Economics of Healthcare
Chat Highlights
February 5, 2003

Norma Devine, Editor

On Wednesday, February 5, 2003, Dr. Rick Wilson, a glaucoma specialist at Wills, and the glaucoma chat group discussed "Economics of Healthcare."

Moderator:  Let's start with the cost of medications.  Why do they cost so much?  

Dr. Rick Wilson:  There are many reasons, so it's hard to know where to start. The first is the high cost of bringing a product to market.

P:  I used to work for a major pharmaceutical company.  One reason for high prices is the very high cost of research and testing.

Moderator:  What are some factors involved in bringing a drug to market?

Dr. Rick Wilson:  In order to develop a good drug, companies have to look at literally thousands of compounds, then spend years researching them, and then proving their effectiveness.  Since the patents become effective when the drugs are submitted to the Federal Drug Agency (FDA) -- usually, long before a drug gets to market -- the company has only a small window of time to recover the cost of investment and make a profit.  

P:  My wife is a senior.  We were paying a lot for prescriptions.  Then we discovered two pharmacies in Canada, one suggested by our glaucoma specialist in New York, where the cost was half what we paid in the U.S.

P:  Some of the major drug companies will no longer sell to Canadian pharmacies and wholesalers who permit cross-border sales to the U.S.

P:  The FDA says buying drugs in Canada is against the law, so we expect sooner or later to be forced back into the high-priced U.S. market.

P:  How does Canada manage to keep the price of drugs lower than the U.S.?  

P:  In Canada, we have a board that examines drug costs and prices, and sets an upper limit on prices, based on a fair return for investment.

Dr. Rick Wilson:  I have participated in many drug studies.  When timolol was introduced in 1979, it took two long moving vans to carry the paperwork to the Federal Drug Agency to try to gain approval.

Dr. Rick Wilson:  Americans pay for the research cost for the rest of the world.  If we did what the Canadians and Europeans do in terms of pricing medications, there would be no more research. We would stagnate where we are now -- no new drugs.  With my arthritis, I can't wait for new and better medications.  So I can see the drug companies' side, as well as the consumers' side. 

(Editor's note:  Vioxx, a drug for osteoarthritis, was in clinical trials four years and involved 10,000 study volunteers.  Source:  CenterWatch, 2000.)

P:  I hate to be contrary, but from the Canadian viewpoint, Americans are obsessed with private enterprise, and for maximum-profit health care at the expense of more efficient, less costly, publicly funded health-care systems.  Government control over profiteering and ensuring that no citizen has to go bankrupt to cope with catastrophic health problems should be part of any civilized, compassionate society's public policy.

P:  We may be profit oriented, but I would prefer that to the inefficiencies of a total government-provided health care system.  When I want treatment, I want it now, and not six months from now.  I'll live with the few abuses we have and benefit from the terrific record of drug discovery we have made in the U.S.

Dr. Rick Wilson:  Since I can afford it, I'm with you.  I want new medicines as soon as possible.  It is not fair, however, that we have to fund the vast majority of the world's pharmaceutical advances.  If I didn't have much money, I would more likely wish to have access to the medicines available affordably.

P:  I, too, get angry about high prices.  I am on Medicare and I pay for medications myself.  It makes a huge dent in my limited budget.  But so be it.

P:  In Canada, I had my first visual field test within a week of being a suspect, and a second one within three weeks.  

Dr. Rick Wilson:  Yours is not the usual tale I hear from Canadians and their doctors.

P:  I'm in Vancouver, British Columbia. That's why I have faster access to doctors than Canadians in rural areas.  

Dr. Rick Wilson:  The best system would be something in between the Canadian and the U.S. systems, where patients didn't have to wait so long for a total hip replacement or a cataract operation in Canada, and more emphasis was placed on public health in the U.S.  Americans spend far more of their gross national product for health care than any other country in the world, but end up around eighth in the world in general health in all age groups up to the 80's.  The enormous amount of money spent on the elderly pushes us up to the top.

P:  Some drug companies give medications on the basis of compassionate use, especially for conditions like glaucoma, diabetes, etc.

P:  How does a patient qualify for that? 

P:  Have your doctors send in a form they can get from the drug representative.

Dr. Rick Wilson:  Almost all the major ophthalmic companies do give medications on a compassionate basis.  All the patient has to do is show proof of financial need.  A copy of a tax return usually suffices. 

P:  Are more precautions taken to protect consumers in the U.S. than elsewhere in the world?  

Dr. Rick Wilson:  Drugs in the U.S. have to pass through many more hoops  than in Europe.  That precaution spared Americans the problems of thalidomide, but means people in many other countries get new drugs sooner.  Then there are the legal costs.  I have a friend who works in research for Smith-Kline, and a friend of his who is a lawyer for American Home Products.  Only in America does a company's stock price go up when it fires 10,000 workers, and when the company introduces a new drug, the price of its stock goes down because of the threat of  class-action lawsuits.

P:  Why do pharmaceutical companies advertise drugs on television? 

Dr. Rick Wilson:  The companies are trying to raise awareness of their medications so that patients mention them to their doctors, who are more likely to give in and prescribe the medication the patient asks for. 

P:  Some of us may not have adequate health insurance coverage, or may lose it at some time.  Physician visits can be costly, too.  Under such circumstances, how often do you feel a glaucoma patient should see an ophthalmologist?

Dr. Rick Wilson:  It makes a great deal of difference how severe the glaucoma is and how well-controlled it is.  Some patients on medicine who have little damage and steady pressures I see every six months.  I see most patients every three to four months.  Some I barely want to let out of my sight. 

P:  Are there any lifestyle things, such as diet and exercise, that a glaucoma patient can do to keep medical costs down?

Dr. Rick Wilson:  We Americans are by far the fattest population in the history of the world. Weight loss to a healthy weight, combined with exercise at least 20 minutes four times a week (more is better) lowers IOP, blood sugar, blood pressure, stress, improves arthritis, and so on.  Aren't you glad you asked?  Smoking has nicotine, which is a vasoconstrictor and is harmful for blood circulation to the eye as well as the body, not to mention the effect on lung and bladder cancer.

P:  Increased longevity also places an economic burden on the health care system.  Care to comment?

Dr. Rick Wilson:  I have forgotten the numbers, but as I remember, most of the money spent on a person's health care is spent in the last year of life.  The older the patient, the more likely health problems will be important, with the accompanying expense.

P:  Are glaucoma medications so expensive because their patents haven't yet expired? 

Dr. Rick Wilson:  Yes.  Timolol is fairly inexpensive as is pilocarpine, epifrin and the old glaucoma meds.  Unfortunately, drug stores mark up generic medications more than patent medications, so the difference between them is not as much as it should be.

P:  Medical malpractice is in the news lately.  I have heard that malpractice insurance for doctors has increased a great deal in the past couple years and now doctors cannot afford to stay in practice in some states.  Why is there such an increase in medical malpractice fees and is this increase affecting eye doctors?

Dr. Rick Wilson:  There are two main problems.  One is the American system of justice.  Of the money doctors pay for malpractice insurance, over half goes to lawyers and the courts and not the people who were injured. The other problem is the jury system.  Doctors are not tried by their peers, as the Constitution suggests they should be.  

P:  Do doctors serve on juries?

Dr. Rick Wilson:  My fellows are called in for jury duty all the time.  Never once have they been picked, because the plaintiff's attorney felt that they would be too hard to sway and would influence the rest of the jury.

P:  It seems that a lot of medical malpractice cases in Pennsylvania are tried in Philadelphia.  Why is that?

Dr. Rick Wilson:  Lawyers try to get malpractice cases from all over the state tried in Philadelphia because our unsophisticated juries are easily swayed to feel sympathy for the plaintiff, thinking that it is just the insurance company paying.  A study by the anesthesia society looked at a huge series of anesthesia cases and identified which ones they thought involved malpractice.  The majority of the people injured did not sue, and if they did sue, may not have won.  However, the majority of the those who did win had not suffered malpractice, but a maloccurrence, that is, a bad outcome that was linked to the nature of their disease.  In other words, the people who should have been compensated were not, and the ones who were compensated often should not have been.

P:  A study in 2001 by the Royal College of Ophthalmology in England found that the "number of cataract procedures has continued to rise dramatically, whereas the number of trabeculectomies has fallen progressively 37% and 53% in the last 4 years."  What factors could account for the trend? And what are the implications for the future management of glaucoma patients?

Dr. Rick Wilson:  We have gotten three new types of medications over the last several years, and medical care has pushed surgical care to the back seat.

P:  I've heard that insurance companies take money from the premiums we pay and invest it.  The investments haven't been good, hence the rise in premiums.

Dr. Rick Wilson:  True, but in Pennsylvania, the insurance companies have put huge sums of money aside, far more than they need to safely protect themselves from a downturn.  Insurance companies are far less efficient at putting money to use to pay for health care than Medicare.  The insurance companies take approximately a third of the money to pay for their staff and for dividends to their stockholders.  Medicare does better.

P:  Very informative session, Dr. Wilson.  Thanks.

Dr. Rick Wilson:  We may want to suggest to our congress people to extend the patent life on medications.  If companies feel they have a longer time to earn their investment back, they may not charge as much.

End of highlights for February 5, 2003.

On February 12, Dr. Wilson discussed "Glaucoma Around the World" in the Chat room. Click here for highlights of that meeting.

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