Struggling Through Healthcare Reform

I’ve been spending the last few weeks at some hospitals talking to folks in the trenches. Much has been made of the impact of healthcare reform on patients (both the benefits and the drawbacks), pharmaceutical companies and medical device firms. Physicians have also been vocal. But until I spent time at some hospitals, I just didn’t realized how screwed our healthcare system will actually be when this law takes effect.

When Massachusetts enacted its own version of healthcare reform and universal coverage, patients came – to the emergency room. Wait times at hospitals from Springfield to Boston exploded and some patients with legitimate emergencies died as resources were drained by the newly insured. We’re not on the eve of this same thing on an unprecedented scale as millions of individuals living in the U.S. will get healthcare coverage. And come they will – most likely to the emergency room. And costs will continue to explode.

It is a tragedy that President Obama spent a year to enact healthcare reform that will neither reduce healthcare expenditures or provide better quality care. What we did do is trade better healthcare for some for lesser care for nearly all. In fact, it’s more than a tragedy – it’s criminal.

Nowhere is that more obvious than the hospital emergency rooms where I’ve spent my week. Hospitals are struggling with volumes now, they will be absolutely broken if patient volumes increase just 7-11%. At the same time, margins are thin. In the wake, we’ve already seen St. Vincent’s in New York close just days after the passage of healthcare reform. The result, patient volumes at nearby Bellevue Hospital have spike over 20%. And wait times have exploded.

For year’s we’ve seen practice after practice roll-out the “Medicare NOT Welcome Here” signs. As healthcare reform fails to stem the spiraling costs and patients find themselves getting less and less, we will come to realize that a golden opportunity for real and meaningful healthcare reform has been squandered. And chief among the failures was not to (finally) address medical malpractice.

Hospitals were nearly broken before healthcare reform, they will be broken now. And it is a tragedy that President Obama and Speaker Pelosi refused to push for real healthcare reform.

National Pharmaceutical Council Names Chief Science Officer

Robert W. Dubois, MD, PhD, has been named Chief Science Officer of the National Pharmaceutical Council (NPC). Dubois will head policy for the organization, including evidence-based medicine, health economics and outcomes.

Prior to joining the NPC, Dr. Dubois was the Chief Medical Officer (CMO) for health IT giant Cerner. He received his MD from Johns Hopkins School of Medicine, a PhD in health policy from the RAND Grand School.

J&J Issues 13th Recall - More Contaminated Tylenol

On Monday, Johnson & Johnson issued yet another recall for Tylenol. This marks the 13th major product recall by the company in barely a year.

On the eve of Johnson & Johnson’s quarterly earnings call, the company is recalling Tylenol for exactly the reasons as before. This latest recall covers the 50-count bottles of Tylenol 8 Hour caplets. Patients flooded J&J with adverse reports for nausea, vomiting and diarrhea after taking more Tylenol that is believed to be contaminated with pesticide 2,4,6-tribromoanisole.

Most intriguing is that the J&J has previously claimed that it stopped using the pesticide-laden wooden shipping pallets on January 15th. If that were true, this recall would seem to have been unnecessary. Once again, it seems that J&J has not been entirely forthcoming with the FDA, its investors, and most importantly, consumers.

Meanwhile, J&J seems to be soft pushing this recall. The company has not posted anything about this on its McNeil Product Recall Twitter Account or its official company blog – JNJBTW.

A Quiet Friday for J&J

In what has become an almost weekly ritual, I was expecting another drug recall, management change or some other announcement of corporate malfeasance from Johnson & Johnson on Friday. It didn’t happen.

No additional poisonings of young children taking J&J products. No additional details of phantom recalls. No additional leaked documents of a company hiding questionable things from the FDA. No sacked executives (whether scapegoat or deserved). Essentially, Friday was a no-news day for J&J. Search as I might, I couldn’t find anything. (Yeah, there was that nasty quarter billion dollar fine that J&J is going to have to pay to Louisiana for misleading marketing, but that hit on Thursday. More on the Louisiana case tomorrow.)

Could it be, that J&J is FINALLY turning the corner? Or could it be that J&J just didn’t want any additional distractions before it reports quarterly earnings on Tuesday?

Pfizer Feels No Pain

Pfizer is making a $3.6 billion bid to snatch up King Pharmaceuticals. Pfizer is facing the patent expiration of Lipitor and needs to replace the revenue stream. King’s portfolio of pain medications is a very tempting morsel for Pfizer.

King is in the process of developing a tamper-resistant, long-acting oxycodone. In the deal, Pfizer will also get Embeda (long-acting morphine), Skelaxin (muscle relaxant), Avinza (extended release morphine) and Flector (a trans-dermal pain medication).

What remains to be seen is the ongoing success of Pfizer’s fundamental strategy – growth by acquisition. Pfizer’s great at buying companies, but struggles with digesting the meal.

Pfizer’s Stink Problem

Pfizer’s Lipitor stinks. Literally. About six lots of Lipitor have come into contact with the pesticide 2,4,6-Tribromoanisole, the same chemical that contaminated numerous J&J products…and resulted in the FDA finally uncovering the systemic manufacturing abuses.

However, Pfizer is quick to point out that it acted quickly in initiating the recall, in stark contrast to J&J who waited months, and only then tried to hide the recall via “phantom recalls.”

Pharmaceutical Growth to Rebound in 2011

In its annual global pharmaceutical review, IMS Health is predicting industry growth to tick up slightly in 2011. The company is anticipating 4-5% growth for 2010 and is expecting growth to increase to 5-7% next year, or roughly $880 billion. Of course, this is a far cry from global growth rates of nearly a decade ago where the industry grew 11.8% (in 2001) and 11.5% (in 2000).

“While the overall market will appear to rebound somewhat in 2011, the underlying constraints to growth in developed markets are stronger than ever – including the impact of major patent expiries and payer mechanisms to limit drug spending,” said IMS Senior Vice President Murray Aitken. “We expect the pharmerging markets to continue their rapid expansion next year and remain strong sources of growth, and also see the potential for several significant innovative treatment options that are becoming available for patients in areas that include metastatic melanoma, multiple sclerosis and acute coronary syndrome.”

Other highlights from the IMS report:

• Emerging markets (or pharmerging markets as IMS calls them) will drive the majority of the industry growth. The 17 pharmerging markets are expected to grow 15-17% to nearly $180 billion in 2011. China along will reach $50 billion (that’s an awful lot of shark fins).
• The United States is still the largest global market, but growth is expected to just outpace inflation – to about $330 billion.
• There will be a number of significant generic expirations in 2011 in the United States, including: Pfizer's Lipitor, BMS and Sanofi-Aventis' Plavix, Eli Lilly's Zyprexa and J&J's Levaquin. These drugs have $17 billion in annual sales.
• In the United States, health plans will continue to use pre-authorizations and cost sharing provisions to drive down drug costs.

Deborah Peel and the Age of Bitterness

It’s been a while since I’ve checked in Deborah Peel and her Patient Privacy Rights group. Peel has been really quiet lately – extremely quiet. She’s had a rough go of it. At HIMSS, she was basically despondent – sulking because nobody was taking her seriously. I was really concerned for her. I know Deborah Peel used to be psychiatrist – but I remember thinking at HIMSS, this woman is suffering and could really use the help.

She spent a fortune lobbying the Obama Administration for access – and got rejected. She’s given hundreds of thousands of dollars to Democratic political causes and candidates – from Emily’s List and the DNC National Committee, to Dick Durbin and Barack Obama, Deborah Peel has dropped a small fortune into buying access and clout (she's spent more money to buy access than some Americans will make in their entire lifetime). And yet Democrats continue to snub her and her agenda.

Since HIMSS, it only seems to have gotten worse. Deborah Peel hasn’t made a single posting on her blog in over nine months (her last posting is December 31, 2009). Frankly, it’s not surprising. She doesn’t have any new ideas, but I’d at least expect her to continue screaming about her old ones. But no, Deborah Peel’s despondency continues. I’m starting to feel sorry for her.

What gets me about Deborah Peel is two things: 1) She’s against all forms of technology – except when companies give her and her group money (a kind of shakedown). And 2) Deborah Peel only focuses on patient privacy when it involves technology. When was the last time you heard Deborah Peel speak about the security of paper-based medical records? Um…never. Deborah Peel can’t make any money off paper-based records, so she ignores the obvious privacy problems. Deborah Peel doesn't care about patient privacy - she cares about making money off scarring people about patient privacy.

I guess this is all on my mind because I drove by Deborah Peel’s extravagant Washington D.C. condo last week. She bought it back when she thought she was going to be a player in Washington. Those days are long gone and the condo was dark (wonder if she still lives there now that she's been rejected by everyone in Washington). Deborah Peel is starting to look like today’s version of Lorraine Day. I pity Deborah Peel.