Call it Free Enterprise

The New York Times, Wednesday March 21, 2007, revealed on its front page what some of us already know (at least those of us who experienced it) the push drug companies make for physicians to sell their patients on the “new improved technology” – “A state’s files put doctors’ ties to drug makers on close view: debating whether payments affect patient care”. Nothing wrong with pushing new technology. What good are advances in technologies if they cannot be put to use to improve the personal and the national health? I am grateful that our society and our educational system generate technologies that protect us against deadly diseases, improve our life expectancy and the quality of our life. Not all societies can boost of what our technology have contributed to our quality of life. Having said that, I would like to address the issue in the article: Do payments to doctors by pharmaceutical companies affect patient care? My initial thought on this question is unqualified yes. One way or the other, patients’ health is affected by whatever the doctor prescribes. This question, I am afraid, is not all that informative. A more enlightened and pointed question is to ask: “Are payments to doctors “adversely” affect the delivery of care?”. A related question, which is much more critical, should be: “Do payments to doctors raise the cost of health care?”.

As an economist, I believe that my second question goes at the heart of societal problem of dealing with the ever rising cost of health care. Health economists have for long advocated the need to address the rising cost of health care associated with overuse of scarce resources, moral hazard and the resources expended through the use of up to date technologies during the last few months of life. Putting the cost issue aside (there are so much written on this), I would like to turn to the basic question raised by The New York Times. If there is a new drug that has been approved for a given illness, why do pharmaceutical companies have to pay doctors to prescribe new drugs that presumably are more beneficial for patients than old drugs? I will focus on rheumatoid arthritis, first because I have a first hand knowledge of what RA is all about, and secondly because the payment to the RA doctor is one of the highest – according to The New York Times, $6,053, which is 6 times as high as for internal medicine and 2 ½ times as high as for cardiologists, and given that these payments are not overt “bribes”, but most often are made to fund physicians’ research, which presumably will impact treatment, why should drug companies or doctors for that matter be apologetic about making or receiving such payments?

There are good uses as well as abuses arising from such practice. When a doctor, influenced by payments prescribes a drug that is more expensive, such as remicade or enbrel (the cost of monthly treatment ranges from $5,000 to $1,000), which for some patients has outcomes similar to a less expensive therapy (say prednisone or NSD such as celebrex), then the doctor like many other in society has an ethical problem. Overuse of drugs by doctors are not uncommon (see John Abramson’s “Overdosed America: The Broken Promise of American Medicine”, 2004) but so is the over demand placed by patients on doctors – whenever a new drug appears in the market. Drug companies saturate the market with advertisement (see ads for enbrel) that induces even the most enlightened among us to ask for it.

There are two salutary features arising out of the financial ties, reported by The New York Times. First of all, it warns us of possible “corruption” in the delivery of medical care; and secondly, it encourages us to be informed not only about our doctors but also about the various drug therapies out there. Knowledge is the most effective instrument the patient should seek. Unfortunately, many do not seek it either because they are intimidated by the “white coat bigger than life image”, or because of the cost of securing information.

The New York Times did their readers a great service, not just by making a “good expose of drug companies practice” but also in making patients (hopefully) aware of their responsibilities in managing their medical care. To make a choice one needs to be informed. Fortunately, today’s technology, the internet, has made the information accessible to all.