Tuesday, May 31, 2011

Michele Bachmann: "In the midst of all the talk about facts and figures and insurance policies, we can't forget humanity. I want to see us focus on finding cures as well. Cures for Alzheimer's, cures for diseases that particularly deal with senior citizens, diabetes, for instance, that’s what we need to do."

Michele Bachmann continues to effectively address the twin concerns that people have about the healthcare system today.

On the one hand, people fear the cost of the healthcare system--and of course, the rapidly rising cost of Medicare is a major flashpoint political issue these days.  But on the other hand, even more than they fear the cost of healthcare, folks fear the ravages of ill-health.   To paraphrase the great medical philanthropist Mary Lasker, if you think the healthcare system is expensive, consider the expense of not having a healthcare system.   People live longer and better today, not because they have health insurance, but because healthcare providers have the medicines and treatments that secure their good health.

So the challenge is to simultaneous grapple with the important cost issue and theeven more important  health/medicine issue.  And Bachmann has found the formula.

The latest display of her political/policy acumen came this morning on "Fox & Friends."  As always, Bachmann was resolute on the issue of controlling taxes, spending, and the debt.  And yet at the same time, as she said, there's more to American life than "facts and figures and insurance policies."  What else?  For openers, there's life itself.   So in addition, there's the issue of the good health and long life--and economic productivity--of the American workforce.   And that means medical progress and cures.

Here's the Serious Medicine-related portion of the transcript:

FOX & FRIENDS: Are you somebody that's going to back off from Paul Ryan's plan to reform and preserve Medicare and Medicaid? Because of what happened in New York in that race in Buffalo where the upset happened because they claim, because of the ryan medicare and medicaid plan, his path to prosperity?

BACHMANN: I voted for Paul Ryan's plan. He's right, we have to save and keep solvent Medicare. What's the alternative? It goes into bankruptcy.  Paul is exactly right.

The asterisk I put on that level of support are two things: 

Number one, I want everyone to know this is the 55 and under plan. No one 55 years of age or older will be touched in anyway. The only reforms affect people 55 and younger. 

The other thing is, in the midst of all the talk about facts and figures and insurance policies, we can't forget humanity. I want to see us focus on finding cures as well. Cures for Alzheimer's, cures for diseases that particularly deal with senior citizens, diabetes, for instance, that’s what we need to do. Just like we were able to eradicate polio, that's make that same type of effort for cancer and Alzheimer’s. That's an important area for us to concentrate as well.

Saturday, May 28, 2011

The Medicare "Hangover"?

Thursday, May 26, 2011

Mike Huckabee, Serious Medicine Strategist, on the Ryan Plan, and what Republicans--and all Americans--need to do next.

Mike Huckabee was on Greta Van Susteren's "On The Record" show last night, discussing the Paul Ryan Medicare plan.   Using his trademark humor, as well as his insight in the practicalities of politics and the potential of science, Huckabee applied himself to to the crucial challenge of saving money on Medicare--and to the equally crucial challenge of saving money in a politically acceptable way.   Huckabee expressed his support and admiration for Ryan, but then added an essential supplement: A serious research effort aimed at reducing Medicare costs.  We might call it "The Ryan Plan Plus."

The point, he said, was to combine spending cuts and medical progress. Here's the key passage from his appearance last night:

Look, nobody claims that Paul Ryan got the Medicare proposal that he got on two tablets of stone postmarked Mount Sinai.  But the fact is, he's put something on the table.  Now Republicans and Democrats can say, We like this piece, but here's how maybe we can improve the under 55.

One thing we ought to be doing, Greta, is putting more focus on the prevention of disease, and then the cures and management of disease.  We're going to be spending trillions of dollars on Alzheimer's disease alone over the next several decades.  It is a huge issue.  Let's put more cost in trying to prevent what is going to bankrupt Medicare.  That makes a lot of sense, and it's a great message for Republicans to adopt.

And, for the record, here's the whole of the Medicare-discussion transcript:

VAN SUSTEREN:  Nice to see you, sir.  Governor, is the budget -- the Ryan budget plan sort of a litmus test for the Republican Party?  And do you agree with Rush Limbaugh that somebody within the Republican Party needs to step up?

HUCKABEE:  Well, the most important thing to remember is that Paul Ryan is the only person who's actually put a plan on the table.  Democrats keep talking about that they don't like Ryan's plan.  Where's theirs?
Where is their plan?

I think the Republicans need to make this a messaging battle and put it in terms people can understand.  For example, if I go shopping for milk, I look for the milk that has the longest life in it.  I don't buy a carton of milk that's going to expire tomorrow, I buy one that's maybe going to last for two more weeks.

What we need to understand is Ryan's not trying to get rid of milk, he's trying to make sure that the milk that we sell has the longest possible shelf life.  Now, Americans get that.  And so it's a matter of how we message this.  And it's very important, I think, for Republicans to say, Look, we like Medicare.  We think it's been a great safety net for a lot of people.  But we like it enough, we want to keep it on the shelf longer and not let it go bankrupt in the next few years, which is exactly what's going to happen.

VAN SUSTEREN:  Well, as I understand Congressman Ryan's plan -- see if I have it straight -- is that if you are 55 or older or 56 or older -- I can't remember the cut-off -- is that Medicare is as we know it, if you're under that age, that there is -- that it -- that it would change under his plan. And that's in recognition of the fact that we can't sustain it like it is because we can't afford it.  It's going to implode,  It's not going to work out.

So the debate between the Republicans and the Democrats, assuming that they're sitting in the same room, talking, would be, is how do we fashion for the people under the age 55 so that they can get the best case scenario with -- that's practical and reasonable based on our economic forecast, our demographics of who's going to be alive at that age, all those sorts of things.

Is that a fair description of where we are?

HUCKABEE:  It's a very fair description.  And I think one thing we have to remember.  I'm a big fan of Paul Ryan because I do think that he is a cerebral member of Congress that's not just throwing out some cute little sound bites, and he's taken an honest look and he's put some real numbers down.

Look, nobody claims that Paul Ryan got the Medicare proposal that he got on two tablets of stone postmarked Mount Sinai.  But the fact is, he's put something on the table.  Now Republicans and Democrats can say, We like this piece, but here's how maybe we can improve the under 55.

One thing we ought to be doing, Greta, is putting more focus on the prevention of disease, and then the cures and management of disease.  We're going to be spending trillions of dollars on Alzheimer's disease alone over the next several decades.  It is a huge issue.  Let's put more cost in trying to prevent what is going to bankrupt Medicare.  That makes a lot of sense, and it's a great message for Republicans to adopt.

VAN SUSTEREN:  I don't -- I don't have -- I don't have the answer (INAUDIBLE) have the answer.  But I certainly have strong feelings that anyone who doesn't have a plan or an idea is a big jerk, you know, in the sense that, you know, they've been sitting up there on Capitol Hill.  And it's not just enough to say no.  It's not just enough to say, I don't like your idea.  You know, there are a lot of them sitting up there, you know, saying, you know, without any ideas.  And the American people really care about the health.  If any American has sat in an intensive care unit and listened to the equipment and the breathing equipment some loved one knows how important it is. And I find it appalling that they aren't working this out better.

HUCKABEE:  Well, and I think what you just said is what the Republicans need to hit upon, is that they're willing to listen to ideas.  They're willing to make changes in the proposal.  But they're not willing to sit back and do nothing.  And they're willing to put their political careers on the line so that their kids and their grandkids don't see a country that goes bankrupt and they end up having to, you know, learn Mandarin just so that they can learn the language of their new country that's going to own every dollar they've ever earned.

That's why I think Paul Ryan has got to be given some support.  And again, this is not about saying we're going to get rid of Medicare.  Barack Obama was going to take half a trillion dollars out of Medicare through the "Obama care" budget.  And the Democrats act like he didn't even propose it!   Well, you can't take that much out of a system in which you got 10,000 Baby Boomers every single day retiring into it and spend less money.  That's simply not logical.

Thursday, May 19, 2011

Predictable surprise:The Obama administration has not come up with a medical malpractice proposal

Politico Pulse scoops:

FIRST IN PULSE: E&C LOOKING FOR DEM MED-MAL BILL- In a video, Republicans on the House Energy and Commerce Committee wants to know where the White House's medical malpractice proposals are, quoting President Obama's comments at the State of the Union. "Mr. President, we look forward to your response," the video is called. The video http://bit.ly/jc8a93 

But of course, there's been no follow up from the administration, and probably won't be. 

Thursday, May 12, 2011

Human Genome Project generates a 20,900 percent return on investment. Could such wealth--and health-creation have any bearing on Washington DC's framing of the healthcare issue?

Fast Company's Ariel Schwartz takes note of a new report calculating the economic value of the Human Genome Project; the return on investment--$3.8 billion begetting $796 billion, for a more than 20,000 percent increase--makes even Apple’s massive stock appreciation look small:

The project has, in fact, driven $796 billion in economic impact and generated $244 billion in total personal income, according to a new report from Battelle. Sometimes, pricey long-term science projects are well worth it.

According to the report, the nascent genetic research industry generated $67 billion in U.S. economic output and created 310,000 jobs in 2010 alone. "We were surprised by just how large the economic impact had been," says Greg Lucier, CEO of Life Technologies (the foundation that sponsored Battelle's research). "What was even more interesting for me is that we're just getting going. The ability now to read genes quickly and economically is opening up entirely new vistas of opportunity." 

These are good numbers, of course, although they are basically unheard and unobserved by the political class in Washington.  

Why? Because the future benefits of scientific transformation are not factored into policymaking.  As a general rule, the Congressional Budget Office will not "score" anything that doesn't involve "normal accounting"--measured in the most linear manner.

The IRS, to be sure, is happy to collect the tax money from added profits, of course; and ordinary Americans are happy to have the better health and more jobs, but the CBO doesn't calculate scientific advance in its projections.    Perhaps, as a matter of policy, the CBO is wise not score "anticipation," but that self-imposed limitation only means that policymakers elsewhere in the government should factor in the inherent limitations of the CBO, and should be looking elsewhere, as well, for policy inputs and metrics.

Unfortunately, Washington does not see the limits of we might call "CBO-ism."  Instead, CBO serves as a crutch to both parties, although it is more valuable to the Democrats.   Thanks to CBO scores, both parties can claim justification for their fiscal policies, although the Democrats--being the party determined to defend the big-government status quo--seem happier with the CBO and its number-crunching works.

But even if the Republicans get less satisfaction from the CBO, they still tend to rely on it, because they can use CBO numbers to show that they are moving toward balancing the budget--or that the Democrats are not.

Yet thanks in part to the enormous power, the common shared fallacy of both parties is that they seem to think that such budget-balancing is the most important thing that they can do--even if they disagree, of course, on how to get to a balanced budget.  And that common commitment to the centrality of a balanced budget--whether it is to be achieved by tax increases or by spending cuts--only further blinds the parties to the promise of profound scientific transformation.

But there's another way of looking at fiscal policymaking: And that is, if the economy is growing--or better yet, booming--the deficit will disappear.   And for that matter, many other problems will disappear, too.

That's the thing about scientific transformation, and one of its subsets, Serious Medicine.  The strength of scientific transformation is that it obviates partisan fighting, allowing society to move up the escalator of progress.  But of course, that's also the downside, because in the heat of the political moment, both parties seem to prefer the partisan fight, as opposed to the conciliation that comes from problem-solving.

No wonder the Human Genome Project gets so little traction in DC policy circles.

Fortunately, the march of science continues, as Schwartz explains in her Fast Company item:

And that nearly $800 billion is just the start of the money that will start rolling in as technology improves. "In my view, DNA sequencing will become as ubiquitous as the stethoscope in medicine," says Lucier. This could happen sooner rather than later; the same sequencing services that cost billions of dollars 10 years ago cost only thousands of dollars today.

"Companies like ours have been investing hundreds of millions of dollars in development [of DNA sequencing technology. Our knowledge of chemistry and computing have been combined to where you can do things at the molecular level quickly," explains Lucier. . . . At the end of the day, we'll bet the $3.8 billion turns out to be a fantastic investment.

The reality of scientific transformation is what Washington bean-counters can't get their heads around.  For reasons I explained for the Manhattan Institute’s Medical Progress Today, politicos and Washington-oriented policy mavens can’t deal with outside-the-Beltway forces, such as technology and the transformation it begets.   

Instead, the Beltway political class seems enraptured with its own version of numerology--that is, a fascination with purely financial transactionalism, as scored by the great idol of Powertown, the Congressional Budget Office.   And that numbers-obsession, dealing within the zero-sum environment of accounting, leads Washingtonians, right and left, toward healthcare rationing schemes.  Rationing schemes, of course, which were soundly rejected by the voters in 2010 and will be again in 2012. 

Perhaps after both parties find themselves rebuked by the voters, one or both parties will look up and notice that the real secret to politically acceptable healthcare is better health.  Although, of course, there's still time for the parties to wake up before 2012 and realize that science holds the key to a better healthcare platform.   

If so, even the bean-counters will be happy, once they get over their bad case of "not invented here." Because better health also means lower healthcare costs over the long run.  

Wednesday, May 11, 2011

Newt Gingrich, announcing for president, puts Serious Medicine on the national agenda

Newt Gingrich announced today for President, offering a distinctly different kind of message to the American people.  

This passage from his brief and succinct announcement video stands out: "There's a much better American future ahead.  More jobs, more prosperity, a better health system, longer lives, and greater independent living."

Every presidential candidate, in both parties, talks about jobs and prosperity--including Gingrich.

But Gingrich then went off in a different direction: He didn't say a cheaper healthcare system--he said a better healthcare system.   As we all know, the standard mantra of both parties has been cheaper--"bend the cost curve," pols like to say.  And then he continued, in the vein of "better": longer lives and greater independent living.    In other words, better health, including for senior citizens.  

And let's be blunt: That's an attractive offer to a lot of people.  To just about everyone, in fact.   Bad healthcare isn't worth very much, even if it's cheap, and good healthcare is worth a lot, even if it's expensive.   Although, of course, history shows that when something gets good, it usually also gets cheaper.   That's the story of mass production and economies of scale.

So why hasn't it been the case that improvements in health, life expectancy, and greater independent living are a standard part of the policy repertoire? Good question.

One possible reason, of course, is that it's simply easier for a politician to say that he or she will spend less on healthcare (or more).   That is, if nothing else, politicians control the tax-and-spend spigot.

But that could be changing.  Gingrich has put the better healthcare issue on the agenda.  Gingrich, in fact, has always been a proponent of this argument, going back decades.  But never before, of course, as a presidential candidate.

Eventually, of course, the American people will come to see that their healthcare system is not giving them what they really want from that healthcare system, which is better health.  Not health insurance, but health itself.

It might seem like a complicated argument, because it is so different from what the extant political class is saying.

But it's actually a rather simple point that Gingrich is making: Cure is better than care.  It's cheaper to beat than to treat.   It's the sort of argument that Ronald Reagan used to make.

Tuesday, May 10, 2011

Fewer Drugs, Shorter Lives, Less Prosperity: The Impact Of Comparative Effectiveness Research on Health and Wealth

Editor's Note: This is an important piece on Comparative Effectiveness Research from the Center for Medicine in the Public Interest, a leading voice in the struggle to improve our national health through the expansion of personal freedom and the advancement of Serious Medicine.

Fewer Drugs, Shorter Lives, Less Prosperity: 
The Impact Of 
Comparative Effectiveness Research 
on Health and Wealth


John Vernon, Ph. D.
Robert Goldberg Ph. D.
Peter Pitts

Executive Summary

1. Advocates of comparative effectiveness research (“CER”) claim it can be used to reduce healthcare spending because a large portion pays for medical technologies that add little health or social benefit. This assumption runs counter to evidence that medical innovation is associated with lower and greater longevity

2. To the extent that CER is used to reduce the development and use of new drugs, devices, and diagnostics, it is important to estimate what impact the reduced rate of innovation would have on quality of life and life expectancy.

3. Using empirical models that establish a direct relationship between pharmaceutical returns on investment and clinical development costs, we developed an estimate of the cost of CER and it’s impact on rates of research and development (“R&D”).

4. We found that CER could conservatively increase R&D costs by an amount equally to 50 percent of the most complex and time-consuming part of drug development. The added cost would reduce R&D spending by $32 billion over ten years.

5. Based on research that quantified the relationship between increased R&D and greater life expectancy and well being, we conclude that CER would cost Americans 81 million life years and $4 trillion dollars.

6. CER advocates ignore the impact of such requirements at the possible expense of longer life and economic growth.


Many observers maintain that the increase in healthcare spending is the result of the development and overuse of new medicines, devices, and diagnostics. In arguing this case, proponents of this view three assumptions. First, that most of the ‘overuse’ does not improve health or extend life. Second, that CER information about the costs, risks, and benefits of different treatment options, combined with new incentives reflecting the information, could eventually alter the way in which medicine is practiced and yield lower healthcare spending without having adverse effects on health. Over the long-term, the potential reduction in spending below projected levels could be substantial. Third, CER can be used so “that Medicare spending—and perhaps all health spending in the country—could be cut by about 30 percent if the more conservative practice styles used in the lowest spending one-fifth of the country could be adopted nationwide.”(1)

Based on these assumptions the Patient Protection and Affordable Care Act both requires the development of CER and its use in defining healthcare quality and in making coverage decisions. Some of the strongest proponents and contributors to the body of CER “as Congress moves toward substantial reductions in Medicare spending, the program will be under increasing pressure to ensure that dollars are directed to services providing known benefits.” Dr. Donald Berwick, who is administrator of the Center for Medicare and Medicaid Services, put the case for CER more bluntly: “We can make a sensible social decision and say, ‘Well, at this point, we have access to a particular additional benefit [new drug or medical intervention] is so expensive that our taxpayers have better use for those funds.’”(2)  Indeed, the Institute of Medicine charged with developing methods for determining what technologies and innovations should be part of and added to the package of benefits covered under the new health care law. CER will be the major tool for making such determinations.(3)

If these assumptions were true, medical innovation overtime should have led to both a significant increase in spending and almost no result in the worst of both worlds – a large increase in cost and little or no increase in well being and life expectancy with improved quality of life. Previous studies have cast doubt on such assertions. Indeed, a rich body of empirical research demonstrates “that medical innovation has yielded significant increases in life expectancy without increasing medical expenditure.” Frank Lichtenberg has shown that the pace and intensity of medical innovation is associated with lower growth in per capita medical expenditures, longer life and economic growth.

Yale University's William Nordhaus has estimated the value of innovations in medicine during the second half of the twentieth century to be roughly equal to the gains in the economy’s real output, as measured by the Gross Domestic Product (“GDP”) over  the same fifty-year period. The value of improvements in health (e.g. life expectancy) unlike the economy’s real productive output of goods and services is not reflected in national accounting statistics (which when aggregated, measure economic growth and national income, i.e GDP).

Nordhaus posits a simple, and indeed, quite clever question to demonstrate the intuitive reasonableness of his conclusion, which is based on highly technical research methods:

You must forgo either the health improvements over the last half-century or the non-health improvements. That is, you must choose either (a) 1950 health conditions and 2000 non-health living standards or (b) 2000 health conditions and 1950 non-health living standards. Which would you choose?(4)

In another study, one that was prospective rather than retrospective, University of Chicago Economists, Kevin Murphy and Robert Topel, estimated the social-economic value of a 10 percent reduction in the mortality associated with cardiovascular disease and cancer around $10 trillion (roughly $4 trillion from reductions in cardiovascular  mortality and $6 trillion from reductions in cancer mortality). To place this number in perspective, note that the size of the U.S. economy, as measured by the GDP, surpassed the $10 trillion level a few years ago in the early 2000’s.

The productivity of investment in pharmaceutical R&D is remarkably high—perhaps one of the most productive uses of capital in the economy. Hence, our research looked at whether incentives to either maintain or increase investment in R&D would be affected by the need to conduct CER prior to and a condition for coverage of a new medicine.

En route to engaging in this research, we looked at the impact of the introduction of cholesterol lowering drugs called statins on the death rate from heart disease. Advocates of CER argue that requiring its development and use can produce better health at a lower cost. Or, to use the language of the Nordhaus Paradox, CER can lead to better health and (because it would save money) improved non-health living standards.

As Table 1 shows, the development of statins is associated with a significant decline in 10-year death rates among men and women regardless of whether or not they have a history of heart disease. CER proponents would argue that CER could produce similar gains at a lower per patient cost.

The Impact of CER on Medical Innovation

Yet, CER is not generated overnight or at little cost to companies whose products are to be compared. Rather, as with any requirement for additional evidence, there are both direct and indirect costs associated with its production. (This is a point that CER advocates often make when justifying the establishment of a government agency that would set the CER agenda as well as subsidize CER projects.)

In previous research, we have demonstrated how CER regulations have the potential to result in increasing clinical trial sizes (and costs) and perhaps clinical development times; the latter would increase the cost and risk of drug development from an investment, decision-making perspective.(5)

The mathematics of clinical research are the same whether an innovator needs to provide more clinical data before or as a condition of receiving Food and Drug Administration (“FDA”) approval or CER data before or as a condition to being coverage by health plans or government. Either way, requirement for more information will require companies to increase the size of clinical trial samples. CER can increase the complexity of clinical trials, the number of people enrolled in a clinical trial, and the number of studies conducted after a product receives approval. In Europe, “about one-fourth to one-third of the regulatory costs are estimated to go for reimbursement issues.

Further, CER can delay time to market and reduce the rate and extent of technology diffusion. A recent study looking at the impact of CER on market access in Europe and the United States, found the process delayed use by over two years. Moreover, the same study found that CER use, as part of reimbursement decisions in cancer was associated with 60 percent fewer medications being made available than when such reviews were not used.(6)

CER also adds to the risk of investing because it increases the uncertainty about whether a product will enter the market. The uncertainty ranges “from the impossibility of demonstrating the full scope of a product’s value at the time of authorization, through to the impossibility of knowing precisely what will be on the market (and how good it is compared to your product) by the time you get to seeking authorization. As research departments and company finance offers have frequently lamented, there is a profound discouragement to innovation when every new product runs the risk of flat rejection by
regulators at the last minute, because of some unforeseeable arrival of another, arguably superior, therapy just before you seek authorization.”(7)

Unless CER costs nothing, it will make more developmental R&D projects less attractive. That is, with higher expected drug or device development costs, slower access to market and increased uncertainty, there will be fewer R&D projects with generating positive returns (particularly cash flows). Figure 1 shows that as the cost of conducting CER increase the number of R&D projects decline in order to maintain the same rate of return on innovation.

Next, we estimated how much the R&D investment would decline or be “lost” due to an increase in CER costs. We assume that CER would be 50 percent of Phase III clinical development costs. This estimate is based on empirical data of development costs and the recognition that the complexity of clinical trials and number of patients required to do comparative research would increase throughout the FDA evaluation stage.

As Table 2 shows, over a 10-year period, R&D investment would decline by $31.6 billion. Over the long term, R&D would increase but at slower rate due to CER.

CER Impact on Life Expectancy and Dollars

As we discussed earlier, the investment in and consumption of new medicines continually increases life expectancy, quality of life, and productivity. To estimate the social impact of CER, we estimate how much lost R&D will cost Americans in terms of lower life expectancy and dollars. To translate life years into dollars, we use the conservative assumption that a life year is equal to $50,000. While much higher estimates exist, we are opting to be conservative in all of our assumptions so that our estimates may plausibly be viewed as lower-bound approximations. Table 3 shows that the R&D lost due to CER will cost the United States 81 million life years and $4 trillion over 20 years.


Proponents of CER have responded to general criticism of using findings to make coverage decisions by claiming that absent such research, the United States will be unable to control rising health costs because of the unfettered adoption of medical innovations. Some have gone so far as to suggest that “the antagonism toward cost-per-quality adjusted life year comparisons also suggests a bit of magical thinking — the notion that the country can avoid the difficult trade-offs that cost-utility analysis helps to illuminate … It represents another example of our country’s avoidance of unpleasant truths about our resource constraints.”(8)

Our research shows that there is hard evidence behind our concern about using CER to “illuminate” difficult tradeoffs. On the contrary, our analysis suggests that because CER will lead to a loss of innovation, Americans will live shorter lives, and in poorer health than would otherwise be the case. Simply put, we will produce less health. People will be less productive and less able to enjoy life. Living longer will be worthless. (Since people who are in poor health cost more to care for than healthy people even if they live longer, CER will also add to healthcare spending.) That is the "unpleasant truth" CER advocates consistently avoid.



1) CBO Research on the Comparative Effectiveness of Medical Treatments: Issues and Options for an Expanded Federal Role, December 2007.

2) Donald Berwick, June 2009 interview in Biotechnology Healthcare.

3)  http://iom.edu/Activities/HealthServices/EssentialHealthBenefits/2011-JAN-12/Agenda.aspx

4) William Nordhaus. “Irving Fisher and the Contribution of Improved Longevity to Living Standards” The American Journal of Economics and Sociology 64(1): 367-92. 2005.

5) Vernon JA, Goldberg R, and Golec J. Economic evaluation and cost effectiveness thresholds: signals to firms and implications for R&D investment and innovation. Pharmacoeconomics 2009; 27 (10): 797-806.

6) Anne Mason, et al., “Comparison of Anti-cancer Drug Coverage Decisions in the United States and United Kingdom: Does the Evidence Support the Rhetoric?” Journal of Clinical Oncology, http://

7)  Peter O’Donnell, “One Step Closer to the Fourth Hurdle: Drug Evaluation Criteria Could Soon Include an Intrusive Health Technology Assessment.” Applied Clinical Trials, March 1 2010.

8) Jonathan Skinner, NEJM.


About the Authors

John A. Vernon, PhD

Dr. Vernon is a professor in the Department of Health Policy and Administration at the University of North Carolina at Chapel Hill, where he holds appointments in the Kenan-Flagler School of Business and the UNC School of Pharmacy. He is a Faculty Research Fellow with the National Bureau of Economic Research and a Senior Economic Policy Advisor to the Office of the Commissioner at the US FDA.

He has twice testified before the US Senate on pharmaceutical policy issues and advises both government and industry on a wide range of policy issues. He was previously a professor in the finance department at the University of Connecticut and a visiting professor at the Wharton School of Business at the University of Pennsylvania. He also guest edited a special issue of Managerial and Decision Economics on the political economy of the pharmaceutical industry.

Dr. Vernon has published articles in numerous publications, including The Journal of Law and Economics, Health Economics, Healthcare Management, The Journal of Healthcare Management, The National Law Journal, The American Journal of Law and Medicine, and PharmacoEconomics, where he sits on the editorial board.

Dr. Vernon holds doctoral degrees from the University of Pennsylvania's Wharton School in management science (health policy and management) and the University of London in economics.

Robert M. Goldberg, PhD

Robert Goldberg is co-founder and vice president of the Center for Medicine in the Public Interest. (CMPI) Along with Peter Pitts, Dr. Goldberg hosts the popular and controversial blog on the pharmaceutical industry and healthcare, www.drugwonks.com.

Prior to founding CMPI, Goldberg was Director of the Manhattan Institute’s Center for Medical Progress and Chairman of its 21st Century FDA Task Force that examined the impact of the FDA’s Critical Path Initiative on drug development and personalized medicine.

He has written for The Wall Street Journal, The Washington Post, The Los Angeles Times, National Review Online, The Chicago Tribune, The Philadelphia InquirerThe New York Sun and writes regularly for The American Spectator, where he broke the story about Obama Medicare director Donald Berwick’s admiration for Britain’s National Health Service; The New York Post and The Weekly Standard. He is an expert on Medicare reform, comparative effectiveness and FDA’s Critical Path Initiative and the author of many papers including, "Insta-Americans: The Empowered (and Imperiled) Health Care Consumer in the Age of Internet Medicine," and with John Vernon, "Alzheimer's Disease and Cost-effectiveness Analyses: Ensuring Good Value for Money?" and “Economic Evaluation and Comparative-Effectiveness Thresholds: Signals to Firms and Implications for R&D Investment and Innovation.” He is also author of Tabloid Medicine: How the Internet is Being Used To Hijack Medical Science For Fear and Profit. (Kaplan, December 2010).

Peter Pitts

Peter Pitts is President and co-founder of the Center for Medicine in the Public Interest and Partner/Director Global Healthcare, Porter Novelli. Prior to founding CMPI, Pitts was a Senior Fellow for healthcare studies at the Pacific Research Institute. From 2002-2004 Peter was FDA’s Associate Commissioner for External Relations,  serving as senior communications and policy adviser to the Commissioner. He supervised FDA's Office of Public Affairs, Office of the Ombudsman, Office of Special Health Issues, Office of Executive Secretariat, and Advisory Committee Oversight and
Management. He served on the agency’s obesity working group and counterfeit drug taskforce.

His book, Become Strategic or Die, is widely recognized as a cutting edge study of how leadership, in order to be successful over the long term, must be combined with strategic vision and ethical practice. He is the editor of the new book, Coincidence or Crisis, which deals with the public health crisis of counterfeit medicines. He has served as an adjunct professor at Indiana University’s School of Public and Environmental Affairs and Butler University.

About CMPI

The Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.  CMPI can be found at  www.cmpi.org and www.drugwonks.com.

Monday, May 2, 2011

Rep. Michele Bachmann, Serious Medicine Strategist, pointing the way to not only a better Medicare policy, but also a better policy for medical care overall.

Rep. Michele Bachmann (R-MN) showed the political power of the Serious Medicine argument when she led off "Fox News Sunday" yesterday.   Of course we have to control and even cut federal spending, she said, but we have to do it the right way--a cure is cheaper than care. 
Bachmann points the way for Republicans to keep faith with Paul Ryan-type budget cuts AND get re-elected.  As the polls show, people object, strongly, to cuts in Medicare.   But nobody minds if the price of medical care falls.  And that's what technology can do, if we let it happen.  So Ryan + Bachmann is a winning formula.  
But let her speak for herself.  Here's the transcript of her interview with Fox News' Chris Wallace: 
Congressman Michele Bachmann, welcome back to "Fox News Sunday."
WALLACE: Let start with the budget, because you want to go even farther than House Budget Chairman Paul Ryan. You voted for the Republican Study Committee plan which would cut spending by $3 trillion more over the next 10 years and balance the budget by 2020, not 2040, as Paul Ryan does.
Let's take a look, though, at some of the big differences. You want to cut $700 billion more than Ryan from Medicaid. You want to raise the Social Security retirement age for people who are now 59. And you would change Medicare to a voucher system for those who are now 59.
Question -- Paul Ryan doesn't go far enough?
BACHMANN: Well, remember, both Paul Ryan's budget and the Republican Study Committee budget changed the trajectory that we're on. We are on a trajectory of failure right now. So, both Paul Ryan and the Republican Study Committee were making very good responsible choices, they're trying to get America's house to balance. That's what we have to do.
WALLACE: But, if I may, you're saying let's go even further, faster than Paul Ryan?
BACHMANN: Well, remember again, what both of those bills are. They aren't pieces of legislation. They're aspirational documents, which means these are goals that we're trying to come toward.
And one thing that I have heard all across the United States, people want us to get our financial house in order. They recognize we may not have 26 years to get our financial house in order. We may need to do it sooner.
And so, people want to us get serious. People who have been doing this in their own lives and with their own businesses don't understand why Washington is taking so long to get our house in order.
WALLACE: But I just wanted to make it clear -- you stand by your vote for the Republican Study Committee plan. There is nothing in there that you say would go too far?
BACHMANN: Well, remember, what -- again, this is an aspirational document. It's not legislation. It may --
WALLACE: But would you support all of those things we just talked about?
BACHMANN: What I'm saying with that vote is that we have to make decisions. We aren't saying that every single decision that's in that bill, or aspirational document, will be the final result. But what we are saying is we have a conviction, those of us in the Republican Study Committee, those of us who supported Paul Ryan that we thank them and applaud them, that they want to get in the game and they want to make sure that we don't go down in flames with our economy.
WALLACE: Let me ask you about one specific -- and it may be the most controversial in both plans. The nonpartisan Congressional Budget Office says that under Medicare premium support, which both plans would have, seniors would bear a much larger share of their health care costs, than they would under the current plan.
What do you tell people nearing retirement who say I can't afford to pay more of my own health care costs out of pocket? Which is what the Ryan and the Republican Study Committee plans would do.
BACHMANN: And I understand that. I put an asterisk on my support and I put a blog posting up that said just as much. That is my area of concern. I support these bills with that proviso, because there are a number of people across the United States who have exactly expressed the fear that you just mentioned.
I think that's what we need to do with Medicare. It isn't that we are saying that we don't want people to have the health care. It's -- will there be a better way to fund it?
I think there is a better way than the way that the federal government is currently funding the program. Various ideas were put out on the table. Even Paul Ryan said he was open to tweaking his position that he has staked out.
One position that I'm concerned about is shifting the cost burden to senior citizens. Seniors are saying, "Look, I'm not in a position to be able to handle that." I also share that real fear. That's why I put the asterisk out there.
Will there be greater efficiencies? I think so. Will there be choices and options that I think we should offer people? Absolutely.
In the private sector -- I'm a private business person, my husband and I have our own business. What we try to do is offer better solutions all the time for our customers. The federal government isn't keen on doing that.
That's what I think the ingenuity is behind what Paul Ryan wants to do and behind what the Republican Study Committee wants to do, new and different ideas. That isn't the be all and end all. We're only just starting.
BACHMANN: But with the proviso and the asterisk that I agree with the concern for senior citizens and their fear that they will have to assume the cost themselves. One thing we also need to focus on --
WALLACE: Well, let me -- let me ask you this. You're not wedded to the idea of a voucher plan for Medicare?
BACHMANN: I'm wedded to the idea of efficiencies and cost-cutting and savings.
WALLACE: But not a voucher plan?
BACHMANN: How we get there is open to discussion. Plus, the other thing that we should focus on would be cures -- cures for things like Alzheimer's, cures for things like diabetes. It's very expensive to just cover the care for sickness. I'd prefer to see money that we have at the federal level go for cures.
Probably one of the best examples is polio. If you look in the 1950s, polio was a huge issue. And government was forecasting at that point that we might be looking at $100 billion in costs.
Today, polio costs us really virtually nothing. Why? A private charity, March of Dimes, put money in to finding a cure. We all have the little vaccines that Jonas Salk came up with. Thank God. I would like to see that with Alzheimer's and diabetes and others.
Exactly.   If we want to save money on Medicare--and on medical care in general--let's unleash the ingenuity and productivity of the American people.  Not only will we improve health, not only will we save federal healthcare dollars, but we will also create a new industry for Americans to find employment--as well as exports, because the world will want these same medicines.