Jim O'Leary

Waverly Star

By Jim O'Leary

An e-mail newsletter for and about Waverly people, used with permission in the HLW Herald and on this web site.

 Oct. 7, 2002

Heath care costs ­ a report from the front line

Dear Readers:

My brother, John O'Leary, MD, is 80 years old and recently won the Senior Worker Award for the State of Minnesota, an award which gave him and his wife, Jean, a free trip to Washington, DC, and a chance to eat and visit with our Minnesota political delegation, including my friend, Senator Paul Wellstone.

John, being John, used the occasion to give this message on the hardships caused by the high price of pills to the politicians, who have very much to do with how our quality of life is determined.

I am trying to get this message into "The Congressional Record." Meanwhile, John told me I could use it for a Waverly Star column.

Here it is below.

Jim O'Leary


From the front line

I am a doctor, working 60 hours a week taking care of old soldiers like myself.

Veterans come from all over northern Minnesota to my outpatient clinic because they can no longer afford to buy the pills their own doctors have been prescribing.

They come to our clinic because the highest price the Veteran's Administration can charge for any medication is a $7 copayment. Many come with the same question: "Why are pills so cheap in Canada and so high in the United States?"

There are good answers to this question, so I will go over them step by step:

The first step (backward) toward higher drug prices was taken in 1984, when Congress passed the drug price competition and patent term restoration act.

This act expanded the number of drugs suitable for Abbreviated New Drug Applications (ANDAs). The act also contained provisions giving pharmaceutical manufacturers up to five extra years of patent protection.

Subsequent provisions accelerated the process, by allowing entry of European studies of new drugs. As a result, new drug applications rose to dozens a year.

By 1992, the Federal Drug Administration (FDA) had become overwhelmed by new drug applications. Then the pharmaceutical manufacturers made a shrewd move - they began to lobby for, and finally obtained, legislations entitled the Prescription Drug User Fee Act.

This legislation made the FDA, supposedly an independent federal agency, increasingly dependent upon pharmaceutical manufacturers for funding designated for the approval of new drugs.

As a result of the Drug User Fee Act, the review time for new drugs was cut in half by 1995. New (and expensive) drugs began flooding United States pharmacies, but the FDA found itself with little money to evaluate these drugs once they had come on the market.

At about the same time, the nation's universities, and their schools of pharmacology and pharmacy, were having their own financial problems. As a result, they sometimes yielded to pressure to provide clinical trials of new drugs, in return for generous financial support from pharmaceutical manufacturers.

Even worse, practicing physicians, with little or no formal training in research methodology, were enlisted to do "clinical trials."

Poorly designed clinical trials were a boon to the drug sales people. Critser in Harper's Magazine, June, 1996, was describing Eli Lilly pharmaceutical representatives as the aluminum siding salesmen of the drug industry.

He was unfair to Lilly. Many other manufacturers put Lilly to shame with "educational" banquets, free cruises, and public advertising campaigns that would have made PT Barnum blush.

There are examples of overpricing in almost all classes of drugs on the retail market. Don't misunderstand what I am describing - just as we understand all babies are beautiful, we must understand all drugs approved by the FDA are "good."

But drugs differ in bioavailability, dosing intervals, palatability, efficacy, side effects, and price. Many have similarities but some drugs are, in fact, better than others.

The important fact is that too many drugs are being marketed to customers who can't tell one drug from another. A reliable source of information on this point is the facts and comparison web site at www.drugfacts.com.

With the above as background, let me cite two examples: Celebrex (celexcoxib) came to the market in 1999 as the first aspirin like (anti-inflammatory) drug that wouldn't upset your stomach. It was FDA approved after short (six months) clinical trials and then intensively advertised.

By 12 months, the stomach data weren't holding up and some competing drugs were looking better. Vioxx (rofecoxcoxib) had shown 24-hour activity and, now, a recent analysis (The Drug Advisor, volume 1, number 3, March 2002 Facts and Comparisons) gives the newest, Bextra (valdescoxib), the designation of "best by a close call over the other three."

Another example of "best by a close call" could be a drug which was approved by the FDA in 1989, Prilosec (omeprazole).

This is another very expensive pill, but when the Facts and Comparison staff compared it to the two newer drugs in the same chemical class, it was not rated as highly.

Now rumor has it that AstraZenica, the company which produced Prilosec, is submitting an over the counter (OTC) application, and that is why it is shrewdly promoting its other product from the same class, Nexium (esomeprazole). This maneuver will allow AstraZenica to retain its patent protection while selling Prilosec over the counter.

Aside from this sort of patent manipulation, another reason why prescription drugs are less expensive in Canada than in the United States is that Canada has a more structured program of drug evaluation.

For details, see their brochure entitled Controlling the Prices of Patented Medicines in Canada. This is available through the website at www.pmprb-cepmb.gc.ca/english/07_e/07fre_e.htm, and click on "Controlling the Prices of Patented Medicines in Canada (PDF)."

The home page for their patented medicine prices review board is located at www.pmprb-cepmb.gc.ca/english/index_e.htm.

But the main reason why drugs in Canada are less expensive is that Canada has price control. This means that Canada buys on the international pharmaceutical market as one customer.

The size of the customer determines market share, and market share is a major factor in bidding for lower prices on the international wholesale drug market.

The United States has to pay higher prices because our buying power is split between pharmacy chains, HMOs, pharmacy benefit managers, etc., etc.

Don't misunderstand me on this point - I am not suggesting the United States could adopt price control. Price control is one step removed from socialized medicine and socialized medicine has not, and probably will not, be popular with the majority of voters.

To be continued . . .


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