This is why increasing numbers of employers have in recent years made use of what are known as Pharmacy Benefit Managers, or P.B.M.s. The P.B.M.s draw up drug formularies—lists of preferred medications. They analyze clinical-trials data to find out which drugs are the most cost-effective. In a category in which there are many equivalent options, they bargain with drug firms, offering to deliver all their business to one company in exchange for a discount. They build incentives into prescription-drug plans to encourage intelligent patient behavior. If someone wants to take a brand-name oral contraceptive and there is a generic equivalent available, for example, a P.B.M. might require her to pay the price difference. In the case of something like heartburn, the P.B.M. might require patients to follow what’s called step therapy—to try the cheaper H2 antagonists first, and only if that fails to move to a proton-pump inhibitor like omeprazole. Employers who used two or more of these strategies last year saw a decrease of almost five per cent in their pharmacy spending.
There is no mention of these successes in “The Truth About the Drug Companies.” Though much of the book is concerned with the problem of such costs, P.B.M.s, the principal tool that private health-care plans use to control rising drug costs, are dismissed in a few paragraphs. Angell’s focus, instead, is on the behavior of the pharmaceutical industry. An entire chapter, for instance, centers on the fact that the majority of drugs produced by the pharmaceutical industry are either minor variations or duplicates of drugs already on the market. Merck pioneered the statin category with Mevacor. Now we have Pfizer’s Lipitor, Bristol-Myers Squibb’s Pravachol, Novartis’s Lescol, AstraZeneca’s Crestor, and Merck’s second entrant, Zocor—all of which do pretty much the same thing. Angell thinks that these “me-too” drugs are a waste of time and money, and that the industry should devote its resources to the development of truly innovative drugs instead. In one sense, she’s right: we need a cure for Alzheimer’s much more than we need a fourth or fifth statin. Yet me-too drugs are what drive prices down. The presence of more than one drug in a given category gives P.B.M.s their leverage when it comes time to bargain with pharmaceutical companies.<--
Another topic covered by Gladwell relates to misinformation:
-->Here is a classic case of the kind of thing that bedevils the American health system—dubious findings that, without careful evaluation, have the potential to drive up costs. But whose fault is it? It’s hard to blame Pravachol’s manufacturer, Bristol-Myers Squibb. The study’s principal objective was to look at Pravachol’s effectiveness in fighting heart attacks; the company was simply using that patient population to make a secondary observation about strokes. In any case, Bristol-Myers didn’t write up the results. A group of cardiologists from New Zealand and Australia did, and they hardly tried to hide Pravachol’s shortcomings in women and older people. All those data are presented in a large chart on the study’s third page. What’s wrong is the context in which the study’s findings are presented. The abstract at the beginning ought to have been rewritten. The conclusion needs a much clearer explanation of how the findings add to our understanding of stroke prevention. There is no accompanying commentary that points out the extreme cost-ineffectiveness of Pravachol as a stroke medication—and all those are faults of the medical journal’s editorial staff. In the end, the fight to keep drug spending under control is principally a matter of information, of proper communication among everyone who prescribes and pays for and ultimately uses drugs about what works and what doesn’t, and what makes economic sense and what doesn’t—and medical journals play a critical role in this process.
A more significant critique of medical journals is the writing of drug reviews by authors with some conflict of interest in the drug being reviewed. Angell, in her previous role as editor at NEJM, was involved in a problem of this kind.
As to Gladwell's issue of "clearer explanation," one might also take a look at the way law reviews are being handled. For example, as noted elsewhere on this blog, the Harvard Law Review published an article asserting a 97% patent grant rate at the USPTO, even though there is no such thing, and never corrected the error. At a minimum, that article needed a "clearer explanation."
**UPDATE. 2 Sept 2005**
Several pieces of legislation, enacted from the Reagan era onwards, have played into the hands of Big Pharma - the collective name for the top 10 drug companies that between them netted $US36 billion in profits in 2002 - more than all the other 490 Fortune 500 companies together.
It sounds like high farce but it is fact: the US Patent and Trademark Office is paid a piece rate according to how many applications it processes, which, naturally, predisposes it to grant patents rather than having to justify rejecting them. Bingo: patents on new dosages, combinations of old drugs, and even on the coatings and colours of pills.
Pity the drug regulator as it wades through the resulting patent mountain to figure out which of these supposed innovations should earn the companies an extension on their lucrative exclusive marketing rights.
Of course, the pharmaceutical industry and free-market pundits decried Angell and her work when the book was published in the US last year.
She was lampooned as a woolly leftie by James Pinkerton, a fellow of the think tank New America Foundation.
"She argues that the same government that has given us the Interstate Commerce Commission, the Federal Communications Commission, the Federal Energy Regulation Commission, the Federal Elections Commission, and a hundred other acronymic agencies, will do a wonderful job of overseeing the pharmaceutical industry," he sniggered. "So if you are sick and tired of capitalism, your ship may be coming in."
Henry Miller, a fellow at the conservative Hoover Institution at Stanford University, got more personal, accusing Angell of a crusade to deny people life-saving innovations. "Dr Angell's analysis of companies' profitability downplays their huge investments in research and development," he wrote. This investment, as a proportion of sales, was about four times as much as the electronics, telecommunications or aerospace sectors.