Map of life expectancy at birth from Global Education Project.

Friday, August 26, 2005

The business page

In case you haven't caught on yet, the place to read the medical and health science news in your daily paper is the business section. It's not important because of how it may affect the health of the general public, but because of how it may affect stock prices, hospital finances (even though many are technically non-profits, they are huge businesses whose executives are often paid salaries of well over $1 million), employer costs, taxation, etc. In other words it's all about money.

Today's Boston Globe business section has five health care related stories, which is about average. An FDA advisory panel has decided that medicinal leeches and maggots should be available by prescription only. They aren't going to require new approval applications for the critters as medical devices, but they do recommend stricter scrutiny of suppliers. So this may not be a good time to try to get in on the ground floor of the maggot business, you'll face significant capital requirements. (For those of you who don't know, maggots are used to clean dead flesh out of ulcers and traumatic wounds. Leeches are used to drain blood from appendages after surgical reattachment. No comment required.)

In a somewhat more urgent story from a business news standpoint, Merck is facing about 5,000 individual lawsuits over Vioxx. My editorial:

On the one hand, in the absence of effective regulation and any more rational method of compensating victims and taking care of the injured but not yet dead, the civil tort system will discourage companies from concealing adverse information about their drugs and marketing products they know are dangerous, and it will provide money to some victims and lots of money to lawyers. However, this is not a very good solution. Most of the time, drug companies will get away with irresponsible marketing and slanted research because they won't be as blatant or careless as Merck has been. And most victims won't be cared for or compensated. Even in this case, some will win their trials and some will lose, and the compensation people receive will vary wildly, without any particular rhyme or reason. We need a better way.

Guidant, the company that is in hot water over defective implantable defibrillators that it decided not to inform patients about (see below), has been cleared for sale to Johnson and Johnson by the EU, but they're still waiting for U.S. regulatory approval. The consolidation of the medical device and drug industry continues apace. What will this mean for prices, and for the political power of the industry? That's probably worth discussing.

California is suing an additional 37 drug companies for bilking its Medicaid program by providing false information about the costs of their drugs. The companies include Amgen, Wyeth, Abbot Labs, and GlaxoSmithKline. But we know they're really in business to benefit humanity.

Finally, Massachusetts hospitals have applied to install 10 additional PET scanners, at a cost of $3 million each. Regulators fear that hospitals will be under pressure to recover their costs by encouraging doctors to order unnecessary tests. Proponents claim the machines can save money by supporting better decision making, and avoiding unnecessary surgery. Who knows? We always have claims that new medical technologies will improve efficiency and save money, but empirically, we know that overall, over time, they increase medical spending.

Is it worth it? Arguably yes, from the point of view of the individuals who get access to high tech treatments. But only a narrow segment of humanity does. Spending the same money to reduce poverty and inequality, provide basic preventive services, combat marketing of junk food and tobacco, prevent alcohol abuse, and do a few other less glamorous things like providing universal health care, would do much more to improve the public health.

I hope that's enough for y'all to chew on for a while, I probably won't post again until Sunday.

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