Category: Resource Allocation

Impact of the Sequester on Health Care: By the Numbers

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By: Katie Booth 

The looming sequester will have a significant impact on health care, including cuts to Medicare, FDA, CDC, NIH, and Affordable Care Act programs. Budget cuts could slow down the drug approval process, impede the tracking of infectious diseases, and lead to layoffs for hundreds of thousands of workers in the health care sector. Read on for sequestration by the numbers…

Medicare:

  • Medicare cut by 2% ($11 billion) (not set to begin until April 1st, 2013, unlike other sequestration cuts, which are set to begin on March 1, 2013)
  • Physicians’ payments cut by 2%
  • Hospital Medicare reimbursement cut by $5.8 billion
  • Hospitals could end up with especially large cuts under the sequester because other parts of healthcare system run on longer term contracts
  • Loss of almost 500,000 health care sector jobs in the first year of the sequester according to an American Medical Association and American Hospital Association study, including job losses for 40,000 practitioners such as physicians and dentists

FDA:

  • FDA cut by 8% ($318 million)
  • FDA public funding cut by $206 million
  • FDA industry user fees cut by $112 million (for an interesting discussion of user fee cuts and the sequester, see Patrick O’Leary’s Bill of Health blog post)
  • Cuts by department (assuming 8% across-the-board cuts): $71 million to Foods, $39 million to Human Drugs, $17 million to Biologics, $11.3 million to Animal Drugs, and $26.5 million to Devices
  • Longer drug approval process is likely
  • Layoffs and furloughs likely
  • 2,100 fewer food safety inspections

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The High Cost of Health Care: Why Some Pay $240 for a $9 Bottle of Pills

Jonathan Darrow 2 Comments

By Jonathan J. Darrow

An earlier post discussed the equivocal efficacy of Propecia (finasteride) as a baldness remedy, ending with the provocative assertion that, efficacy aside, “there is little reason for anyone ever to buy or consume Propecia (finasteride), or any doctor ever to prescribe it, since a much cheaper and identical chemical sold under the trade name Proscar (finasteride), is available.” This post continues the discussion, addressing one small component of the rising cost of healthcare—the cost of finasteride.  It explores why consumers pay as much as $240 for a bottle of Propecia (finasteride) when a $9 bottle of an equivalent, FDA-approved supply of the identical chemical is readily and legally available at nearby stores.

In the exorbitantly priced landscape of prescription drugs, there is at least one low-cost oasis: Wal*Mart.  Though some find reason to criticize the discount store, few would disapprove of the dozens of prescription medications Wal*Mart offers for an unbeatable $4 for a 30-day supply.  Cost-sensitive consumers can purchase everything from blood thinners to antidepressants to antibiotics at this price, while a 90-day supply is only $10 (and this price includes shipping to your doorstep).  A handful of drugs that cannot be sold at $4 per month sell for a still-modest $9.  For the 300 or so drugs on Wal*Mart’s list, this means there is no longer a need for $10 co-pays or snowy treks to the pharmacy in 15 degree weather.  That’s right: the Wal*Mart total price is less than most insurance company co-pays.  Finally, a major industry player seems to have put effective downward pressure on prescription drug prices.  Read More

Finasteride as an FDA-Approved Baldness Remedy: Is It Effective?

Jonathan Darrow 2 Comments

By Jonathan J. Darrow

Questionable baldness remedies have been peddled since the beginning of medicine. According to Pliny (23-79 A.D.), ashes of seahorse could cure baldness.  Almost 2000 years later, the British Medical Association warned the public of the increasing “number of preparations put forward for the cure of baldness,” particularly those which “are not applied locally but taken internally.”  The purported active ingredient? “[H]aemoglobin.”  (see Secret Remedies (1909), page 114).

While the medicinal use of a seahorse or dried blood matter may sound fanciful to modern ears, one has to wonder whether today’s public is any less credulous: Worldwide, consumers have spent over $400 million per year on a modern baldness remedy known by the trade name Propecia (finasteride).  Has science finally triumphed over a medical condition that has persisted through millennia? Today’s consumers might rationally believe that its has, given that Propecia is FDA-approved for the treatment of alopecia (baldness).  FDA-approved remedies must, according to federal law (21 U.S.C. § 355(d)), prove their efficacy in well-controlled, clinical investigations.

Yet one need only walk through a crowded street to see that, if a baldness cure has truly arrived, a surprising number of people have not availed themselves of it. Is Propecia, then, not effective? Let us take a look at the official data. Read More

Accentuate the Negative

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by Suzanne M. Rivera, Ph.D.

While attending the annual Advancing Ethical Research Conference of Public Responsibility in Medicine and Research (PRIM&R) last month in San Diego, I had the opportunity to hear a talk by Dr. John Ioannidis, in which he debunked commonly accepted scientific “truths.”  Calling upon his own work, which is focused on looking critically at published studies to examine the strength of their claims (see his heavily downloaded 2005 paper “Why Most Published Research Findings Are False”), Ioannidis raised important questions for those of us who think about research ethics, and who oversee and manage the research conducted at universities and scientific institutes across the country.

Ioannidis persuasively argued that our system for publishing only studies with statistically significant positive findings has resulted in a bizarre kind of reality where virtually no studies are ever reported that found “negative” results.  Negative results are suppressed because nobody is interested in publishing them.  Editors and reviewers have a major role in this problem; they choose not to publish studies that are not “sexy.”  This artificially inflates the proportion of observed “positive” results and influences the likelihood a scientist will even write up a journal article because she knows what it takes to get published.

But isn’t there an ethical obligation to publish so-called negative results?  In human research, people give their time and undergo risks for the conduct of a study.  Their sacrifices are not meaningful if the results are never shared.  Furthermore, negative results tell us something important.  And if they are not published, some other research team somewhere else may unknowingly repeat a study, putting a new batch of subjects at risk, to investigate a question for which the answer is already known.  Finally, to the extent a study is conducted using taxpayer dollars, the data derived should be considered community property, and there are opportunity costs associated with unnecessarily repetitive work.  Read More

Conference Announcement: Universal Health Coverage in Low-Income Countries: Ethical Issues

The Petrie-Flom Center Staff Leave a comment

The Harvard University Program in Ethics and Health announces its annual conference, Universal Health Coverage in Low-Income Countries: Ethical Issues, to be held in Boston on April 18-19, 2013.

Description

Until very recently, universal coverage (“UC”) has been achieved in the health systems primarily in the wealthiest countries. Though there have been notable exceptions, including Cuba, it has been assumed that most of the world’s peoples would have to wait until economic development in their countries lifted them into the world’s upper class. The successful UC initiatives of middle-income countries such as Mexico, Thailand, and Taiwan demonstrated that UC was achievable without very high national GDP.

Graphic: Three dimensions

Can Universal Coverage be achieved in even the world’s lowest-income countries? China’s recent health reform, which in three years has extended health coverage to 95% of Chinese citizens, including innovative financing initiatives in some of the poorest provinces, has focused the attention of governments of low-income countries on UC. The World Health Organization’s annual report of 2010, Health Systems Financing: The Path to Universal Coverage, identified the prospects for UC in even the least-developed countries and sparked an international effort to pursue this once-elusive goal.

While maintaining a constructive and optimistic frame of mind is essential for progress toward UC, it is necessary also to identify the key ethical dilemmas arising in trying to extend the health system to all with so few resources. The choices are unavoidable:

  • Between goals of UC (including financial protection against catastrophic medical expenses; health; and personal and national overall wellbeing);
  • Between dimensions of UC (who is covered; what is covered; what share of costs are covered); and
  • Trade-offs within and between each of these

Each country will resolve these dilemmas in its own way. Our hope is that this conference will enhance their capacity for ethical deliberation in UC, so that the ethical choices can be made responsibly and thoughtfully.

Dates and Times

Dates: Thursday and Friday, April 18-19, 2013
Times: 8:00 AM – 6:00 PM Each Day

Location

The Inn at Longwood Medical (Best Western Boston)
Longwood Hall, 342 Longwood Avenue, Boston, Massachusetts

Agenda

https://peh.harvard.edu/events/2013/universal_coverage/agenda.html

Registration

No fee. Space limited. Registration required. Please register on our registration website.

At $28,000 a Dose, How Effective Is Acthar?

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By Jonathan J. Darrow

In a well-researched, recent post, Patrick O’Leary addresses the FDA’s efficacy requirements as applied to an old drug, Acthar (corticotropin), that was first approved in 1952 and granted an orphan designation in 2010 for the treatment of infantile spasms. The initial approval therefore occurred before the Drug Amendments of 1962, which instituted a “new” statutory requirement of efficacy (more on this below). O’Leary points out that Acthar’s “grandfather” status does not entirely exempt it from the FDA’s efficacy requirements, and that the drug did survive an efficacy evaluation under the DESI program. But how effective is Acthar?

Neither O’Leary nor the New York Times article on which his post is based dig very far into the clinical trial data accepted by the FDA as supporting the efficacy of the drug as a treatment for infantile spasms, and I was curious to know what the evidence says about Acthar in this regard. Clinical trial data is presented—or perhaps more accurately, “buried”—in Section 14 of a drug’s FDA-approved label; in the case of “H.P. Acthar Gel” (NDA 022432), that label can be found here. What does the clinical trial data reveal?  The section is brief, just half a page, and notes that of “[t]hirteen of 15 patients (86.7%) responded to Acthar Gel as compared to 4 of 14 patients (28.6%) given prednisone (p<0.002).”  Nonresponders were then given the other treatment, with the following results. “Seven of 8 patients (87.5%) responded to H.P Acthar Gel after not responding to prednisone,” while “[o]ne of the 2 patients (50%) responded to the prednisone treatment after not responding to Acthar.”  As the p-value (0.002) indicates, the first figures, at least, are statistically significant.  These figures were also better than I expected: 86.7% efficacy with Acthar does seem much better than 28.6% efficacy with prednisone.  Read More

2012 Global Congress on Intellectual Property and the Public Interest

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By Adriana Benedict

The 2012 Global Congress on Intellectual Property and the Public Interest has just come to a close in Rio de Janeiro, Brazil.  The conference brought together global leaders in intellectual property-related fields like access to medicines, access to knowledge, internet freedom, innovation and development, and open educational resources.  I was invited to participate in the various sessions concerning access to medicines, which focused on two sides of this global health challenge.

The first part of the access discussions focused on best practices and threats in the use of TRIPS flexibilities in developing countries.  Participants emphasized the need to look beyond the usual focus on compulsory licenses to set new priorities for understanding and leveraging less-developed flexibilities such as patentability criteria, patent opposition mechanisms and parallel importation.  An important overarching theme in these discussions was reframing flexibilities as rights, as they carry the same legal status as the intellectual property rights which make them necessary.

The other side of the discussions focused on innovation and research and development (R&D) for the developing world, primarily through recent advances by the WHO CEWG report in promoting a binding convention in this realm.  At the forefront of these proposals is the notion that incentives for innovation should be de-linked from product prices in order to address the needs of the developing world.  Participants emphasized that, moving forward, advocates should be careful to ensure that public and institutional debates on alternative R&D models do not narrow their focus from neglected populations to neglected diseases.

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The Future of Biomedical Research Funding

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By Patrick O’Leary

As I’ve written about previously on this blog, the consequences for the FDA of budget sequestration under the Budget Control Act of 2011 could be fairly severe (as well as raise some interesting legal questions). In a recent Online First piece for the Journal of the American Medical Association (JAMA), Hamilton Moses and E. Ray Dorsey note that sequestration would also have a serious impact–to the tune of $2.5 billion–on the National Institutes of Health (NIH), the primary source of public funding for biomedical research in the United States.

While Doctors Moses and Dorsey acknowledge that the immediate consequences of such a cut would primarily affect young researchers and new applicants for funding, “exacerbat[ing] tensions between large infrastructure projects . . . and small investigator-initiated grants, which historically have been the primary source of new clinical insights,” they also argue that sequestration presents an opportunity to reevaluate our emphasis on publicly funded biomedical research. In their telling, sequestration would be just the most recent step in a nearly decade-long trend of reducing federal funding, a trend that “presents an opportunity to reshape biomedical research.” Moses and Dorsey call for new private sources of research support, ranging from specialized financial instruments like Biomedical Research Bonds to an increased role for public charities and private foundations. The future of biomedical research, they argue, will be built on the private sector, not the federal government.

The challenges of shifting the burden of funding research to the private sector are many, of course. One particularly challenging question is whether private funds could effectively replace NIH’s significant role in funding “basic” research. Bhaven N. Sampat’s new article “Mission-Oriented Biomedical Research at the NIH” in Research Policy provides some context for the scale of the problem. Citing a 2010 study by Dr. Dorsey himself, Sampat notes that although NIH funding accounts for only about a third of U.S. biomedical research funding, “there is a sharp division of labor, with NIH funding concentrated further upstream, on ‘basic’ research than private sector funding” from private sector pharmaceutical, biotechnology, and medical device firms. Although the role of private foundations has grown in recent years, Sampat notes that NIH funding continues to exceed all such funding “by a factor of six . . . .” Assuming we continue to value basic research, the capacity and willingness of private actors to fund such research thus remains a major question mark.

Rationing Legal Services: Can Bioethics Help? My new article forthcoming in the Journal of Legal Analysis

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There is a deepening crisis in the funding of legal services in the United States. The House of Representatives has proposed cutting the budget of the Legal Services Corporation (LSC), one of the main funders of legal assistance to America’s poor, to an all time low in inflation-adjusted terms. Other sources of funding, such as Interest on Lawyers Trust Account (IOLTA) are also way down due to low interest rates. More than 135 state and local organizations providing LSC assistance are now in a precarious position. The community was already decimated by the last round of cuts in January 2011, that led to the laying off of 1,226 lawyers and support staff at LSC-funded organizations, and 81,000 fewer low-income Americans receiving aid. This is all occurring at a time of extremely high unemployment and state budget cuts in services supporting low-income people, meaning demand for many of these services is going up.

The deepening crisis in funding of legal services only makes more pressing and manifest a sad reality: There is and always will be persistent scarcity in the availability of both criminal and civil legal assistance. Given this persistent scarcity, this Article will focus on how existing Legal Service Providers (LSPs), both civil and criminal, should ration their services when they cannot help everyone. To illustrate the difficulty these issues involve, consider two types of LSPs, the Public Defender Service and Connecticut Legal Services, that I discuss in greater depth below. Should the Public Defender Service favor offenders under the age of 25 instead of those older than 55? Should other public defenders offices with death eligible offenses favor those facing the death penalty over those facing life sentences? How should Connecticut Legal Services prioritize its civil cases and clients? Should it favor clients with cases better suited for impact litigation over those that fall in the direct service category? Should either institution prioritize those with the most need? Or, should they allocate by lottery?

These are but a small number of the difficult questions faced by those who have to ration legal services. Very little has been said as to what principles should govern the rationing of legal services. This is surprising given that civil and criminal LSPs are often funded through a mixture of government funding and charitable support in such a way that they should be answerable on questions of justice, and because their decisions whether or not to support a client is likely to have significant effects on that person’s life prospects. Thus, it seems as though the rationing decisions of LSPs deserve significant ethical scrutiny.

In my new article Rationing Legal Services, forthcoming in the peer-reviewed Journal of Legal Analysis (and available for free download in draft form now), I seek to remedy this deficit in the existing literature by engaging in a comprehensive analysis of how LSPs should allocate their resources given the reality of persistent scarcity. Luckily, this work does not have to begin at square one. There is a developed literature in bioethics on the allocation of persistently scarce medical goods (such as organs, ICU beds, and vaccine doses) that I use to illuminate the problems facing LSPs and the potential rationing principles they might adopt.

Reflections on a Recent Study Showing Sperm and Egg Donor as Übermensch/Uberfrau

I. Glenn Cohen 3 Comments

Last week, I sat on a panel at the Mid-Atlantic Law and Society Association, with my wonderful colleagues Kim Mutcherson, Gaia Bernstein, Rene Almeling, and Cynthia Daniels on sperm donor anonymity. [NB: as in most of my work I will use the term “donor” because it is used in common parlance while acknowledging that “seller” is more accurate].

Among other topics discussed, Cynthia shared with us a new paper she has just published in Signs, co-authored with Erin Heidt-Forsythe, the contents of which I found fascinating and I think some BOH readers may as well. They examined the characteristics of 1,156 sperm donors from the top twelve sperm banks in the U.S., and found them to be very much (in my view) that of the ubermensch and uberfrau (in the Nazi conception of the term, not necessarily the original Neitzchean).

Among other findings they note that 44% of sperm donors are above 6 feet tall compared to 10% of American men; 61.9% have healthy weight in Body Mass Index (BMI) terms, as compared to 32% of the U.S. population; 62% had a college or higher degree compared to 26% in the U.S. population and only 2% of sperm donors had high school as their highest level of educational attainment compared to 32% of American men.

They also found that African-American and Latino donors, both underrepresented groups in sperm donor pools compared to the U.S. population, were much more likely to be listed as being on the light or medium skin tones for those groups rather than the dark side, again in variance with the distribution in the general population

They then compared these findings to a similar review of 359 egg donors recruited from eight fertility clinics.

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