Fewer Cents, More Sense

The US healthcare system may be broken, as such sages as Michael Moore suggest, but it's not likely to be fixed as long as our domestic debate remains stuck on the cost of prescription drugs. Meanwhile, obesity and diabetes are becoming national epidemics. Talk about sicko.

Peter Pitts

Imagine American healthcare spending as a dollar bill divided into 100 pennies. How many pennies do you think represent spending on prescription drugs? Sixty? Eighty? Wrong. The answer is 10.5. The other 89.5 represent everything else—from doctor visits and hospitalization to administrative charges and insurance. (If this is news to industry professionals, imagine how enlightening civilians might find it.)

Put another way, which is the bargain: a hospital stay at about $7,500 a day, or drugs that help keep you healthy and productive at about $65 a prescription? Clearly, fewer cents make more sense.

Yet these and many other facts backing pharmaceuticals as a sound healthcare investment have been twisted to suit the agendas of politicians, pundits, and other competing stakeholders. It goes relatively unreported that insurance companies continue to increase their monthly premiums without really explaining why. The industry claims its costs are increasing because prescription drug costs are busting their budgets. But prescription drugs account for only a small part of monthly insurance-premium hikes. From 1998 to 2003, insurance companies increased premiums by an average of $104.62 per person. During that same period, drug costs rose by $22.48.

Still, it's true that a majority of Americans with private health insurance are spending more for drugs—not only because they're taking more but also because their insurance is paying less. And it's no surprise that with rising pharmacy co-pays—the only healthcare costs that many of us actually see and feel—we tend to swallow the lie that increased healthcare costs are Big Pharma's fault.

Should we blame "Big Insurance"? Out-of-control out-of-pocket expenses cause many patients to stop using prescription drugs for controllable chronic conditions. The unfortunate result is that visits to the ER have jumped by 17 percent and hospital stays have risen 10 percent. And a new Integrated Benefits Institute study shows that when employers shift too much of their healthcare costs to employees, the companies lose more than they save, through absenteeism and lost productivity.

Where the Healthcare Dollar Goes: 2002

Should we blame our skewed priorities? American healthcare often works miracles when people become very ill, but it needs to do a better job with preventive care. Equally to blame is the fact that we spend a disproportionate amount of our healthcare budget for end-of-life care.

But rather than tangle up the alreadyvolatile healthcare debate in ethical arguments over whose life is worth more, it would be smarter to shift the focus to keeping people healthier longer. Earlier diagnosis and care are crucial to the future health of both Americans and American healthcare—and pharma has a starring role here.

Why? Because prevention is our first line of defense. Now is the time to promote prevention, so that we have the funds to invest in promising treatments for conditions like cancer and Parkinson's disease. We are on the cusp of a pharmacogenetic revolution that will finally make personalized medicine a reality.

We cannot afford, in terms of dollars or lives, to continue the blame game. In order to deliver on the promise of affordable and quality healthcare for all citizens, all the players in the healthcare debate must work together. At the end of the day, we should unite against our common enemy—disease.

Peter Pitts is director of the Center for Medicine in the Public Interest and chief voice of DrugWonks.com. He can be reached at ppitts@cmpi.org