All New for a New Year

 

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Lessons From God at Christmas

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Excessive pharmaceutical pricing needs curbing

The pharmaceutical industry is out of control. That is the conclusion of a recent article in the New York Review of Books (NYRB). A case in point is Moderna, the maker of a COVID-19 vaccine. The federal government paid the company $2.48B to develop a vaccine and bought millions of doses at $26 each. With the end of government funding in sight, the company announced that it would produce an updated vaccine at $130 per dose. The public was outraged.

NYRB delivers an “indictment of American drug companies and the federal government for all too often privileging profit over health, and of the research universities, medical professionals and philanthropists who have been deeply complicit with them.”

Things started to go bad after World War II, as “the pharmaceutical industry, aided by the federal government and philanthropic foundations … produced an enormous arsenal of drugs against a variety of fearful diseases and disorders,” but it “also single-mindedly profit maximization by engaging in price gouging, blocking the availability of cheaper generics, and exploiting the patent and regulatory systems to harass and suppress competition.”

Part of the problem has been the use of patents, which “enabled huge price markups, generating corporate profit margins” … “double and often triple those found in other manufacturing sectors.” The original intent of granting patents was to make sure companies would make the drugs “available to the public on ‘reasonable terms.’” Significant reforms of the patent practices have been proposed and struck down.

The industry managed to extend the life of patents beyond the limit of 17 years, raising it to 20 years. And patents would be longer still with the introduction of slightly modified versions of the medicine in question, a “process called evergreening.” Without providing evidence, pharmaceuticals argued that higher prices were necessary to meet “the costs of development, including research, clinical trials and failures.”

A notorious case was the drug ATZ, the first treatment for AIDS. It came to market in 1987 at a cost of $10,000 for a year’s supply. Public pressure forced the maker, Burroughs Wellcome, to lower the price to $8,000 per year. It did not make a dent in the company’s profit, with sales of more than $1B by 1991.

Overall, the industry fought hard against the introduction of much cheaper generic medicine, declaring them to be “counterfeits.” In 1970, the pharmaceutical industry successfully lobbied for the introduction of laws in all 50 states prohibiting pharmacists from dispensing the more affordable medicine. (In the mid-70s, a coalition of the AARP, organized labor, and consumer groups overturned these laws in 40 states.) Pharmaceutical companies also successfully resist a call from poor nations to allow for the production of life-saving generic COVID-19 vaccines.

 The excessive cost of medicine is a stark reality confronting SOMOS Community Care, a network of over 2,500 independent doctors who serve some 1 million of New York City’s most vulnerable Medicaid patients. Drug prices in the US are four times as high as prices in other high-income societies. Many low-income patients—struggling to pay for the drugs they need even on Medicaid—cut pills or forego doses altogether, putting their health at risk. At times, there is also drug scarcity, leaving doctors and their patients at a disadvantage. And insurance companies will not cover certain medicines.

The monopoly enjoyed by the pharmaceutical industry—prone to corruption—is a glaring injustice hurting people with low incomes, denying them vital medication. It is a practice opposed to the higher calling of companies to serve the well-being of society. The industry must reform itself and consider its research and development slate, as there is a flipside to the high cost of medicine—the saturation of the market that instills a need in the public to consume ever more drugs.

There is a glimmer of hope as the US government has set in motion a negotiation with the pharmaceutical industry to lower the prices of 10 drugs taken by Medicare enrollees and covered under Medicare Part D. In 2022, Medicare members paid a total of $3.4B for these drugs that are used to treat diabetes, heart failure, blood clots, and autoimmune disorders, conditions that disproportionately impact women, communities of color, and people in rural areas. Some 9 million people take these drugs, which has generated $493B in global revenue for the drug companies.

Now, finally, the federal government is putting some pressure on the industry to curb its prices, just as is standard practice in other industrialized nations. The move is part of the Inflation Reduction Act of 2022, signed into law by President Biden. Not surprisingly, a coalition of drug companies and industry lobbying groups have filed lawsuits aimed at forcing the US government to halt its bid to move ahead with the negotiations—even though 9 companies have agreed to sit down with federal negotiators. It appears, however, that the lawsuits will have little traction. The negotiations may mark the beginning of real change.

 

Mario J. Paredes is CEO of SOMOS Community Care, a network of over 2,500 independent providers responsible for reaching and delivering care to over one million Medicaid lives across New York City.

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City MD vs. SOMOS Community Care — A Study in Contrasts

A two full-page advertorial in The New York Times published on November 17, 2023 sang the praises of City MD and the host of differently named urgent care centers as a solution for people confronted with the "glacial pace of getting medical care in New York City and across the country: "It can take weeks to see a primary care doctor, and an emergency room visit can set you back many hours." 

There is no disputing the time it takes to get treatment in an ER. Still, the SOMOS Community Care network of over 2,500 mostly primary providers is highly accessible, caring for some one million of New York City's most vulnerable Medicaid patients. City MD—not particularly present in the city's most needed neighborhoods—is an option for those with Medicare or private insurance but not for those with traditional Medicaid coverage. This reality makes SOMOS, in fact, the "City MD" for the underprivileged. 

SOMOS offers an answer to City MD's claim that "with primary care doctors overburdened, navigating the current health care system can feel overwhelming for patients." SOMOS practices are located in the very communities that are being served, notably neighborhoods that are home to Asian Americans, Hispanics, and African Americans. These community-based practices readily welcome new patients, including those requiring urgent care. 

The advertorial cites an example: "a kid who split his chin open at the gym. He was out of the clinic in 25 minutes. He would have waited five hours in the ER, and his primary care doctor isn't trained for that." City MD acknowledges that "primary care is super important—preventative care is huge." That, indeed, is the focus of SOMOS doctors. They are highly qualified to deal with stitches or other emergencies. If needed, those SOMOS doctors would refer a patient requiring urgent specialized care to a colleague in the community.

There is no disputing the need for primary care doctors. City MD argues that the model of care they provide has changed: "At one point in time, if you had a problem, you would call your primary care doctor. They would interrupt their dinner to take your call and give you advice. That model has become less prevalent." 

This claim touches precisely on SOMOS's unique contribution to the New York State healthcare universe: the restoration of the family doctor of old as a trusted figure and community leader who has a bond with patients and is intimately familiar with patients' medical situations and overall circumstances—someone, indeed, who will take a call at dinnertime.

SOMOS care revolves around the patient-doctor relationship, carefully nurtured and fed with doctors' critical knowledge of their patients' lives. The provider gets vital information about his patient thanks to the work of Community Health Workers, who are doctors' eyes and ears in the community. They visit patients' homes to remind them of medical appointments, assess conditions in the home and the neighborhood, and gather pertinent information about the family as a whole.

Patient intelligence gathered in this fashion includes the so-called social determinants of health: social factors—poverty, subpar housing, and lack of access to healthy foods and other conditions—that can impact both mental and physical health. SOMOS doctors also engage Community-based Organizations to help address patients' social needs. The awareness of a patient's social and environmental circumstances is impossible for City MD doctors, who only get a snapshot of the overall condition of the people they see.

The City MD advertorial cites a finding by the American Medical Association that there is a growing shortage of doctors in the US, which is particularly true when it comes to PCPs. The AMA reports that the causes of the lack of doctors include burnout and "shrinking Medicare reimbursements." The same is true for Medicaid reimbursements, but SOMOS doctors have an edge as they have signed on to the Value-Based Payment model, which stipulates that providers' compensation is tied to the longer-term well-being of their patients. SOMOS doctors are paid extra for going the extra mile. Thus, their earnings are significantly boosted.

Finally, the advertorial states that, besides the shortage of PCPs, doctors "are spending their time doing administrative duties, rather than treating patients." On this score, too, SOMOS has developed a solution:  training doctors' staff to take on the bulk of administrative responsibilities, such as the careful maintenance of Electronic Health Records—thus freeing doctors to focus on their patients.

Of course, City MD meets a need and offers convenient access to medical care. However, there is no substitute for the intimate, comprehensive, and preventative health care at the heart of SOMOS.

Mario J. Paredes is CEO of SOMOS Community Care, a network of over 2,500 independent providers responsible for reaching and delivering care to over one million Medicaid lives across New York City.

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