PITTS: Backward health-care reform

By Peter Pitts | Thursday, December 11, 2008

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COMMENTARY:

The expected uptick in left-leaning legislation from Capitol Hill started early when Sen. Max Baucus, Montana Democrat, unveiled a sweeping plan for health-care reform.

Mr. Baucus is chairman of the powerful Senate Finance Committee, and his plan is very similar to one put forth by President-elect Barack Obama on the campaign trail. So it wouldn't come as a surprise if much or all of it passed into law come January.

Much of the Baucus plan is well-known - the creation of a national health insurance exchange, the expansion of Medicaid, Medicare and SCHIP, and the like. He and Mr. Obama have promised that these new government initiatives won't impact patients now satisfied with their insurance coverage. But one of the lesser-known facets of the Baucus plan, the establishment of a national "comparative effectiveness" center, will in fact significantly affect the average patient's medical treatment.

Comparative effectiveness trials test new medical treatments against older alternatives. Under the Baucus plan, the results of these trials could end up informing the coverage schemes of public insurance programs.

New drugs tend to be pricier. So, in theory, a comparative effectiveness agency could cut down on government costs by ensuring that public programs only pay for new pills that are sufficiently more effective than their older, cheaper counterparts.

The truth, however, is the agency would likely restrict patient access to cutting-edge pharmaceuticals, hamstring physician practices, and profoundly compromise the well-being of countless sick Americans.

A government-run comparative effectiveness center is, by design, primarily concerned with prices - not patients. That translates into a bias against approving new treatments. For patients, this amounts to rationing.

Witness Britain's government-run comparative effective agency, the National Institute for Health and Clinical Excellence (NICE). Over just the last few years, NICE has either denied approval of or significantly restricted access to a number of popular and highly effective pharmaceutical pills, including the Alzheimer's drug Aricept, the breast cancer drug Herceptin, and the kidney cancer drug Avastin. According to NICE Chairman Sir Michael Rawlins: "Rationing is a necessary evil. We have to do it. There will be losers and winners."

The top-down controls on new drugs generated by comparative effectiveness research will also compromise the ability of physicians to personalize patient treatment.

It might be true that for the majority of people a particular new pharmaceutical has basically the same effects as an older alternative. But there will almost always be a minority of patients for whom even slight adjustments in a drug's physical effects has major health payoffs.

Doctors need to be free to treat that minority accordingly. But a comparative effectiveness agency will likely generate blanket bans or restrictions on drug accessibility, and physicians will be forced to prescribe many patients sub-par treatments.

The fundamental assumption behind the push for a comparative effectiveness agency is that drug prices are driving up health-care costs. That's simply not true. Drug prices went up less than 1 percent last year, well below the rate of inflation. Patented medications, which tend to be more expensive than older alternatives with expired patents, represent only 7 percent of national health-care expenditures.

A recent study published in Health Affairs found pharmaceuticals account for less than a quarter of the medical bills of the severely ill. Hospitalizations, on the other hand, account for half. The study's authors concluded that pharmaceutical drug prices "do not seem to be the driver of health-care costs for these members."

So Mr. Baucus is trying to solve a problem that's not a problem - drug prices aren't straining the country's health-care system. A national comparative effectiveness agency would, though, by clamping down on essential physician freedoms and undermining quality medical care.

Mr. Baucus and his like-minded compatriots need to go back to the drawing board.

Peter J. Pitts is president of the Center for Medicine in the Public Interest and a former associate commissioner of the Food and Drug Administration.

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