the markets. Sales of HIV/AIDS medications worldwide in 2006 were about $5 billion, while antibiotic sales totaled over $30 billion by one estimate, with more than $8 billion in the U.S. alone. It also can't be explained by the difficulty of the task. While developing new antibiotics isn't necessarily easy, it is a well worn path where new classes of potential molecules have recently emerged. It is reasonable to assume that a sustained research effort could result in numerous new and useful antibiotics.

So what explains the relatively paltry effort? Once again, it is a failure of the market to respond to social need. The bulk of the antibiotic sales are generics and work perfectly well for their intended use. If a company brings a new antibiotic to market, it will not be able to use traditional marketing techniques to push older, cheaper rivals aside. Physicians and hospitals will hold the new drugs in reserve for the most resistant cases, thus limiting sales. Again, the dynamics of the market -- not science -- is holding back innovation.

We must add a third major factor retarding the pace at which the pharmaceutical industry brings new drugs to market. To cope with rising health care costs, payers are increasingly unwilling to pay for new drugs that do not represent a significant medical advance over previous, proven therapies available at generic prices. This is most pronounced in Europe and Japan, where national health care systems have institutions in place like England’s National Institute for Health and Clinical Effectiveness to make these determinations. But even in the U.S., where drug industry lobbyists have been successful in fending off drug price negotiations or bulk purchasing by Medicare, comparative effectiveness search and cost-effectiveness analysis are making headway among sophisticated purchasers and prescribers.

Unfortunately, there is no evidence as yet that this payer push-back is forcing the industry to refocus its research efforts on more medically significant products. Between 1989 and 2000, 58 percent of the 361 new molecular entities (NMEs) approved by the FDA were considered “standard” for review purposes, that is, they did not represent a significant advance over existing therapies. And in the first ten months of 2007, when the FDA approved just 14 NMEs, eight were considered standard – almost the exact same percentage as the earlier era.

But as drug firms survey the political landscape, the prospect of greater efforts at cost control is having an impact on their projections for the future. Several major drug firms have recently announced layoffs of research staff while streamlining their operations. They are also stepping up their purchases of new drug candidates from biotechnology firms, or buying those firms outright, as a way to bolster their lagging R&D pipelines. While the output of these efforts is not guaranteed to have more significance, it suggests that the frequently-utilized strategies of me-too drug development (substituting enantiomers for racemates; developing the six or seventh molecular entity in a class; developing an entirely new class of drugs for a well-treated condition – all of which are usually done by in-house R&D departments intimately familiar with the earlier versions of those molecules or treatments for those conditions) may play a lesser role for industry R&D in the future.

For several decades, industry has insisted that the high cost of pharmaceuticals is the price that must be paid to spur innovation. What patients and practicing physicians got in return was some significant new therapeutics that did indeed substitute for other, more costly health care interventions like operations or long hospital stays. But it was accompanied by a lot of waste in the form of me-too drugs, excessive marketing, and a health care research system that pursues incremental change in well-established markets rather than the truly innovative.

What is needed now are reforms that will create disincentives for wasteful research, reward what's medically useful, and allow the delivery of these therapeutics to everyone who needs them at prices they can afford. The policy world is filled with ideas about how to build such a system: requiring comparative effectiveness studies on all new and old drugs; prizes for breakthroughs; separating R&D from manufacturing, marketing and sales; patent pooling.

There's no guarantee of success in taking this path, either for industry or policymakers, since the low-hanging fruit of the medicinal revolution is still picked. But it should help hold down health care costs in the short run, and reassure patients and those who pay the health care bills that the portion of their health care dollar going to industry-funded research hasn't been wasted.

And it might even help the drug industry’s CEOs relearn the lesson articulated by George Merck Jr. more than a half century ago. “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered that, the larger they have been.”

Part IV: The Innovation Conundrum

The Challenges Ahead

Today, there are two great scientific challenges facing medical science.

In the advanced industrial world, the biggest challenge is discovering cures for the diseases that affect aging bodies like Alzheimer’s, cancer, Parkinson’s, diabetes, and crippling arthritis. In many of these fields, science hasn’t matured to the point where effective intervention is possible. There’s no guarantee that it ever will.

Because I wrote a book debunking industry’s claims about the cost of new drug development, I often get asked, “So, how much do you think it costs to develop a new drug?” I often begin my response this way: “Let’s start by calculating how much it costs to develop an effective Alzheimer’s drug.”

The answer to that hypothetical is an infinite amount of money. Why? Since there are no effective drugs for treating Alzheimer’s, to presume a cost based on historic calculations of drug development costs in other fields is to presume that scientists will succeed some day, which may not happen. After all, in the four decades since President Richard Nixon declared war on cancer, the government spent nearly $100 billion in current dollars (and the private sector additional billions more). Yet physicians still don’t have an effective treatment for many of the 200-plus forms of that disease.

The wild frontier of medical research today is personalized medicine. Much of the hope surrounding stem cell therapies is based on the idea that cells containing personal DNA and grown for a specific purpose are less likely to be rejected by the body. Cancer tumor analysis – breast cancer may be a half dozen different diseases – has created the new field of targeted drugs. And the fact that some drugs’ side effects only effect certain people is allowing scientists to think about evaluating individual genetic make-up so physicians can target medicines to those who will only experience their benefits, and not their risks.

But to the extent any of these personalized medicine strategies succeed, it will erode the drug industry’s blockbuster marketing model, based as it is on selling common cures to tens of millions of people. For the industry to maintain current levels of sales and profits based on targeted therapeutics will require unprecedented price levels on every breakthrough. It’s an untenable economic model in aging societies necessarily concerned about health care cost containment.

The second great challenge facing medical science today is meeting the medical needs in areas of the world where the patients have very little money. Where there is no money, there is no market, and hence does not attract investment by the global pharmaceutical industry. Malaria, leishmaniasis, Chagas disease, hookworm, drug-resistant tuberculosis, diarrheal diseases – the list of infectious diseases devastating the developing world is long, and the science to develop cutting edge therapeutics for treating them is at the pharmaceutical industry’s fingertips. But its resources are rarely deployed in that direction because there is no potential financial payoff. The latest combination pill for treating chloroquine-resistant malaria must be sold at 10 cents a dose or it will not reach the people who need it the most. The drug industry simply will not invest significant sums in that arena for that paltry return.

The same dynamic is at work in first world markets where there is also demand for medical innovation. The U.S. is now experiencing a major outbreak of drug-resistant bacteria, primarily in its hospitals where two million patients are infected each year, resulting in about 90,000 deaths, according to the Centers for Disease Control and Prevention. More than 70 percent of the bacteria responsible for these hospital-acquired infections are resistant to at least one antibiotic. Yet, according to a database available on the Pharmaceutical Research and Manufacturers Association website, there are just 20 anti-bacterials in development. That is far less than the 77 drugs and vaccines in development for HIV/AIDS, for instance, even though bacterial infections are a comparable public health threat with similar levels of mortality.

The disproportional effort cannot be explained by the relative size of the markets. Sales of HIV/AIDS medications worldwide in 2006 were about $5 billion, while antibiotic sales totaled over $30 billion by one estimate, with more than $8 billion in the U.S. alone. It also can't be explained by the difficulty of the task. While developing new antibiotics isn't necessarily easy, it is a well worn path where new classes of potential molecules have recently emerged. It is reasonable to assume that a sustained research effort could result in numerous new and useful antibiotics.

So what explains the relatively paltry effort? Once again, it is a failure of the market to respond to social need. The bulk of the antibiotic sales are generics and work perfectly well for their intended use. If a company brings a new antibiotic to market, it will not be able to use traditional marketing techniques to push older, cheaper rivals aside. Physicians and hospitals will hold the new drugs in reserve for the most resistant cases, thus limiting sales. Again, the dynamics of the market -- not science -- is holding back innovation.

We must add a third major factor retarding the pace at which the pharmaceutical industry brings new drugs to market. To cope with rising health care costs, payers are increasingly unwilling to pay for new drugs that do not represent a significant medical advance over previous, proven therapies available at generic prices. This is most pronounced in Europe and Japan, where national health care systems have institutions in place like England’s National Institute for Health and Clinical Effectiveness to make these determinations. But even in the U.S., where drug industry lobbyists have been successful in fending off drug price negotiations or bulk purchasing by Medicare, comparative effectiveness search and cost-effectiveness analysis are making headway among sophisticated purchasers and prescribers.

Unfortunately, there is no evidence as yet that this payer push-back is forcing the industry to refocus its research efforts on more medically significant products. Between 1989 and 2000, 58 percent of the 361 new molecular entities (NMEs) approved by the FDA were considered “standard” for review purposes, that is, they did not represent a significant advance over existing therapies. And in the first ten months of 2007, when the FDA approved just 14 NMEs, eight were considered standard – almost the exact same percentage as the earlier era.

But as drug firms survey the political landscape, the prospect of greater efforts at cost control is having an impact on their projections for the future. Several major drug firms have recently announced layoffs of research staff while streamlining their operations. They are also stepping up their purchases of new drug candidates from biotechnology firms, or buying those firms outright, as a way to bolster their lagging R&D pipelines. While the output of these efforts is not guaranteed to have more significance, it suggests that the frequently-utilized strategies of me-too drug development (substituting enantiomers for racemates; developing the six or seventh molecular entity in a class; developing an entirely new class of drugs for a well-treated condition – all of which are usually done by in-house R&D departments intimately familiar with the earlier versions of those molecules or treatments for those conditions) may play a lesser role for industry R&D in the future.

For several decades, industry has insisted that the high cost of pharmaceuticals is the price that must be paid to spur innovation. What patients and practicing physicians got in return was some significant new therapeutics that did indeed substitute for other, more costly health care interventions like operations or long hospital stays. But it was accompanied by a lot of waste in the form of me-too drugs, excessive marketing, and a health care research system that pursues incremental change in well-established markets rather than the truly innovative.

What is needed now are reforms that will create disincentives for wasteful research, reward what's medically useful, and allow the delivery of these therapeutics to everyone who needs them at prices they can afford. The policy world is filled with ideas about how to build such a system: requiring comparative effectiveness studies on all new and old drugs; prizes for breakthroughs; separating R&D from manufacturing, marketing and sales; patent pooling.

There's no guarantee of success in taking this path, either for industry or policymakers, since the low-hanging fruit of the medicinal revolution is still picked. But it should help hold down health care costs in the short run, and reassure patients and those who pay the health care bills that the portion of their health care dollar going to industry-funded research hasn't been wasted.

And it might even help the drug industry’s CEOs relearn the lesson articulated by George Merck Jr. more than a half century ago. “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered that, the larger they have been.”

Part III: The Innovation Conundrum

Blaming the Messenger

Contrary to popular belief, the regulatory environment for new drug development has grown less stringent over the past two decades, not more so. A succession of changes in food and drug laws plus new rules propagated by the FDA itself, which began when an alarmed HIV/AIDS patient community began clamoring for new drugs to treat that deadly disease, substantially liberalized the rules under which new drug development takes place.

The Prescription Drug User Fee Act of 1992 sharply reduced the amount of time that FDA reviewers may take to evaluate new drugs once all the data from confirmatory clinical trials have been submitted to the agency. Regulations put in place the same year allowed new drug applicants to measure surrogate markers, not clinical endpoints, to get new drugs approved.

For instance, patients with AIDS saw their white blood cell counts dwindle to near zero. The agency began approving drugs based on a temporary improvement in those white blood cell counts, even though it didn’t substantially increase the likelihood that patients suffering from the disease would survive. It was only when a number of marginally useful drugs were used in combination with each other that clinicians finally figured out how to control the disease in a way that actually saved lives.

The industry also won relaxation of the rules governing industry marketing with passage of the Food and Drug Modernization Act of 1997. Direct-to-consumer electronic advertising began flooding the airwaves. Policing of print advertising and detailing materials (the handouts and gifts used by salespersons who routinely visit physician offices) declined as the number of inspectors on the FDA payroll plummeted. The industry also won strengthened intellectual property protection in the form of extended patent life for conducting pediatric clinical trials or additional market exclusivity for drugs that treat rare diseases.

The FDA Amendments Act of 2007, signed by President Bush in October, passed in large part because of the Vioxx scandal where an estimated 40,000 people died from heart attacks, strokes and other cardiovascular complications that were the unwanted side effect of a painkiller that was no better than many others already on the market. It was the first reversal of the deregulatory trend since the 1970s.

Opponents of the new law at first claimed its passage would slow the pace of innovation. This allowed industry lobbyists to succeed in eliminating most of its more stringent proposals, such as forbidding direct-to-consumer ads for the first three years a new drug is on the market. By the time it passed, even industry applauded the bill.

Why is there any reason to think that this modest bill will slow the pace of innovation, even if it had included the tougher measures?

If anything, history shows that the tougher the rules, the greater likelihood that industry will pursue innovative therapies. The number of new drugs and biologics approved by the agency fell consistently over the past 15 years, a period when the legal and regulatory environment was becoming substantially more hospitable to winning approval of new technologies.

On the other hand, the greatest tightening of standards in the history of drug regulation – the 1938 passage of the safety requirement and the 1962 passage of the efficacy requirement – ushered in eras of rapid medical progress and an explosion of new therapeutics as companies adapted to the higher, more scientific standards. It’s unlikely the 2007 law, which focuses primarily on post-marketing safety issues, will have a comparable positive effect. But there’s no reason to think its impact will be negative.

Clearly, something else is at work to slow the pace of innovation. And that something, in my view, is intimately related to the maturity of the drug industry, and its biotechnology offshoot. It’s been a little more than a century since the German histological chemist Paul Ehrlich developed the “magic bullet” theory of medicinal chemistry. He subsequently developed the first antibiotic for treating syphilis. Today, the FDA has more than 2,400 different approved drugs listed in its so-called Orange Book, covering nearly every imaginable disease (and some that are near to being imagined like restless legs syndrome).

A common ailment like hypertension, where there is a clear correlation between reducing its incidence and curbing heart disease, today has at least six classes of molecules and multiple molecules in each class competing for the large patient population requiring the medicines. In the anti-acid field (an age-old affliction; Alexander the Great is said to have died from a burst peptic ulcer after an all-nighter of binge drinking), acid binders like calcium carbonate (the active ingredient in Tums) begat H2 antagonists like Zantac (now over-the-counter), which begat proton pump inhibitors like Prilosec (now over-the-counter), which begat Nexium (the enantiomer half of the Prilosec racemate mixture, which means when you’re taking Prilosec, half of the pill is made up of the chemical in Nexium). Despite its lack of additional efficacy compared to the OTC medications that could be obtained at a fraction of its price, Nexium was the second best-selling drug in the world in 2006 with $6.7 billion in sales and a 16.9 percent annual growth rate.

A similar analysis could be conducted for many serious ailments like cancer, arthritis, diabetes and asthma. It’s not that these diseases have been cured by the pharmaceutical revolution. Many drugs that exist today only mask symptoms or provide very inadequate relief. Other drugs, such as many of the new antidepressants, are not much better than placebo in treating the disease. Many cancer drugs only extend life for a few months or years, and even then at a frightful cost in terms of caustic and sometimes harmful side effects. The need for better drugs is clear. But after a century of concerted research and development by tens of thousands of scientists and physicians working in the public and private sectors, the low-hanging fruit of medical progress has been picked.

Tomorrow: The Challenges Ahead

Health Wonk Review -- Latest Edition

The latest edition of the Health Wonk Review is up at David Harlow's HealthBlawg. Check it out, if for no other reason that to see that he featured my latest musings at the top! But seriously, this biweekly effort by a rotating group of prominent health care bloggers is an excellent way to find new and interesting sources of information on the web.

Part II: The Innovation Conundrum

Lost in Translation

Every analyst seeking an answer to the declining medical innovation conundrum recognizes the crucial role that scientific understanding plays in coming up with new therapeutic approaches to chronic disease. In its report last year on the declining output of drug industry research and development, the Government Accountability Office noted that the public and private sectors have done a poor job in translating the nation’s massive public investment in basic science and private sector investment in translational science into new therapies.

Think about the remarkable “breakthroughs” of recent years. University and government scientists have mapped the genome, identified key receptors on numerous cancers, and uncovered parts of the biological cascade behind chronic conditions like arthritis, Alzheimer’s and arteriosclerosis. Industry scientists have developed extraordinary tools for discovering new drugs like mass screening of new molecules using computer-chip bioassays and rational drug design based on x-ray crystallography.

There’s growing public investment in new fields like gene therapy and stem cell research, which hold out the promise of curing genetic disorders and degenerative diseases like Parkinson’s and diabetes. Barely a week goes by where a news magazine or the nation’s leading papers do not herald the alluring promise of some new biomedical breakthrough percolating in some company’s lab for one of the many forms of heart disease, one of the more than 200 forms of cancer, one of the numerous neurological disorders, or one of the musculoskeletal disorders that contribute to the frailty and infirmities of old age.

Yet years go by without significant advances against any of these chronic diseases, which are the primary causes of ill-health in an aging society. Something clearly is amiss, the report concluded, in translating basic science into usable products.

The report then critiqued the drug industry’s corporate culture, framed by the demands of Wall Street. The financial incentives formed by the stock market force R&D decision-makers to focus most of their attention on developing blockbuster drugs for proven mass markets. Minor aches and pains, allergies, depression, cholesterol management, acid indigestion – the rewards for a successful new entry in one of these categories, whether or not it represents a significant new advance over previous therapies, are measured in the billions of dollars in sales.

However, the cost of developing new drugs in these categories is high and major contributor to growing R&D costs since showing superiority to placebo for these products often requires clinical trials that enroll thousands if not tens of thousands of patients. Why? Since the drug itself has marginal utility, consumers, regulators and the companies themselves require larger trials to allay concerns that the new, unproven product may be less safe than readily available, proven alternatives. The additional expense of the larger trials inevitably inflates research costs and deflects scientific talent from investigating fields where the risk of failure is far greater.

To be sure, there are some areas where the evolution of scientific understanding has reached the point where successful therapeutic intervention is not only possible, but the likelihood of success is high. Yet industry ignores or under-invests in these areas because they only affect a few thousand or tens of thousands of people. The National Organization for Rare Diseases maintains a database that tracks more than 1,000 diseases, most of which receive scant attention from commercial drug developers. Yet the Pharmaceutical Research and Manufacturers Association – the trade group for the U.S.-based pharmaceutical industry – reports only 300 drugs in development for these conditions.

The blockbuster mentality also leads to a proliferation of so-called me-too drugs, which replicate the action of drugs already on the market and add little or nothing to physicians’ armamentarium for fighting disease. Besides the wastefulness of this activity, it also contributes to the high cost of developing drugs. lt is conceivable, of course, for a company developing a new acid indigestion pill to improve on the 90 percent effectiveness of those already on the market. But it’s not likely. And it’s hard to imagine that the medical benefit would ever justify the cost of enrolling ten thousand or more patients in a clinical trial capable of showing superiority in a statistically significant way. Yet the tests go on. Why? The sad truth is that the upward spiral of drug development costs in recent years in intimately tied to the drug industry’s desperation to replace blockbuster drugs coming off patent with comparable drugs that may provide another 20 years of market exclusivity (and thus marketability), but not much else.

This trend, noted in the GAO report, led the auditors to conclude that the nation’s patent laws were one of areas in need of reform if industry was going to refocus its attention on medically significant products. A series of laws and court rulings have given manufacturers the right to obtain new patents for minor changes in chemical structure, changes in routes of administration, and new uses for old products. These patent extenders provide substantial financial rewards to firms that focus their research attention on extending the marketability of their existing products instead of focusing on the truly new and innovative – always an inherently risky proposition.

Finally, the GAO’s panel endorsed the views of those who partly attribute the slowdown in new drug approvals to regulatory uncertainty, lamenting the fact that the FDA does not have precise standards for measuring the safety or effectiveness of new drugs. Moreover, those standards are constantly shifting, they alleged. In this view, regulatory standards have become progressively tougher in recent years due to a number of high profile safety scandals that led to pulling popular drugs from the market like the fenfluramine/dexfenfluramine combination (1997), Propulsid (2000), Rezulin (2000), Baycol (2001), Vioxx (2004), and Trasylol (2007). With tougher standards have come fewer new drug approvals.

FDA officials vigorously rejects that charge. "I've been at the FDA for 15 years and we've never changed the standards for drug approval," John Jenkins, director of the FDA's Office of New Drugs, told the press when it became apparent that 2007 was shaping up as a very poor year for new drug approvals. Moreover, the rate of approvals has run roughly parallel with the rate of new drug applications, according to FDA statistics.

Tomorrow: Blaming the Messenger?

Dr. Relman Offers a Second Opinion

Dr. Arnold Relman, the former editor of the New England Journal of Medicine and the doyen of contemporary health care critics, offers a must read essay on the decline of medical professionalism in this week's Journal of the American Medical Association. He notes:

Physicians have always been concerned with earning a comfortable living, and there have always been some who were driven by greed, but the current focus on money-making and the seductions of financial rewards have changed the climate of US medical practice at the expense of professional altruism and the moral commitment to patients. The vast amount of money in the US medical care system and the manifold opportunities for physicians to earn high incomes have made it almost impossible for many to function as true fiduciaries for patients.

You can read the full essay here.

The Pharmaceutical Innovation Conundrum

The Wall Street Journal today ran the second of two articles about the downturn in pharmaceutical innovation. Last week's installment suggested these causes for the drought:

It has never been easy to take a drug from the lab, through animal testing and into human trials. The industry estimates only one out of every 5,000 to 10,000 candidates makes it to human trials. And many drugs that work beautifully in animals fail miserably in people. But those odds seem to have worsened in recent years, prompting debate about whether the cause is government regulation, corporate structure or an excessive scientific reliance on chemicals rather than biology.

I believe there is another explanation, which will be articulated in an essay I wrote recently that I will run on this website over the next four days.

Part I: The Pharmaceutical Innovation Conundrum

Breathless reports highlighting the latest medical breakthroughs are a staple of the media landscape, but they mask a darker reality. Pharmaceutical innovation is on the decline. Large sums poured into medical research by the private and public sectors have not produced the promised payoff. The number of important new drugs and biologics introduced into medical practice has dropped precipitously in recent years and has been on a downward trend for over a decade.

The cause of this slowdown has been the subject of much speculation and research, befitting its status as a chronic disease. Despite numerous diagnoses, the sickness still lacks an effective cure.

How bad is it? Between 1993 and 2004, drug industry expenditures on R&D increased 147 percent in inflation-adjusted dollars, from $16 billion to nearly $40 billion. U.S. government R&D over the same period, primarily from the National Institutes of Health, doubled to nearly $30 billion. Yet new drug applications submitted by pharmaceutical and biotechnology firms to the Food and Drug Administration increased just 38 percent. The number of applications for significant new drugs – those that hold out the great therapeutic promise, increased just 7 percent. And new approvals for unique therapeutic molecules or biologics, the ultimate bottom line for drug discoverers, have declined from a peak of about 40 new drugs per year in the mid-1990s to about 20 per year in this decade.

And there’s no sign of a turnaround. Through the first ten months of 2007, the Food and Drug Administration approved just 14 new molecular entities (a newly invented drug never before approved for use in humans) and just one new biologic. And only seven of those drugs were considered a significant advance over previously invented drugs, making 2007 the worst year in pharmaceutical innovation since Congress passed the Prescription Drug User Fee Act of 1992, which was designed to expedite the pace of new drug approvals.

In 2006, the Government Accountability Office sought an explanation for the declining productivity of pharmaceutical industry research and development. The agency convened a panel of scientific experts to ponder the reasons for rising inputs and declining output. Economic theory suggests that higher investment in R&D should produce higher levels of innovation. And while a mature industry might expect a declining rate of return for each additional dollar invested in new technology development, the absolute decline in research productivity by an industry considered one of the crown jewels of American high technology was simply unprecedented.

Add to this the fact that the pharmaceutical and biotechnology industries have been showered significant government support in the form of direct public investment, tax credits, reduced regulatory burdens and a laissez-faire government attitude toward the industry charging exorbitantly high prices in the largest market in the world, and the government’s auditors recognized something beyond the industry’s traditional lament – “R&D is growing more costly; it now costs (fill in the blank: first it was $500 million; then $800 million; now $1.2 billion) to develop a new drug” – was called for. It has become painfully apparent that throwing more money at the industry in the form of higher prices isn’t going to solve it lackluster performance in coming up with new and innovative therapeutics.

The government analysts highlighted some of the more significant factors, but missed the core of the dilemma. They, like many drug industry supporters, identified the issues of prices, investment, regulation, and risk – core concepts in economics – as the drivers of innovation. They placed too little emphasis on science and public health, which, in my view, have always been and remain the wellspring of medical progress.

Tomorrow: Lost in Translation

When Big Egos Clash -- Over Rival Malaria Vaccines

The New York Times this morning prominently features the efforts of Sanaria, Inc. of Rockville, MD to develop an malaria vaccine. Sanaria president Stephen Hoffman, a former military researcher, and his team use the attenuated whole-parasite method of triggering an immune reaction, which is the classic method used in the polio vaccine, for instance.

Near the end of the story, Hoffman is roundly attacked by rival researcher Pierre Druilhe of the non-profit Pasteur Institute in France. His rival research team uses a protein fragment from the parasite's genome, expresses it in large quantities using biotech methods, and injects the fragment in human volunteers to provoke the immune response.

Besides quarreling over their rival methods, Druilhe accuses Hoffman of performing the research at a private firm so he can sell the vaccine for a ton of money in the first world to tourists who will be traveling in the Third World. Both will offer their vaccines, if successful, at low-cost to the developing world.

The Bill and Melinda Gates Foundation is only backing Hoffmann with its mega-millions, according to the story. You'd think they would promote a race by ensuring that both sides in the competition are well-funded.

Persistent Genital Arousal Disorder

How to build traffic for your website? Try carrying stories like this one:

Always Aroused: A Good Thing Gone Awry

Economy Tops Health Care at Top Domestic Concern

The latest Gallup Poll shows that the economy has pulled ahead of health care as the chief domestic issue for the American people when it comes to how they'll vote next year.

Iraq is still number one, of course, with 36 percent citing it as their main worry. But the sub-prime mortgage meltdown and the slowing economy are having an impact. Fully 16 percent of those polled now say the economy will determine how they will vote, just ahead of health care at 15 percent. A month ago, health care outpolled the economy by three percentage points as a driver of votes (18 percent versus 15 percent). Immigration, the other high profile domestic issue, gets noted by just 10 percent of respondents.

Physician Ethics, Actions at Odds

The following is from Integrity in Science Watch, which is published by the Center for Science in the Public Interest.

A nationwide survey of more than 1600 practicing physicians found a sharp divergence between the ethics of the profession and actual medical practice. Well over 90 percent of doctors agreed they should report significant medical errors, turn in impaired or incompetent colleagues, and put patients’ welfare above their own financial interests. But the anonymous survey, which was released last week, revealed that 46 percent of physicians with knowledge of serious medical errors (about 40 percent of survey respondents) failed to report colleagues’ errors at least once. A similar 45 percent of physicians who knew about an impaired or incompetent colleague failed to report it to the hospital or clinic where they worked, or to other relevant authorities. And a large majority of physicians when queried said they would refer patients to imaging facilities in which they were part-owners, with one in four reporting they would not disclose that fact to their patients. “Such behavior could be illegal under federal Medicare statutes concerning self-referral,” noted the report, which appeared in the Annals of Internal Medicine. “This suggests that physicians may not be adequately aware of the legal restrictions on their behavior.” The study was sponsored by Columbia University’s Institute for Medicine as a Profession, which receives major funding from the George Soros-funded Open Society Institute and the Pew Charitable Trusts.

Study Finds Systemic Bias in Meta-Analyses by Conflicted Docs

A new study in the latest British Medical Journal shows that conclusions of meta-analyses conducted by researchers with ties to industry are frequently at odds with the underlying data. After reanalyzing the results of 124 studies that pooled data on various antihypertensive drugs, the researchers found that 45 of 49 or 92 percent of meta-analyses conducted by researchers with financial ties to a single drug company came up with positive findings about that company’s drugs. However, the underlying data included in the meta-analyses justified that conclusion in just 27 of the 49 or 55 percent of the studies. On the other hand, when non-profit researchers conducted the meta-analyses, either alone or in tandem with researchers with ties to the drug industry, 27 out of 27 conclusions matched the underlying studies. “Meta-analyses, as with other study types, are open to the influence of systematic bias,” concluded Veronica Yank of Stanford, and Drummond Rennie and Lisa Bero of the University of California, San Francisco. “Our study also exposes a failure of peer review.”

Independent Researchers Blast NTP Report on Bisphenol-A

The final bisphenol-A report issued late last month by the National Toxicology Program (NTP) relied on industry-funded assertions that the chemical is harmless, the Milwaukee Journal Sentinel reported. The NTP's expert panel reviewed a literature summary prepared by Sciences International, an industry-funded consulting firm subsequently removed from the process because the firm had worked for companies that manufacture BPA. According to the Journal Sentinel, scientists who follow the issue closely claim the final report still relied far more heavily on industry-funded studies than on studies conducted by university and government researchers. “There was clear evidence of bias” in this process, said Gail S. Prins of the University of Illinois at Chicago, whose work was cited in the final report. “They should have started all over.” The final report concluded BPA may be of some concern to small children and fetuses, but poses little risk to adults.

FDA Needs More Resources, Better Science

The Food and Drug Administration’s science advisory panel, which is headed by a prominent industry scientist, concluded the agency is woefully underfunded and lacks the capacity to keep up with the latest science. The panel, chaired by Gail Cassell of Eli Lilly & Co., said the agency must beef up its capacity to monitor the safety of the nation’s food supply; develop a program for managing the latest scientific advances in drug development; implement last year’s Institute of Medicine recommendations on drug safety surveillance; and empower scientists at the agency by appointing a top science officer for every division, and a chief scientist for the entire agency. The report called for increasing FDA spending by $1 billion a year by 2013, including an additional $350 million for food safety, $300 million for information technology, and $350 million for drug safety.

Judge: FWS Must Reconsider Sage Grouse Decision

The Fish and Wildlife Service ignored the advice of scientists when it declined to list the greater sage grouse under the Endangered Species Act, a federal judge ruled last week. The ruling by U.S. District Judge B. Lynn Winmill of Idaho found the agency excluded scientific experts from its decision not to list the species and failed to document experts’ opinions as required by the law, thus violating the ESA’s requirement that the “best science” be applied to listing decisions. The decision not to list the sage grouse was one of many agency decisions influenced by former Interior official Julie MacDonald, who resigned in May. The judge cited the Interior Department Inspector General report that found MacDonald, who had no biology background, had meddled extensively in the sage grouse decision. “MacDonald’s principal tactic is to steer the ‘best science’ to a pre-ordained outcome,” the ruling said.

Health reforms missing target

A friend, James Jaffe, wrote this op-ed article in Friday's Chicago Tribune. Worth reading, as are the comments posted so far which can be found here:

Government-provided care would do more to help than mandated insurance coverage, and attract elusive 15%

Presidential candidates from both parties are barking up the wrong tree when they suggest we can reform the nation's health system by increasing the number of Americans with insurance.

They seem to equate an insured population with a healthy one that receives good and appropriate medical care when it is needed.

That ain't necessarily so.

Many Americans who fail to exercise and eat right and avoid tests such as mammograms and colonoscopies have insurance.

Research showing that patients (about 16 percent of whom are uninsured) receive optimal care only about half the time, suggesting that many insured patients aren't getting exactly what they need.

Getting everyone insured may be a dream that's both misguided and unattainable.

Every state now requires that everyone with a driver's license -- which, in an ideal world, would include every driver -- have auto insurance, but the Insurance Research Council concludes that about 15 percent of drivers are uninsured.

In other words, the percentage of drivers who are uninsured (estimated by the IRC at 14.6 percent in 2004) despite laws mandating coverage, is roughly the same as the percentage lacking health insurance (which the Bureau of the Census put at 15.8 percent in 2006).

Often they're probably the same people.

Intriguingly, the Internal Revenue Service assumes that unpaid taxes hover around this order of magnitude as well. There seems to be a pattern -- getting most people to follow the rules is doable, but reaching that last 15 percent is one tough, and perhaps impossible, task.

Many of those uninsured cannot afford coverage, but this isn't simply a financial problem. Nearly every American child who lacks insurance is eligible for free coverage, yet hundreds of thousands are not yet enrolled. Whatever their reasons, significant numbers of people elect to remain outside the system.

The idea of mandating insurance coverage, which has bipartisan support, is simultaneously radical by American standards and inadequate to solve many of our problems. It promises to be both disruptive and ineffective.

If providing universal and appropriate care is a national priority, we ought to consider a really radical solution like having our government provide each of us with the care we need. Those who want more could buy it.

Public medicine would be like the public libraries or public schools.

People who want to purchase service that goes beyond the standard package or the government's providers would be free to do so, albeit without the tax subsidies now built into our system.

Marginal tinkering with the existing system, like the current debate about expanding the State Children's Health Insurance Program, can help some who are medically disadvantaged. But it will no more solve the underlying problems than the complex but ultimately largely irrelevant solutions being peddled by the candidates.

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James Jaffe is a vice president with the Center for the Advancement of Health.

Copyright © 2007, Chicago Tribune

Energy Bill Includes Prizes for Innovation

Here's one you could illustrate with a light bulb over an inventor's head: The House-passed energy bill includes a slew of prizes for major innovations that will help reduce energy consumption in the years ahead. They include:

* $50 million in prizes for various hydrogen fuel cell advances;

* A $10 million prize for replacing the 60-watt bulb with one that gives off just as much light -- and the same soft light -- at 10 watts;

* $5 million for replacing the standard halogen bulb; and

* $5 million for a solid-state "21st century lamp."

Jamie Love over at Knowledge Ecology International has long championed the idea of substituting prizes for patent monopolies to spur much-needed and more affordable inventions. He'll be glad to know his ideas are gaining traction on Capitol Hill.

Energy Bill Passes House. On to the Senate!

Let's pause from our usually scheduled subjects to cheer House Speaker Nancy Pelosi and the House of Representatives for passing the energy bill yesterday. The U.S. has not raised the fuel efficiency standard since the 1970s. It's stunning to realize it took six years after 9/11 to get around to it.

Repealing $9 billion in special tax breaks for the oil and coal industries also is long overdue. If $90-a-barrel oil and $3-a-gallon gas doesn't give them enough incentive to drill, I don't know that billions more from the taxpayers will. Better that money should go to homeowners who install solar, drivers who buy electric or hybrid-vehicles, and companies that install co-generation power plants.

There's a lot of pork barrel spending in the bill, of course. The alternative energy fields aren't immune from this disease, especially when it means subsidizing growers in Iowa to produce corn-based ethanol or dubious carbon sequestration schemes aimed at maintaining coal production.

It's interesting to note some of the Senate provisions in that regard (they'll be taking up the bill next week). While increasing the amount of fuel made from renewable biomass from 8.5 billion gallons per year in 2008 to 36 billion gallons per year by 2022, it requires that “advanced biofuels,” which means ethanol not derived from corn starch, must equal 60 percent of the total by 2022. It also provides financial support for increased research in cellulosic ethanol to meet that standard.

The Senate bill also places greater emphasis on energy efficiency, such as setting higher standards for new incandescent and fluorescent lights and home appliances. It also rejuvenates the program for helping low-income people weatherize their homes.

On the other hand, the Senate bill makes a huge push on carbon sequestration, including investment in a large-scale demonstration plant. It seems to me that the billions spent on maintaining our reliance on coal might be better spent on a massive R&D push into more efficient means of harnessing the power of the sun, wind and tides. There's new incentives in the House and Senate bills for households and businesses that invest in the current generation of clean technologies. But people who run out and make these investments will be buying the equivalent of personal computers with 286 chips. As one energy expert put it to me recently: "We're still in the 'rotary dial' era when it comes to green power." It's time to reverse the decades-long decline in clean energy R&D.

Docs Aren't All Bad

The Washington Monthly's Kevin Drum in his blog post a few days ago picked up on an important error in reports (including mine) that alleged nearly half of physicians failed to report medical errors. In fact, only 40 percent of physicians knew about serious medical errors committed by their colleagues, according to a chart book put out by Columbia University's Institute for Medicine as a Profession, which sponsored the study. So if 46 percent failed to report errors in at least one instance, the total is closer to 18.4 percent of ALL physicians who failed to report a serious medical error.

It's an important distinction, and it's important to correct errors, including my own. But the fact remains that 92 percent of physicians believe they should report errors, which is as close to unanimous as you're going to get in a survey. Is there any reason to think the behavior in the 60 percent who did not witness errors would be any different than the ones who had? I think the authors of the study were trying to suggest that the nearly half who failed to report errors were suggestive as to how the profession as a whole would react if confronted with that situation.

The precise wording of the question, contained in Table 2 of "Professionalism in Medicine: Results of a National Survey of Physicians" by Eric G. Campbell et al in this week's Annals of Internal Medicine, reads:

In the last 3 years, have you had direct personal knowledge of a serious medical error in your hospital, group, or practice? If yes, how often did you report that error to a hospital, clinic, professional society, or other relevant authority? (1. Always, 2. Usually, 3. Sometimes, 4. Never).

In the report, they do not report the percent who answered "yes" to the first part of that question. They only report in Table 2 and in the discussion that 46 percent answered either 2, 3, or 4 to the second part, meaning that at least once they failed to report a serious medical error. The chart book, which accompanied the release of the study, on Slide 32, reports that 40 percent knew about serious medical errors. But is hard to know whether to trust the chart book, which appears to have been prepared by a public relations agency. That same slide also reports that just 31 percent failed to report serious medical errors, which is not the same as what was reported in Table 2.

Medicare HMOs v. the Docs, Round Two

Congress still hasn't figured out how to rescind the scheduled 10 percent cut in Medicare physician fees without violating its pay-as-you-go or PAYGO rules. But, according to this morning's New York Times, the major medical insurance companies are placing big bets that it won't come at the expense of Medicare Advantage plans.

This year, Democrats in the House and Senate have been trying to live by so-called PAYGO rules. Every dollar in new expenditures must be met with either budget cuts or tax increases. And, by and large, they've managed to do it.

But the next major test will be the annual budget reconciliation for the Department of Health and Human Services, which includes Medicare. Every year since 1997, doctors have been slated to get a 10 percent pay cut. And every year, Congress steps in and rescinds it. Only this year, if they're going to stick by PAYGO, they're going to have to pay for it by cutting other programs or raising taxes. The air hangs heavy with threats by organized medicine that doctors will stop seeing elderly patients if the cuts go through.

A logical way to pay for it would be to scale back the Medicare Advantage payments. That's what the House did in its version of the children's health insurance bill that passed earlier this year.

Why go after Medicare Advantage? For those not familiar with this wrinkle in the nation's senior citizen health insurance program, Medicare Advantage plans were created for seniors who want to enroll in health maintenance organizations. Now, you're probably asking yourself, why would any senior in their right mind want to do that? The answer is simple: the HMOs lure them in by offering additional services over the traditional fee-for-service plan.

How can they afford to do that, you're probably wondering. First, they structure the plans so only the healthiest seniors will enroll (I read stories somewhere that said some companies had set up their enrollment counters in offices where you had to walk up a flight of stairs to get to them). More significantly, Medicare pays the HMOs about 12 percent more per enrollee than the average cost for beneficiaries in the standard fee-for-service plan.

That can get pretty expensive. Indeed, the extra payments for Medicare Advantage amount to a $16 billion a year subsidy for the health insurance industry.

It turns out that Congress needs about $6 billion a year or $60 billion over ten years to rescind the 10 percent pay cut for physicians without violating the PAYGO rules. Simply by cutting MA overage payments by a third (to 8 percent instead of 12 percent over the average fee-for-service plan), the Democrats will be have enough money.

Of course, President Bush will have a say in all this. He stepped into the fray yesterday by sending a letter to Capitol Hill promising to veto any measure that cuts the Medicare Advantage plans. According to Congressional Quarterly, he recommended Congress cut hospital payments instead. The insurance industry, which is moving aggressively to sign up more seniors for their HMO plans, is betting that the president will come through for them.

WSJ Survey Backs Mandates

Here's a fun one for you this morning: The Wall Street Journal's Health Care blog is asking readers if they back mandates to achieve universal health insurance coverage; a single-payer, government-run plan; or do nothing. As of this morning, about 300 people have responded with 43 percent backing mandates; 27 percent backing single-payer; and 30 percent backing the free market uber alles.

I found one comment from "John," an industry consultant, particularly insightful about the poverty of a health care debate that focuses solely on how best to cover the uninsured:

What has not been mentioned is the underlying reasons behind health insurance costs and that is the overall health of Americans. I work in the health insurance field and work with many employer groups who are struggling with their insurance costs. The costs of their plans are driven by a small percentage of plan participants. The remaining participants help fund those costs (i.e., the basics of insurance). With that said, I am consistently seeing costs driven by diabetes, hypertension, cholesterol and asthma. There is a need for change in overall health behavior to make accountability a part of the plan. Any of the proposed plans will not result in anything more than pushing monies around. Without real incentives for behavior modification, the health crisis will continue.

Former FDA Insider Analyzes New Report on Agency's Flaws

Susan Wood, formerly head of the Food and Drug Administration's women's bureau, just posted an insightful analysis of a new report from the agency's Science Board calling for more resources for the agency. She focuses her attention on its proposals for beefing up the FDA's scientific capacity. Check it out over at The Pump Handle, a blog for the public health crowd.

A Tale of Two Professions

Here's one to ponder: Would patients be better off if doctors had the same ethical standards as journalists?

Those thoughts came to mind this morning in reading about the mea culpas issued by the editors of the liberal (mildly) New Republic and the hard-right conservative National Review. Both publications had come under withering criticism for running hard-to-believe articles by soldier-journalists in Iraq.

Stories that make readers sit up and say, "holy shit," are the holy grail for editors. But they are supposed to learn in editing school (oh, would that there were such a place since the editor ranks are filled with great former reporters living out their days proving the Peter principle) that if a story is too good to be true, it probably is. They are also supposed to learn that if your mother says she loves you, check it out. According to this morning's column by Howard Kurtz of the Washington Post, editors at both magazines have retracted stories. After finally checking them out, they discovered the stories were too good to be true.

But at least they corrected the errors. How about your doctors? According to a survey released yesterday by Harvard researchers, there is a huge gap between the professional ethics of physicians and how they behave in practice. Nearly half of physicians who knew about serious medical errors by themselves or colleagues failed to report them, even though well over 90 percent knew they ought to.

At a press briefing held yesterday at the National Press Club, officials from the Federation of State Medical Boards, the American College of Cardiology, and the American Board of Internal Medicine (the folks who regulate physician licensing and two of the nation's largest physician guilds) repeatedly cited fear of malpractice suits as a primary reason for failures to report errors. "We need to reward doctors who report errors and change, not penalize them," said James Thompson, chief executive officer of the Federation of State Medical Boards.

But when asked if stricter regulation and penalties (like temporary suspension of licenses for physicians who repeatedly make medical errors) ought to be part of the solution, most of the panelists shied away from taking on the powerful guilds that control the practice of medicine. "If the medical board and regulatory apparatus were monstrous, it wouldn't solve our problems," said David Blumenthal, the Harvard researcher who was part of the survey team.

It seems to me that is trying to have it both ways. Bad journalism only harms reputations. Bad medicine harms, and sometimes destroys, lives. The tort system serves as the backstop for a failed regulatory system. If you want to reduce role of malpractice suits in the medical system, you must increase the regulatory penalties for failing to adhere to professional standards.

Prudent regulation needn't involve the heavy hand of the state. Self regulation is possible. Editors get it. What news outlet is Janet Cooke working for today? Or Jason Blair? Or the Baghdad diarist? Yet how many doctors have been barred from practicing medicine after being successfully sued for malpractice?

Unfortunately, medicine's professional societies are having a difficult time moving beyond their role as guilds designed to protect the economic interests of their members. When they try to advance practice in their fields, "we get pushback from that proportion of the profession that remains in the guild mentality," said Jack Lewin, CEO of the American College of Cardiology.

Conflict-free Advisers Easily Found

When the original 2001 Vioxx study appeared in the New England Journal of Medicine, its industry-funded authors dismissed data showing the drug raised the risk of heart attack by suggesting the comparison drug in the trial had been cardio-protective. Last month, the Food and Drug Administration did something similar with a study of conflicts of interest on its advisory committees. The agency's press release said it would be difficult to create advisory committees free from conflicts of interest. The study, which cost taxpayers $60,000, according to FedSpending.org, also claimed the advisors granted conflict-of-interest waivers had greater expertise than those without conflicts serving on the committees.

In fact, a Center for Science in the Public Interest reanalysis of the data contained in the report revealed that the FDA and the report should have drawn the opposite conclusions. The report examined four committees created during 2006 that granted 17 waivers. It took just 88 person-hours to identify 30 independent experts with all the expertise needed to fill those slots. Each of the 30 affirmatively declared in the medical literature that they had no conflicts of interest. Moreover, the expertise of those potential candidates, according to the report's own methodology, was greater than either the conflicted or unconflicted experts chosen to serve on the committees.

In a letter sent today to Commissioner Andrew von Eschenbach, a coalition of consumer groups called on the FDA to reopen consideration of an agency proposal made last March that would forbid anyone who has financial ties with industry worth more than $50,000 from serving on advisory committees. It would also deny voting rights to advisers with lesser conflicts. "While the FDA's proposed guidance doesn't go far enough, this study shows that those barred or restricted under its limited provisions could be easily replaced," said Merrill Goozner, director of CSPI's Integrity in Science Project. Recently passed legislation only requires the agency to reduce total waivers by 20 percent over the next five years, which is well short of the total ban on conflicts of interest sought by consumer groups.

Reprinted from Integrity in Science Watch, a publication of the Center for Science in the Public Interest.