When tomorrow never comes... the rising cost of health care

"This weekend, I had the opportunity to read Matt Miller’s outstanding upcoming book, The Tyranny of Dead Ideas. In his chapter on the folly of employer-provided health insurance, Miller gives us today’s startling factoid: 'It’s crazy but true: Starbucks spends more on health care than on coffee; General Motors spends more on health care than on steel.'"

Daniel Pink

What is the world coming to when the cost of basic health care is so exorbitant? The National Coalition on Health Care has some startling facts:

"In 2007, total national health expenditures were expected to rise 6.9 percent — two times the rate of inflation.1 Total spending was $2.3 TRILLION in 2007, or $7600 per person. Total health care spending represented 16 percent of the gross domestic product (GDP). U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.2 TRILLION in 2016, or 20 percent of GDP."

When we look back at Starbucks and GM, we find that in 2007, employer health insurance premiums increased by 6.1 percent, which is two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,100. For many in more expensive cities that will only cover a family of two people.

Washington's focus on drug costs is in many ways displaced, because like earmarks it represents a very small proportion of the total budget. Meanwhile, the health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud. These problems significantly increase the cost of medical care and health insurance for employers and workers and affect the security of families.

But is anything done about this excessive waste and bloated administration?

Rising medical costs correlate to drops in health insurance coverage. That's not a good thing because ultimately, people who do drop coverage and then get ill will end up paying more for their health care if something goes wrong. If you get cancer or need a bone marrow transplant, it could wipe you out.

There is no doubt that health care reform is essential, the issue is what's the best way to go about it? In the current Presidential election, the two candidates have very different approaches to the problem. McCain is offering a $5,000 tax credit towards the cost of the annual health care plans. Obama believes that health care is a right and people should not be denied access, while there should be stricter rules for insurers.

In the McCain approach, one key detail missing from the plan is whether the tax credits created by eliminating employer-based tax benefits would keep up with the cost of medical care. This plan favours the young, fit and healthy. Those who are older, unfit and have a family history of medical problems will likely end up with higher costs.

In contrast, cost is the key detail missing from the Obama health reform plan. The campaign has not said how large the tax would be for businesses that opt not to offer insurance, or how small a business would have to be to be excluded from the requirement. If the payroll tax is too low, say 6 percent, many businesses may opt to pay it instead of offering insurance, sending their employees into the public program and boosting federal costs. Overall, it sounds very similar to the successful MA health care plan introduced by then Governor Mitt Romney, where no one was denied coverage, but the plan cost was adjusted according to people's means.

Either way, whichever candidate gets in will have to grapple with many of the same issues and the inertia that has confounded health reform for decades.

Related articles by Zemanta

• Washington faces tough choices over health care: Bernanke
• Perspective On Health Care Reform
• Obama, McCain Shift The Health Care Debate
• Health Care Costs to Double Next Decade

Medicare Part D - new data available

Academy Health has published a useful report on Medicare Part D and what information is available as part of the CMS Medicare Part D claims data.

You can download the report here.

New tools for finding well organised information on cancer and biotechnology

One of the things I hate most about traditional search engines such as Google, Yahoo and Ask Jeeves is that they just return pages and pages of disorganised information on whatever topic you type in the search box.

There are some cool alternatives out there that organise the information by topic so that you can find what you want much more quickly and easily.

For example, I took two of these new search engines and did a search on 'biotechnology'. Here's what they produced compared to Google:

Google

Kosmix

Mahalo


What a difference!

I've started using Kosmix for more organised searches on diseases and medical related items. Try typing in something like lung cancer or breast cancer and see how well they order the results. I'm not a big Wikipedia user because some of the science and technology pages aren't that accurate - they're only as good as the writer, but Kosmix allows you to search for a wider field for interesting and accurate information, right at your fingertips.

Looking for new ways to find the latest stuff on cancer?

Or indeed any science and medicine topic?

This is one very cool online tool:

Medworm

Lilly to acquire SGX Pharmaceuticals

In a surprise announcement, Lilly declared today that they have signed a definitive merger agreement with SGX Pharmaceuticals in an all-cash transaction. Under the terms of the agreement, Lilly will acquire all of the outstanding shares of SGX common stock at a price of $3.00 per share, for a total value of approximately $64.0 million. Lilly were one of the existing companies who had partner deals with SGX.

SGX is a biotechnology company based in San Diego. It is focused on oncology drug discovery and development.

The acquisition will give Lilly an opportunity to integrate SGX's structure-guided drug discovery platform into its drug discovery efforts. It will also give them access to FAST™, SGX's fragment-based, protein structure guided drug discovery technology, and to a portfolio of pre-clinical oncology compounds focused on a number of high-value kinase targets.

One of the promising agents, SGX393, may be active in Gleevec resistant T315I mutations in CML, which are also resistant to other therapies currently available including Tasigna (nilotinib) and Sprycel (dasatinib).

The acquisition, if successful, will give Lilly a promising oncology pipeline for the future.

Source:

Lilly

Merck buys theatre advertising for cancer vaccine ads

Has anyone seen the ads in US cinemas for Gardasil?

Apparently, Merck purchased ad time from May 30th through June 26th. The commercial will run during the trailers before SATC but also at screenings of The Incredible Hulk, Get Smart, The Happening and You Don't Mess with the Zohan among others. They're all films that will potentially attract the 19 to 26-year-old females, the likely target for the vaccine shots.

Merck is also hoping the Food and Drug Administration will soon approve Gardasil for women into their 40s, so perhaps the SATC campaign is also intended for them?

The company plans to file for the FDA approval of Gardasil for young men and boys who can carry and transmit HPV. Given the selection of summer movies Merck's marketers have made, I suspect the commercials are an attempt to raise awareness among guys as well.

Interesting approach.

Meanwhile, GSK are winning the battle for Europe, snapping up the tenders with it's cervical cancer vaccine, Cervarix. Unfortunately, Cervarix doesn't protect against genital warts although Gardasil does.

If this doesn't put people off smoking....

I don't know what will!



Source:

NEJM

Cervical Cancer: could Pharma companies do more?

Cervical cancer is linked to the human papillomavirus (HPV) and can be prevented by innoculation with a vaccine or detected early by Pap smears. It is not very common in the USA or Western Europe because the introduction of frequent pap smears has reduced its incidence quite considerably.











It is, however, much more common in the developing world. For example, it kills 33,000 women in Latin America and the Caribbean a year, according to a new study. Based on the western experience, better screening and an affordable vaccine for girls could reduce the deaths, which could increase to 70,000 a year by 2030 if nothing is done, according to a recent study.

The study was sponsored by the Sabin Vaccine Institute, the Pan American Health Organization (PAHO), the Centers for Disease Control and Prevention and others. It compiled 15 years of research and is the first major assessment of the effects of the human papillomavirus in the region. The goal of the study was to estimate the burden of the disease on the region and to calculate how many years of life could be saved in each country with Pap smears or affordable vaccines. It is the first major assessment of the effects of the human papillomavirus in the region.

The virus, which is sexually transmitted, and causes most cases of cervical cancer, infects 20 percent to 30 percent of young women in the region, as well as 20 percent of young men.

Not enough cases are detected early, however, so it is a common cause of cancer death in developing countries. In the United States, where Pap smears are a routine part of medical care paid for by health insurance, just 2.5 percent of all cancer deaths among women are from cervical cancer. In Haiti, 49 percent are. In Latin America, the countries with the highest rates were Haiti, Bolivia, Paraguay, Belize, Peru, Guyana, Nicaragua, El Salvador, Colombia and Venezuela (see map above).

A vaccine that prevents infection by the most dangerous strains of the virus costs $360 in the United States, far more than the health systems of most Latin American countries can afford.

"We found scenarios where from an economic perspective, widespread adoption of an HPV vaccine makes sense, but we also wanted to be clear that even at a reduced price, the vaccine would have significant financial implications for national health care systems," said Cuauhtémoc Ruiz Matus, Chief of the Immunisation Unit, PAHO.

Recently, the former Merck CEO, Roy Vagelos noted at a conference that he wished more companies would do more philanthropy. Merck and GSK are two companies who market cervical cancer vaccines (Gardasil and Cervarix). I wonder what efforts they are making globally in Latam and Africa where the disease is very prevalent and preventable?


Sources:

PAHO
NY Times
Executive Summary of the study (downloadable report)

Exelixis - an interesting oncology biotech

There are a number of small biotechnology companies focusing on developing novel oncology compounds, but one that caught my eye recently was Exelixis, in South San Francisco.

Exelixis have quietly built up a decent sized portfolio focusing on oncology, mostly phase I and II small kinase inhibitors, which target a particular protein defect such as VEGF, EGFR, IGF-1R etc.

Rather than take on a large commitment to building a sales and marketing organisation, they have chosen to license the products to big pharma/biotechnology companies such as GSK, BMS and Genentech. Their strength is in research and development, so that's what they are focusing on. If the products do well, they will reap the benefits in terms of royalties and milestone payments, creating more cash to invest in R&D.

One to watch out for.

Amgen oncology franchise in free-fall?

Amgen announced their 1st quarter performance last week, and the results aren't pretty.

Sales of their growth factor franchise are suffering as Aranesp and Epogen revenues continue to decline since the FDA reviewed the risks associated with such therapies in March 2007.

There was a sequential (4Q07 to 1Q08) drop of $66 million and $84 million respectively. The FDA has yet to announce its new guidelines (read restrictions) on the use of the drugs on certain cancer patients who get fatigued from chemo, which could put even more pressure on sales. This is not good news for the already disgruntled shareholders.

The company is currently going through a major cost cutting and restructuring program. New product launches are needed to boost confidence and enthusiasm. The next likely candidate for approval, denosumab (D-Mab) for fracture data in postmenopausal osteoporosis, may contribute to the bottom line but whether it has the potential for blockbuster status remains to be seen.