Peter J. Pitts is president of the Center for Medicine in the Public Interest and a former FDA associate commissioner. The views expressed are his own.

In SiCKO, Michael Moore portrayed the British National Health Service and the Canadian health system as particular exemplars of excellence. He backed it up with a lot of statistics, but statistics, as the saying goes, are like a bathing suit. What they show you is interesting, but what they conceal is essential.

And what SiCKO concealed was that systems such as those in the United Kingdom and Canada are cost-based rather than patient-centric models. Facts, no matter how inconvenient to one’s argument, must not be ignored.

Citizens of countries with government-run health care systems experience long wait times, a lack of access to certain treatments and, in many instances, substandard medical care. For example:

• The five-year survival rate for early diagnosed breast cancer patients in England is just 78 percent, compared to 98 percent in the U.S.

• A typical Canadian seeking surgical or other therapeutic treatment had to wait 18.3 weeks in 2007, an all-time high, according to The Fraser Institute.

• The average wait time for bypass surgery in New York is 17 days compared to 72 days in the Netherlands and 59 days in Sweden.

• More than half of Canadian adults (56 percent) sought routine or ongoing care in 2005. Of these, one in six said they have trouble getting routine care.

• Eighty-five percent of doctors in Canada agree private insurance for health services already covered under Medicare would result in shorter wait times.

• Approximately 875,000 Canadians are on waiting lists for medical treatment.

“Congress has an important role to play in healthcare reform” said United States Representative John Shadegg, (R-Arizona), who has introduced healthcare legislation in support of free-market competition. “We can help patient in this country, not by setting up a massive new government bureaucracy, but by empowering individuals to make the best choices for themselves and their families.”

If we’re going to look to other healthcare models for solutions, we must uncover and study their problems. Health care is too important to allow reform by sound bite. “Drugs from Canada” is as much a false promise as “free” healthcare.

Last autumn, my organization the Center for Medicine in the Public Interest interviewed people on the streets of New York City and asked them if they’d prefer “government” healthcare or “universal” healthcare. They overwhelmingly chose “universal” healthcare. But when we asked them to explain the difference between the two, they generally just shrugged their shoulders.

And when we asked them how much more in taxes they’d be willing to pay to support universal healthcare, they shook their heads and said, “No, we want it to be free, like in Europe and Canada.” Such are the fallacies that political rhetoric hath wrought.

Equally as prevalent is the notion of “free” or “low cost” drugs “like in Canada and Europe.” And here too we need to be honest and examine the other side of the coin — that of cost-savings for the payer (often in the guise of healthcare technology assessment programs such as Britain’s National Institute for Health and Clinical Excellence) versus care denied for the patient. What is overlooked is that price controls equals choice controls.

Our national conversation about health care has to go beyond vague concepts of reform and convenient political rhetoric. We must all be part of the solution and suspicious about false choices.

– Peter Pitts is president of the Center for Medicine in the Public Interest and a former FDA Associate Commissioner. The views expressed are his own. –

As part of its healthcare reform bills, Congress is calling for a more aggressive use of comparative effectiveness research (CER). What does this mean? Is comparative effectiveness the same thing as cost effectiveness?

No. There’s a big difference.

Cost effectiveness research is what The United Kingdom’s National Institute for Health and Clinical Excellence (NICE) does. NICE uses a measure known as a Quality Adjusted Life Year (QALY) to assess whether or not a treatment is cost-effective or not. If providing an additional year of life costs more than $50,000 — the average price of a fully-loaded Land Rover — NICE won’t recommend that treatment.

For example, NICE’s preliminary decision was that four new kidney cancer drugs — Torisel, Avastin, Nexavar, and Sutent — should not be reimbursed by the National Health Service (NHS) because, despite clinical evidence that these drugs can actually help, they weren’t “cost effective.”

Currently, the only available treatment for metastatic renal cell cancer is immunotherapy. This halts the disease’s progress for just four months on average. But if a person isn’t a candidate for immunotherapy, or the treatment doesn’t work, that’s it. They have no other treatment options.

NICE agreed that patients tended to live longer when they were given these drugs. But when they put the data from the trials into their QALY-driven computer models, they found that the drugs cost about £20,000 to £35,000 ($39,000 to $68,000) per patient each year. NICE deemed this too pricey, and didn’t recommend that the NHS cover these drugs.

The result is that government saves money and patients receive an expedited death sentence. That’s not hyperbole, that’s the simple truth about cost effectiveness research.

Comparative effectiveness research is different.

It strives to show which medicines are most effective for a given disease. In other words, CER asks whether drug A or drug B is the “more effective” statin. It examines which of a variety of therapies is the “more effective” treatment for depression. Most of the world refers to comparative effectiveness research as Healthcare Technology Assessment.

But CER raises some serious problems. For instance, how do you compare two molecules (or three or more) that perform differently depending on a patient’s personal genetic make-up?

It’s for this reason in particular that CER often leads to a “one-size-fits-all” approach to treatment.

That’s because the concept behind comparative effectiveness research is good, but the tools aren’t.

CER relies heavily on findings from randomized clinical trials. While these trials are essential to demonstrating the safety and efficacy of new medical products, the results are based on large population averages that rarely, if ever, indicate which treatments are “best” for which patients. This is why it is so important for physicians to maintain the ability to supplement study findings with their own expertise and knowledge of their patient in order to make optimal treatment decisions.

Government sponsored studies that conduct head-to-head comparisons of drugs in “real world” clinical settings are a valuable source of information for coverage and reimbursement decisions — if not for making clinical decisions.

Two studies — the Clinical Antipsychotic Trials in Intervention Effectiveness (CATIE) study, and the Antihypertensive and Lipid-Lowering Treatment to Prevent Heart Attack Trial (ALLHAT) study — are examples of “practice-based” clinical trials, sponsored in part by the National Institutes of Health, to determine whether older, less expensive medicines were as effective in achieving certain clinical outcomes as newer, more expensive ones.

The findings of both CATIE and ALLHAT were highly controversial, but one thing is not: even well-funded CER can be swiftly superseded by trials based on better mechanistic understanding of disease pathways and pharmacogenomics. And, since most comparative effectiveness studies are underpowered, they don’t capture the genetic variations that explain why different patients respond to medicines in different ways.

But it’s important to move beyond criticizing comparative effectiveness in its current form, and instead focus on a policy roadmap for integrating more patient-centric science into comparative effectiveness research.

Much like the U.S. Food and Drug Administration created something called the Critical Path Initiative to apply 21st-century science to the development of personalized medicine, another national goal should be to create a Critical Path Initiative to apply new approaches to data analysis and new clinical insights to promoting patient-centric healthcare.

Why? Because comparative effectiveness research should reflect and measure individual responses to treatments based on a combination of genetic, clinical, and demographic factors. The first steps have been taken. For example, the Department of Health and Human Services has invested in electronic patient records and genomics.

One way to complement this would be to encourage the Centers for Medicare and Medicaid Services to adopt the use of data that takes into account individual patient needs.

We also need to develop proposals that modernize the information used in the evaluation of treatments. Just as the FDA Critical Path Initiative uses genetic variations and biomedical informatics to predict individual responses to treatment, we must establish a science-based process that incorporates personalized medicine into reimbursement decisions.

For instance, the FDA has developed a Critical Path opportunities list that provides 76 concrete examples of how new scientific discoveries in fields such as genomics and proteomics could be used to improve the testing of investigational medical products.

We need to begin the process of developing a similar list of ways new discoveries and tools (such as electronic patient records) can be used to improve CER.

It’s a complicated proposition, but the goal is simple and essential: cost must never be allowed to trump care, and short-term savings must not be allowed to trump medical outcomes. Just as we need new and better tools for drug development, so too do we need them for comparative effectiveness research.

– Peter J. Pitts is president of the Center for Medicine in the Public Interest and a former FDA associate commissioner. The views expressed are his own. –

When it comes to healthcare reform, as Aldous Huxley said, “Facts do not cease to exist because they are ignored.”

Three of the most common “urban myths” of American healthcare are that:
1. The lower life expectancy in the U.S. “proves” the total inadequacy of our system;
2. There are 47 million uninsured Americans — proving the inequity of our system; and
3. We spend “too much” on health care — proving the wastefulness of our system.

As the Ol Perfessor used to say, “Let’s look at the numbers.”

1. Lower Life Expectancy: According to N. Gregory Mankiw, Professor of Economics at Harvard University, “The United States has lower life expectancy and higher infant mortality than Canada, which has national health insurance.”

This fact, according to Mankiw, is often taken as evidence for the inadequacy of the U.S. health system. But a recent study by June and Dave O’Neill, economists at Baruch College, from whom these numbers come, shows that the difference in health outcomes has more to do with broader social forces.

Americans are more likely than Canadians to die by accident or by homicide. For men in their 20s, mortality rates are more than 50 percent higher in the United States than in Canada, and the O’Neills show that accidents and homicides account for most of that gap. Maybe these differences have lessons for traffic laws and gun control, but they teach nothing about the U.S. system of health care.

Americans are also more likely to be obese, leading to heart disease and other medical problems. Among Americans, 31 percent of men and 33 percent of women have a body mass index of at least 30, the dividing line between overweight and obese, versus 17 percent of men and 19 percent of women in Canada. Research by the Harvard economists David Cutler, Ed Glaeser and Jesse Shapiro concludes that the growing obesity problem in the United States is largely attributable to its ability to supply high-calorie foods inexpensively.

Infant mortality rates also reflect broader social trends, including the prevalence of infants with low birth weight, which is correlated with teenage motherhood. Whatever its merits, a Canadian-style system of national health insurance is unlikely to change the sexual mores of American youths.

2. 47 Million Uninsured: This number from the Census Bureau is regularly cited by President Obama and almost every proponent of “universal healthcare” as evidence that the health system is failing for many families. Yet by masking tremendous heterogeneity in personal circumstances, the figure exaggerates the magnitude of the problem.

The 47 million includes about 10 million illegal immigrants. And all the current legislation being considered in Congress specifically excludes illegal immigrants from government healthcare. The “Big Number” also includes millions of the poor who are eligible for Medicaid but have not yet applied. They could be insured, on the government’s dime, tomorrow. And about a quarter of the uninsured have been offered employer-provided insurance but declined coverage, often because of cost. The solution to this isn’t Uncle Sam, MD, but smarter insurance regulation.

A new study by University of Minnesota economists Stephen Parente and Roer Feldman shows that Congress could boost by more than 12 million the number of people who have health insurance without spending taxpayer dollars. The change required is to allow people to buy health insurance across state lines, so they can shop for less expensive policies. For example, a typical health-insurance policy in heavily regulated New York costs more than three times as much as in less regulated Iowa ($388 a month versus $98 a month for the same coverage).

3. We Spend “Too Much” on Healthcare : In 1950, Americans spent about 5 percent of their income on health care. Today the share is about 16 percent. According to Harvard’s Mankiw, “many pundits take the increasing cost as evidence that the system is too expensive. But increasing expenditures could just as well be a symptom of success.”

And he hits a homerun with a clear, concise, and common sense explanation. “The reason Americans spend more than their grandparents did is not waste, fraud and abuse, but advances in medical technology and growth in incomes. Medical science has consistently found new ways to extend and improve lives. Wonderful as they are, they do not come cheap.”

Consider the question posed by economists Charles Jones of the University of California and Robert Hall of Stanford: “As we grow older and richer, which is more valuable: a third car, yet another television, more clothing - or an extra year of life?”

As the old saying goes, everything you read in the newspaper is true, except for those things you know about personally. Healthcare reform is too important (and too complicated) to permit reform by sound bite.

— Peter J. Pitts is president of the Center for Medicine in the Public Interest and a former FDA associate commissioner. The views expressed are his own. —

On Tuesday, House Democrats released the Affordable Health Choices Act of 2009, their comprehensive health reform package. As expected, the proposal to create a brand new government insurance program designed to directly compete with private plans is getting a great deal of attention.

An important power of this “public option” has yet to receive much scrutiny, though. The secretary of Health and Human Services will be given the authority to “negotiate” prescription drug prices for the public option.

This is a big deal. Government “negotiations” with private vendors almost always mean public officials simply dictating below-market prices. If that holds true in the public option, drug companies that want to participate in the program will be forced to deeply discount their meds.

These negotiations might translate into cost-savings for patients up front. But the long term effect would be a stifling of pharmaceutical innovation, leading to fewer new breakthrough medicines and compromised patient care.

How so? Developing a new pharmaceutical drug is incredibly expensive. The whole process –including the initial research stages, the countless in-lab experiments required to turn a promising chemical into a usable drug, and the slow, grinding navigation through the FDA’s notoriously difficult safety approval pathway — costs over a billion dollars and takes over a decade for the average drug.

Forcing pharmaceutical makers to sell at artificially low prices for a substantial slice of their customer base would drastically reduce their revenues, and leave an increasingly small amount for financing the discovery of new drugs.

It’s also likely that many drug producers simply won’t be able to afford to sell at government-demanded rates. They won’t participate in the public option, and beneficiaries will be stuck with fewer drugs choices.

As Stanford economists Alain Enthoven and Kyna Fong have explained, when discussing Medicare Part D, “Government price negotiation could leave people without drugs that manufacturers decide aren’t sufficiently profitable under the plan.”

That’s exactly what has happened under the health insurance program run by the Department of Veterans Affairs, which is already empowered to directly negotiate prices with drug producers.

Of the 300 most prescribed drugs among Americans 65 and older, the VA only covers 65 percent of them, according to a study from the Lewin Group. By contrast, the two most popular plans in the Medicare Part D drug benefit — where private insurers compete for customers — each cover 94 percent of those medicines.

In fact, over a third of retired veterans supplement their VA coverage by enrolling in Part D

The Part D model hasn’t sacrificed cost-savings for choice, either. The competitive pressures among participating insurers have lead to a 17 percent drop in out-of-pocket spending for seniors who enrolled in the program in 2006 — that’s equivalent to 14 extra days of medicine a year.

Moreover, Part D’s total expenses over the next decade are expected to be nearly $120 billion less than originally estimated when the program was created.

Senate Democrats could unveil their healthcare bill by as soon as the end of the week. Legislators from both chambers will then have to hammer out compromise legislation. Hopefully, when it comes time to vote, the final bill will eschew the government-heavy approach typified by direct negotiating powers. Instead, officials should take a cue from Part D and enable market competition to bring down health costs while expanding patient access to vital pharmaceutical treatments.

— Peter J. Pitts is president of the Center for Medicine in the Public Interest and a former FDA associate commissioner. The views expressed are his own. –

On Thursday, as part of the Department of Homeland Security funding bill, the Senate voted to make us less secure by allowing Americans to purchase prescription drugs from Canada over the Internet. The measure is now headed to conference, where House and Senate lawmakers will hammer out a final piece of legislation.

When he introduced the measure to his fellow Senators, Louisiana Republican David Vitter described it as a “re-importation amendment.” And over the next few weeks, as lawmakers deliberate on this, you’re likely to hear that phrase quite a bit. Supporters of foreign drug importation believe that such wording makes this policy more palatable to the American public.

After all, the implication of the term “re-importation” is that once the ban is lifted, U.S. manufacturers will export their drugs to foreign distributors, which will, in turn, sell back those exact same drugs to us.

Brand-name pharmaceuticals found abroad tend to be significantly cheaper than they are in the States, largely because foreign governments impose stringent price controls on most drug sales.
Advocates claim that “re-importation” will allow American patients to benefit from this price disparity.

But “re-importation” doesn’t actually describe what will happen if foreign drug importation is legalized. Using the term is an act of linguistic misdirection — or outright chicanery, if you’ve got a cynical streak.

Importing drugs from Canada is exceedingly dangerous for a number of reasons. For starters, many Internet pharmacies based up North are stocked with drugs from the European Union. And while many wouldn’t hesitate to take medicines purchased from countries like France and Great Britain, there’s plenty of risk involved.

The EU currently operates under a system of “parallel trade,” which allows products to be freely imported between member countries. This means that any drugs exported from the U.K. to Canada could have originated in an EU country with significantly less rigorous safety regulations, like Greece, Portugal, Latvia, or Malta.

Just last year, EU officials seized over 34 million fake pills in just two months. And in May, Irish drug enforcers confiscated over 1.7 million pounds of counterfeit and illegal drug packages. So if American customers start buying drugs over the Internet from Canadian pharmacies, they could easily wind up with tainted medicines of unknown European origin.

It’s also important to note that drugs from anywhere in Europe aren’t even legal for sale in Canada. So, when politicians say we can get “the same drugs” that Canadians get, they’re just plain wrong.

Even more worrisome is outright fraud — many “Canadian” pharmacies are actually headquartered somewhere else.

A 2005 investigation by the Food and Drug Administration looked at 4,000 drug shipments coming into the United States. Almost half of them claimed to be from Canada. Of those, a full 85 percent were actually from countries such as India, Vanuatu, and Costa Rica.

As part of another investigation, FDA officials bought three popular drugs from two Internet pharmacies claiming to be “located in, and operated out of, Canada.” Both websites had Canadian flags on their websites. Yet neither the pharmacies nor the drugs were actually from Canada.

As an FDA official told Congress, “We determined there is no evidence that the dispensers of the drugs or the drugs themselves are Canadian. The registrants, technical contacts, and billing contacts for both web sites have addresses in China. The reordering website for both purchases and its registrant, technical contact, and billing contact have addresses in Belize. The drugs were shipped from Texas, with a customer service and return address in Florida.”

And in laboratory analysis, every pill failed basic purity and potency tests.

Right now, American patients that head online to buy drugs are motivated by the cut-rate prices they see on the web. Health insurers could help patients avoid this temptation by reducing co-pays for drug purchases, particularly for low-income patients. If drugs become more affordable in the States, patients won’t feel the urge to look for a bargain abroad.

Dropping drug co-pays would also help patients stick to their prescribed treatment regimes. All too often, people skip a dose, don’t get a refill, or stop taking their drugs prematurely in order to save money. In the long run, though, not adhering to a drug regimen leaves patients less healthy — and increases national medical expenses by an estimated $300 billion annually.

Calling foreign drug importation “re-importation” is a clever way to sell the idea to the American people. But the term simply doesn’t fit with the facts. In reality, Americans would end up jeopardizing their health by purchasing unsafe drugs made in foreign countries.