Healthy Skepticism Library item: 19975

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Iglehart JK
An Industry Under Siege Mounts Counterattack
Health Affairs 2004 00 00; 23:(1):7
http://content.healthaffairs.org/content/23/1/7.full

Abstract:

The pharmaceutical industry faces a greater set of challenges today than ever before in its very successful history. Stakeholders from almost every conceivable corner are leveling criticism at the industry for the prices of its products, for its reliance on the United States to finance (through these higher prices) most of its research, and for its resistance to change ways that have long made it the most profitable sector in the U.S. economy. These and other complaints have become front-page news and prime-time television fare, but the industry is certainly not taking the criticism without strong rebuttals on multiple fronts. The most visible recently was delivered by Sidney Taurel, CEO of Eli Lilly and Company, at the National Press Club. Taurel asserted: “Congress is weighing several legislative proposals that we believe have the potential to decimate innovation in pharmaceuticals.” Segments of the public and policy communities seem dismissive of the fact that pharmaceuticals are one of the foundations of modern medicine. About six dollars are spent on physicians and hospitals for every dollar spent on pharmaceuticals, yet without these products, the efficacy of the care provided would be greatly diminished.

There is no question that health care (whether in the form of hospital or physician services or pharmaceuticals) as it is delivered and financed in the United States is far more expensive than in any other country. (See Gerard Anderson and colleagues, May/June 2003, p. 89, for the latest international spending comparison). Medical spending continues to rise at rates that greatly surpass the growth of the economy, as Katharine Levit and her colleagues report (p. 147). But, at the same time, privately insured Americans demanded relaxation of the stringent controls imposed by managed care plans, only to refuel the fires of medical inflation while providing greater choice of providers. Clearly, new balances must be struck.

In an effort to shed greater illumination on the place of pharmaceuticals in the U.S. health care system (not to mention their vast global role), this volume is largely devoted to papers that address key issues facing the industry. Partial support for its publication was provided by the National Pharmaceutical Council, which we hereby acknowledge with gratitude. We also acknowledge the role of Peter J. Neumann of the Harvard School of Public Health, one of the journal’s contributing editors, who served as an editorial consultant on the project. We commissioned a number of the nation’s foremost policy analysts and researchers to write these papers. Unsolicited manuscripts that matched the theme further spiced the mix, making for a large but timely issue. All were subjected to the scrutiny of external review, and several failed this crucial test. One paper titled “Prices and Availability of Pharmaceuticals: Evidence from Nine Countries,” by Patricia Danzon and Michael Furukawa of the University of Pennsylvania, proved so timely to the debate over the reimportation of drugs that we expedited its publication by posting it early on our Web site, www.healthaffairs.org. Another Web Exclusive by Daniel Carpenter, Michael Chernew, Dean Smith, and Mark Fendrick, dealing with the drug review process, was published December 17.

The lead paper by Iain Cockburn discusses the consequences of dramatic changes that have occurred in the industry’s structure. Following, Tom Croghan and Polly Pittman dissect the incentives that pharmaceutical companies operate under to produce their current array of drugs, and J.D. Kleinke makes the case for the adoption of a value-based rather than a price-based approach to pharmaceutical spending. Additional work covers the politics and processes of drug review, the industry’s complex relationships with governments and universities over the commercialization of the life sciences, a discussion of the new world of personalized medicine, and a great deal more.

The new year brings with it major new enhancements to the online version of Health Affairs. With the assistance of Stanford University’s HighWire Press, we have greatly improved our search engine, enabling readers to more readily access the journal’s complete twenty-two-year archive. In addition, we now have the ability to customize e-mail alerts on health policy topics of readers’ choice and link to full-text citations of some 350 other journals. Although we have no plans to abandon the print journal, we recognize the Web as a powerful tool for organizing and sorting the treasure trove of information within the journal. I encourage all readers who have not yet visited Health Affairs Online to try it out and activate the online portion of their subscription. Readers who stick with print only are missing out on the original, peer-reviewed articles that we publish exclusively on the Web every week.