Thought Leader: Better Business: Balancing Benefit, Risk, and Cost - Pharmaceutical Executive

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Thought Leader: Better Business: Balancing Benefit, Risk, and Cost
Losing track of patient welfare and failing to address important safety problems isn't just bad science and bad ethics, it's also bad business.


Pharmaceutical Executive



Jerry Avorn, MD
The pharmaceutical industry has many shrill critics—not just Marcia Angell. Recent titles include The $800 Million Pill: The Truth Behind the Cost of New Drugs and The Big Fix: How the Pharmaceutical Industry Rips Off American Consumers. Somewhere on that bookshelf, you may also find Powerful Medicines by Dr. Jerry Avorn. Though some lump the book with the rest, we think Dr. Avorn distinguishes himself through his thoughtful and measured approach to the issues facing the industry today. His critique is one the industry can learn from.

Pharm Exec: Where did you get your start? Avorn: I attended Columbia College during the heady 1960s, and wrote a book about the student movement there called Up Against the Ivy Wall (Atheneum, 1968), then went to Harvard Medical School, completed my training in internal medicine in the Harvard system, and never really left the neighborhood.

Are risks, costs, and benefits out of balance in today's healthcare paradigm? They're somewhat out of balance at present in two ways— benefit versus risk, and cost versus effectiveness. The benefit-risk issue is illustrated by the ongoing COX-2 crisis. It's becoming clear that the benefit of Vioxx, with efficacy about the same as aspirin or ibuprofen, wasn't worth its risk of stroke or myocardial infarction, even if its modest gastroprotective properties are taken into consideration.

The whole coxib story underscores a point I tried to make in Powerful Medicines: Our capacity to measure risk just isn't as good as it needs to be. As far as cost-effectiveness, again, the COX-2 drugs are the poster child: The way these drugs were used, the billions of extra dollars Americans spent on this class, did not buy a comparable amount of better pain relief or safety.

How can the situation be remedied? Who'll pay for it? We need an ambitious, effective program to measure comparative benefit and comparative risk for the drugs we use. The nation—even the government itself— manages to pay billions of dollars for suboptimal choices of drugs.


Powerful Excerpts
Senator Grassley [R-IA] observed that Medicaid spent about a billion dollars a year on Vioxx. So the money is there, even within the Department of Health and Human Services. We just need to capture a tiny fraction of that often irrational drug spend to inform our choices about how to spend the other ninety-plus percent more rationally.

The public increasingly blames pharma for higher healthcare costs. Do you? Drugs are only about eleven or twelve percent of the nation's healthcare spend, and most of the cost—and excess—by definition is in the other eighty-eight percent. That said, however, the striking rate of rise of the drug spend has caught people's attention, especially because so much of it is out-of-pocket. The huge doses of in-your-face DTC advertising haven't endeared the industry to most citizens either.

What reforms do you recommend to the industry? 'd like to see a return to the Roy Vagelos approach to pharmaceutical management, in which companies were driven more by science than by marketing, as I'm afraid [the opposite] is now the case. Ironically, that approach seemed to work better for the companies as well, in both drug discovery and public respect. The latter has an important effect on what politicians do.


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