A Black Stethoscope Lying on a Table


Obama is trying to change the health care system in America.  I agree with him that there needs to be change.  What’s not entirely clear is what his ideas actually are.

The fact is, we spend among the most on health care of all the major nations, and aren’t getting better health care.  We all have similar life spans and health results.

That said, our system does have its advantages.  The USA has produced the vast majority of the innovations in medicine over the past 50 years.  The free market is a powerful tool, and those who opposed it have been buried by the sands of time.

Yet we need change.  The system has become broken.  Here are 5 specific ideas that can make a significant impact on the quality and cost of health care in the USA.

1) Publicly funded research should be repaid

The National Institute of Health, or NIH, funds hundreds of millions of dollars of research. Sometimes that research plays a major role in the development of a medication.

The best selling cancer medication, Taxol, was in a large part discovered due to taxpayer dollars. The NIH invested $484 million in its development.

With that kind of investment, it only makes sense that the NIH should have significant ownership of the medication and get repaid. Taxol is a billion dollar drug, after all.

But as is, the government is heavily subsidizing research and not getting repaid. For Taxol, Bristol-Myers Squibb generously agreed to pay the NIH 00.5% of sales, a promise it actually didn’t even meet.

It’s absurd. Hundreds of millions of our tax-payer dollars go to develop drugs that are then sold to us at exorbitant prices.

When we’re the ones subsidizing the research, we should either get repaid by a percentage of revenue, or by our representative – the FDA and NIH – having a stronger say in drug pricing.

2) Recommend options

The fact is that there are hundreds of medications on the market, and for any given class, say cholesterol lowering pills or antidepressants, there are many, many options. Often one medication isn’t necessarily any better than another. They just cost different amounts and tend to have different side effects.

An impartial analyst should look at all the options and propose a best practice choice – a medication that works best in the cost-benefit analysis, including economic cost. While not binding, having an official recommendation based off good science will certainly help doctors make better prescribing choices.

And those choices will save money by avoiding expensive variants that don’t show significant advantage over the existing options.

3) Require improvement over old

The FDA should be able, in exceptional cases, to require a medication prove itself against existing options. When the consumer already has 20 options that are all essentially the same, the FDA should be able to require new medications to prove their efficacy not against just placebo but against the existing options.

This will fight the proliferation of me-too drugs. And it will promote research into new classes of medication, something that has been lacking.

4) Improve the patent law

Drugs are rightfully protected by patents. Unfortunately, those laws have become abused by drug companies to aggressively bully generic manufacturers. They have also become exploited by allowing minor changes to extend the patent and keep costs up.

Right now, once a drug goes off patent, the parent company typically sues the first generic manufacturer to prevent competition. These preemptive lawsuits hurt the consumer greatly, because they can delay the introduction of generics by thirty-months.

It’s an abuse of the law to thwart the market.

5) Strengthen dietary supplement control

In 1994, a law was passed that significantly reduced the control of the FDA over dietary supplements. As long as they avoided making any specific health claim, they didn’t have to pass the stricter controls that drugs typically undergo.

The result? Half of dietary supplements don’t contain what they claim or are poorly manufactured. Some are even contaminated with lead.

Poor quality dietary supplements have become a chronic problem. In August 2009 alone, several were recalled. Weight loss supplements are particularly thorny, as they have tended to contain amphetamine-like compounds that potentially cause heart problems.

We need stronger control of health supplements.

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