Outcomes Over Transactions: Dr. Peter Bach on Bringing Accountability to the Drug Industry
By Kaitlyn Landgraf
The best way to envision today’s health care system is as a toll road that patients travel, surrendering fees to multiple toll-takers lining the side of the road, according to Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center. As Saturday’s keynote speaker at the Medicine X 2015 Conference, Dr. Bach argued that these tollbooths are the various entities involved in a patients health care: the hospitals, insurance companies, and drug companies, whose primary goal is to extract their “tolls” from patients and to eliminate detours to circumvent their toll booths. What doesn’t matter to them is how much money the patient has left in his pocket when he finishes treatment. The health care system, Bach argued, “is based on transactions, not outcomes,” with an aim “to maximize profits, not health.”
To illustrate his point, Bach pointed to measurements of performance differences among hospitals, which correlate to the wealth and socio-economic status of the patient population. Hospitals with lower-income and minority patient populations have higher mortality rates, which result in around 70,000 excess deaths each year. When ProPublica published data on physicians and hospitals’ performance rates across the country, more patients began to choose to be treated at hospitals with higher performance ratings.
In the same way, Bach argued, there needs to be a similar accountability check for pharmaceutical companies and the drugs they manufacture. Since 1965 and adjusted for inflation, there has been a hundred-fold increase in the price of cancer drugs. To justify that kind of price increase, Bach argued, “we would also have to see a hundred-fold increase in value and benefits of these drugs. But it’s clear that value doesn’t align with price.”
In fact, not only does the value of new drugs fail to match their surging price, but “we are seeing diminishing returns,” Bach said. He’s found that the cost of each additional year of life from a cancer drug treatment increases by $8,500 each year. We’re falling behind in terms of economics even as we make scientific progress. That’s unsustainable.”
And the burden of this lack of sustainability is borne directly by the patients themselves. Referring to his tollbooth analogy, Bach pointed out that insurance companies, “toll-takers, if you will,” are more likely to charge patients out of pocket for expensive drugs.
But the problems don’t stop there. Since drug prices have increased so dramatically and because that cost is transferred onto the patients, many respond by simply failing to take the drug, which is exactly the result the health care industry should want to avoid at all costs. But since the industry’s focus is not on outcomes but on profit, many patients fail to receive the life-saving treatments they need.
Additionally, Bach addressed a rarely-discussed aspect of drug development: the fact that anywhere between 29 to 50% of clinical trial results go unpublished. “The point of clinical trials is to create new knowledge,” Bach said. Patients do not participate in trials with the expectation that they themselves will improve, but for the benefit of future patients. A system where hundreds of thousands of patients willingly participate in a trial, only to have the data disappear and remain forever unpublished, is criminal. That is not an overstatement, as Bach referenced point six of the Nuremberg Code: that the risk of the experiment should be in proportion to the expected humanitarian benefits. “The directionality is clear: the humanitarian benefits are 100% absent if the data from a clinical trial never gets off someone’s computer,” Bach said.
These problems endemic to the drug manufacturing industry, Bach said, need to be held accountable with the same level of transparency that ProPublica applied to hospital performance differences. As patients became aware of hospitals and physicians’ scores, they began to go to more hospitals with higher success rates. Bach hopes to effect a similar change with his website DrugAbacus.org, a proof-of-concept platform devoted to letting consumers and health care stakeholders determine a reasonable cost for treatment based on its perceived value. And on the clinical trials front, Bach cited the YODA project at Yale that pulls data from unpublished trials and makes the findings publicly available.
If drug companies are allowed to charge whatever price they wish, they seek to maximize profit, as all for-profit companies do. “It’s a special case where we have allowed them to have complete control over their pricing,” Bach said, “and nowhere else in health care does that occur. The rational way to solve this is to create a synthetic market where companies that make great products…will make more money, and then we’ll have tem competing on what we care about, which is improving patients’ lives.”
Kaitlyn Landgraf is a graduate student in the department of journalism at Stanford. She previously attended Thomas Aquinas College and Yale University, where she studied philosophy and religion. Follow her on Twitter at @KaitlynLandgraf.