NCPA - National Center for Policy Analysis


August 7, 2009

Politicians seem determined to squeeze the drug industry, but it is patients ultimately who will feel the pinch, say Henry I. Miller, a physician and fellow at Stanford University's Hoover Institution, and Jeff Stier, an associate director of the American Council on Science and Health.

Drugs often improve the span and quality of life in a remarkably cost-effective way, a fact of crucial significance not only to the individual patient but to society as a whole. Innovative new medicines, for example, have helped many patients avoid costly hospitalization, say Miller and Stier:

  • Between 1980 and 2000, the number of hospital days fell by 56 percent and, as a result, Americans avoided 206 million days of hospital care in 2000 alone, according to Medtap International, which provides health economics and outcomes research services.
  • A study in 2000 sponsored by the Agency for Health Care Policy and Research concluded that increased use of a blood-thinning drug would prevent 40,000 strokes a year, saving $600 million annually.
  • A 1997 study by the National Bureau of Economic Research found the costs of treatment per episode of major depression fell by 25 percent from 1991 to 1995.

Another sign of progress is that, in general, new drugs confer an advantage over older ones in reducing mortality, say Miller and Stier:

  • A 2004 National Bureau of Economic Research study of patients who took drugs between January and June 2000 found that a higher percentage of those who took newer medications were still alive in 2002.
  • The estimated mortality rates were directly related to the time that had elapsed since each drug was approved.

President Obama has made it clear that he intends to eke out huge cost savings at drug companies' expense.   Quite justifiably, the drug industry's trade association, the Pharmaceutical Research and Manufacturers of America, fears "that the federal government will wind up rationing health care and dictating what medicines doctors can prescribe to their patients.  This may well prevent patients from gaining access to the critically important medicines they need to fight diseases such as cancer, diabetes and heart disease."

Source: Henry I. Miller and Jeff Stier, "Health care reform that's hard to swallow," Los Angeles Times, August 5, 2009.


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