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New Medicines New Hopes: How Do You Calculate the Value of A Medicine? ( 2007-01-25 )
Since 1960, more than 750 new chemical compounds have been approved and become available to patients, bringing hopes to patients suffering from disease that had been untreatable or poorly treated. New drugs not only expand the options for pharmaceutical therapy, but also offer patients with better treatment results and greater chance of survival. New drugs prolong the life span of human beings, help keep families together longer and improve the quality of life for patients and caregivers, and are the most cost-effective options in health care.
---New Drug Prolong Life Expectancy---
At the turn of the 20th century, average life expectancy was only 47 years. A child born today can expect to live more than 76 years. These longer life spans are due, in large part, to the conquest of diseases by pharmaceutical research. A study showed that each new drug approved by the Food and Drug Administration saves, on average, about 11,200 life years each year. In other words, 11,200 people gain an additional year of life from the average new drug. (1)
Also, the swift development in the biotechnology speeds up pharmaceutical R&D. The recent developments of vaccines for hepatitis, chicken pox, clotting factors and drugs for cancer treatments etc, all have significant contribution in prolonging life expectancy.
Followings are some examples in this aspect:
__*Vaccines have virtually wiped out such diseases as diphtheria, whooping cough, measles and polio in developed countries.
__*The influenza epidemic of 1918 killed more Americans than all the battles fought during the First World War. Since that time, medicines have helped reduce the combined U.S. death rate from influenza and pneumonia by 85%.
__*The innovative medicines have helped cut deaths from hypertension, heart disease and stroke in half since 1950. (2) And this steady decline is continuing. Deaths from heart disease fell 1% in 1999. (3)
__*According to the National Cancer Institute, deaths from all caners declined in the U.S. between 1990 and 1997, due to better treatments and early detection.
__*Since 1965, drugs have helped cut emphysema deaths by 57%.
__*H2 antagonists, proton pump inhibitors, and combination therapies have cut deaths from ulcers by more than 60%.
__*Only three years after the virus that causes AIDS was identified, a pharmaceutical company made the first medicine for AIDS available. Since the mid-1990s, when the first protease inhibitor drugs were launched and combination drug therapy was introduced, the U.S. death rate from AIDS has dropped dramatically. (3)
---New Drugs Provide Better Therapeutic Results and Improve the Quality of Life for Patients and Caregivers---
As the life expectancy spans and the society ages, the treatments of chronic diseases are getting important. In the past decades, the development of drugs for chronic diseases is focused on alleviation symptoms, as well as improvement of the quality of life. Thanks to the innovative drugs, the chances that elderly will be devastated by chronic diseases such as stroke, Alzheimer’s disease, Parkinson’s disease and diabetes have declined sharply. The elderly nowadays enjoy a healthier and happier retirement.
With new ingredients, new dosage forms or new administration routs, new drugs are able to alleviate symptoms, reduce side effects, treat or prevent diseases. A variety of new and improved drugs make patients today spend less time in hospitals and more time living their lives.
Followings are some examples:
__*Recent developments have revolutionized the care of people living with HIV/AIDS. New drug treatment strategies can decrease the amount of virus in the bloodstream to undetectable levels. Other medicines attack the virus in new ways, an essential advance for those who have developed resistance to older medications. (4)
__*Breakthroughs in diabetes drugs means that people can now better control their blood sugar levels, thereby preventing devastating complications, such as blindness, kidney failure and amputations.
__*Heart disease patients can avert heart attacks with cholesterol lowering drugs.
__*Innovative drugs that prevent nausea during chemotherapy are making treatment easier to bear for many patients. Another drug, called colony-stimulating factor, helps patients whose immune systems are weakened by high-dose chemotherapy.
__*Arthritis attacks patients at any age and is a leading cause of disability. Two new drugs have been developed for rheumatoid arthritis stop the body’s immune system from attacking joints. Another new class of drugs, known as COX-2 inhibitors, is helping arthritis sufferers avoid the side effects of older drugs.
__*In the aging society, more and more patients suffer from Alzheimer’s disease, and it is expected to afflict 14 million by mid-century unless a cure is found. Pharmaceutical companies are working on 21 medicines for this disease, and recently approved drugs are already making a difference in the quality of life of Alzheimer’s patients and their families. A research on a new drug showed that, over one year, caregivers for Alzheimer’s patients treated with the drug spent 400 hours less caring for the patients than caregiver of patients who received a placebo.
__*Because symptoms of Parkinson’s disease occur at the late stage of the development of the disease, early diagnosis is difficult to impossible. Patients are suffering from movement difficulties. New drugs have been developed since 1960. These new drugs effectively stop the symptoms from worsening. Pharmaceutical companies are currently working on 13 new drugs for Parkinson’s disease.
---New Drugs Reduce the Total Healthcare Expenditure---
New drugs provide better therapeutic results; but does it also mean that the use of new drugs will increase the healthcare expenditure? As a matter of fact, new drugs, though have higher prices, could reduce the total health care expenditure through reducing the demands of hospitalization and surgery.
A recent report by the Tufts Center for the Study of Drug Development found that prescription drugs increased from 5.5% a decade ago to a projected 8.5% in 2001. During the same period, hospital expenditures declined from nearly 37% to 33%. The data suggest that prescription drugs may be substituting for more costly hospital care, saving money for the health care system (6).
Columbia University economist Frank Lichtenberg found that spending US$11,000 on general medical care adds, on average, one year of life. But spending US$1,345 on pharmaceutical R&D yields the same return. Lichtenberg also found that a $1 increase in spending on pharmaceuticals is associated with a $3.65 reduction in hospital expenditures. (7)
Using drugs to control and treat certain diseases, such as AIDS, diabetes, asthma, stroke and heart diseases, usually reduce healthcare expenditure through reducing hospitalization for treating complications and side effects.
Here are some examples.
__*Before 1977, the year in which stomach-acid-blocking H2 antagonist drugs were introduced, 97,000 ulcer surgeries were performed each year. By 1987, the number of surgeries per year had dropped to fewer than 19,000 (8). In the early 1990s, the annual cost of drug therapy per person was about US$900, compared to about US$28,000 for surgery. (9) The use of antibiotics in combination with H2 antagonists to treat duodenal ulcers was developed later and cost about US$140 per patient. According to the Boston Consulting Group, the new treatment saves at least US$224 million a year in health care costs. (8)
__*The combination therapy costs approximately US$16,000 a year per patient, but a federal study estimated that, before the medicines were available, AIDS patients generated an average of US$24,000 a year in hospital costs. (10) The average hospital stay for AIDS patients in New York State dropped from 23.4 days in 1983 to 9.6 days in 1999, thanks to new drug treatment. (11)
__*In a study, colony stimulating factor treatment was found to save an average of US$30,000 per patient in hospitalization costs for bone-marrow transplant. (12)
Apart from the reduction in total healthcare expenditure, new drugs, with less side effects and better efficacy, could also reduce the impact on national productivity due to illness. For example, drugs for treating depression and influenza could also help employees maintain their productivity.
---Investing in New Drugs, Bringing New Hopes---
It seems magical that a small pill could expand life expectancy, improve quality of life and, at the same time, be cost effective. Most people don't know that one small pill represents 12-15 years and US$802 million of R&D as the medicine moves from the laboratory bench to the pharmacy shelf. Only three of ten marketed drugs produce revenues that match or exceed average R&D costs. The pharmaceutical industry has worked intensely to discover and develop new medicines, investing more than US$32 billion in R&D in 2002. No other industry - from electronics to telecommunications - commits a higher percentage of its sales to new innovation and future advances. At the end of 2002, 28% more medicines were being investigated by pharmaceutical companies for approval by the FDA than a decade ago, with more than 1,000 medicines now in the development pipeline. These new drugs bring hopes for patients. No one can predict the future with great accuracy, but here are some of the developments scientists believe are possible in the near future:
__*Medicines can already stop the AIDS virus from reproducing. The next breakthrough may be medicines that can stop the virus from entering the cell in the first place. (14)
__*Drugs that will slow the progression of Alzheimer’s disease. (15)
__*“Cocktails” of treatment, including vaccines, monoclonal antibodies immune system boosters, and drugs that cut off tumors’ blood supply in an all out attack against cancer. (16)
__*Drugs that will prompt the heart to grow new blood vessels reducing the need for bypass surgery. (17)
__*Treatment that may regenerate nerves damaged by brain disease or spinal cord injury. (18)
A 1991 study by the Battelle Institute found that, in the next 25 years, half of all medical advances likely will come from pharmaceutical research and development. Because of the consistent investments made by pharmaceutical companies and the devotion of scientists, we can expect a longer and healthier life.
References:
(1).Frank R. Lichtenberg, “Do (More and Better) Drugs Keep People Out of Hospitals?,” Health Economics, Vol. 86, No. 2, May, 1996. pp. 384-388.
(2).Health, United States 2000, Centers for Disease Control and Prevention, US. Department of Health and Human Services, July 2000.
(3).“Death from Heart Disease, Cancer, AIDS Declines in 1999,” The Washington Post, June 27, 2001.
(4).PhRMA, A Decade of Innovation, 2003.
(5).Arthritis and Rheumatism, May 1998.
(6).“Prescription Drugs May Be Substituting for More Costly Hospital Care,” Boston, BW Health Wire, January 16, 2001.
(7).Frank R. Lichtenberg, “Do (More and Better) Drugs Keep People Out of Hospitals?,” Health Economics, Vol. 86, No. 2, May, 1996. pp. 384-388.
(8).Boston Consulting Group, The Contribution of Pharmaceutical Companies: What’s at Stake for America, September 1993.
(9).PhRMA, based on data supplied by the Health Care Financing Administration, 1993.
(10).Michael Waldholz, “But Success in Many Others in Cutting Hospital Costs,” The Wall Street Journal, October 10, 1996.
(11).Abid Rahman, et al., “Inversion of Inpatient/ Outpatient HIV Service Utilization: Impact of Improved Therapies, Clinician Education and Case Management in the U.S. Department of Veterans Affairs,” International Conference on AIDS, July 1998.
(12).W.P. Peter, “Comparative Effects of Granulocyte-Macrophage Colony Stimulating Factor and Granulocyte Colony Stimulating Factor on Priming Peripheral blood Progenitor Cells for Use With Autologous Bone Marrow After High-Dose Chemotherapy,” Blood, Vol. 81, No. 7, pp 1709-1719, April 1,1993.
(13).Legg, R.F., et al., “Cost Benefit of Sumatriptan to an Employer,” Journal of Occupational and Environmental Medicine, Vol. 39, No. 7, July 1997.
(14).“The Hunt for Cures,” Time, January 15, 2001.
(15).Ibid.
(16).Ibid.
(17).“Next Milestone In Human Genetics,” The Wall Street Journal, May 26, 2000.
(18).“Biotech Bodies,” Business Week, July 27, 1998.
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