I was born into a medical system where, when the bratty young patient ran off and climbed a tree, the friendly pediatrician coaxed him down and still had time to do an exam.
I graduated from medical school into a terrifying pandemic with no proven approaches to diagnosis, treatment, or prevention—so we improvised, learned as we went, and buried too many good people while working to save others.
I chose to be a bench researcher as well as a bedside physician, believing that both roles would equip me to help patients. It soon became clear that what my patients really needed me to be was a teammate—that is, a partner with them and the other healthcare players in their orbit.
After years of working on those partnerships, here’s what I have concluded: When America’s healthcare practitioners put our heads together with our patients and their loved ones and their payers (usually, insurers), patient care can almost always be made more efficient, appropriate, and costeffective.
But, too often, we haven’t pulled together. We’ve treated each other like strangers—or worse, like rivals or nuisances or patsies. Our systems are designed too much for profits and not enough for patients; we’ve blamed each other for what doesn’t work instead of working as neighbors to fix the problems. When attitudes like ours harden into policy, you get the kind of healthcare system America has today: wasteful, shortsighted, disorganized, ineffective. And the nightmare of trying to sustain good health in this system can be summed up in two words:
Ticket, please.
America’s healthcare system is designed for the person who has the ticket. In an ideal world, every one of us has some form of payment that is our ticket into the system. But the first problem becomes clear at the turnstile where folks should come in: There’s no single ticket. There’s a vast menu of tickets, all the different types of insurance and noninsurance with all their different coverages and noncoverages, requirements, and rules. It’s almost like Disney World: many different tickets, A through E, but only the prized E tickets would get you through waiting lines and onto the best rides.
In the United States, almost all of the elderly are insured through the Medicare program. The adequacy of Medicare coverage is debatable, but breadth of coverage is impressive. About 56 percent of the nonelderly—in other words, half of the rest of us—“received health coverage as a benefit through either their own or a family member’s job” in 2011, according to the Kaiser Family Foundation (KFF), a nonpartisan and highly trusted source for health policy research and analysis. Another 6 percent purchased insurance on their own, KFF says, while about 20 percent had coverage through public programs for those with disabilities and/or very low incomes, such as Medicaid and CHIP (the Children’s Health Insurance Program).
In the grand American traditions of free-market competition and “more is better” philosophy, we’ve been told that having lots of different insurance options is a virtue. In fact, in my opinion, having many options produces very little benefit and a great deal of misunderstanding, chaos, and inequity.
Despite all my years dealing intimately with healthcare and insurance, I struggled to help my daughter recently as she chose among her new employer’s coverage options. Each one of us who is fortunate enough to be employed has to pick our ticket—that is, choose or design an insurance plan—based on information that most of us find insufficient and confusing. This dental coverage or that vision coverage? High deductible or low deductible? Most of us see a chunk of change going out the door every month for something that we’re not happy to buy but afraid to do without. So when we’re not sure what we’re buying, we tend to choose the ticket that costs us the least up front. The A ticket instead of the E ticket, at least if we’re paying for it.
And we don’t know if we’ve chosen the right ticket until we have to use it. After you’ve actually needed your ticket and learned about its effectiveness, you generally cannot change or replace it.
So you have a health need, you walk in the door of a doctor’s office, clinic, or ER, and you show your ticket. You hear, “You have a $30 copay.” Or, “Your deductible is $1,000.” Or, the most dreaded of responses, “We don’t honor that here.”
During the annual “open enrollment season” for insurance, you have a chance to switch to some other kind of ticket that might better serve your needs. But how do you know whether to change, or what to change to? What if you plan your coverage around your conditions and your health today, and then next month you are diagnosed with some new condition or your health takes a nosedive?
None of us fully grasps how screwedup The System is until we have to use it and find ourselves saying, “Oh no, I was sure I was covered for that—you mean I’m not?” Or, “All these years I’ve been paying and it can’t get me what I need now?” How about “My child needs this $100,000 treatment to stay alive, but I don’t have the $20,000 that’s our portion to pay.” In each of these circumstances and more, what we want to scream is:
“I HAVE A TICKET! CAN’T YOU HEAR ME?
WHY ISN’T THIS WORKING?”
That’s the situation for the lucky ones, the ticket holders. What about the people who don’t have a ticket? According to KFF, roughly 48 million Americans—about 18 percent of the population—did not have health insurance in 2011. These people know two things about The System: that it dispenses incredibly expensive care, and that it regards them as third-class citizens. As a result, these people try to avoid The System at any cost. So they go to the doctor only when they absolutely must, when a lump or pain or cough has become so bad that they can no longer stand it. Had they come in sooner, the disease might have been arrested. When they show up late with advanced disease, most are told that there’s a small chance of recovery—but they’ll still get a big bill. For them, bankruptcy looms, and what they are unable to pay is added to the cost of our care. The System gets its money one way or the other.
Here are three quick stories from a recent tour of duty I had on the general medical service at University Hospital that highlight the role tickets play and their unintended consequences:
As a provider, it is my job to care for people; as a provider, I don’t care if they have great insurance, meager insurance, or no insurance. But The System cares a lot. The System says to people without tickets, “We’ll take care of you if we have to, but we don’t want to. You’re going to cost us money.” To me, you’re a patient. To The System, you’re a pariah.
Say a fire destroys your home and you come to the hospital with life-threatening burns but no health insurance. Your care becomes a battle between the provider who says, “I’m going to care for this burn patient” and The System that says, “Man, these burn patients who don’t have insurance are costing us a fortune.” Then The System says, “In order to pay for this uninsured burn patient, we’re going to increase the charges to the patients who have tickets.” The insurance companies fully understand this. Their policyholders are being overcharged, but they have room to make adjustments that protect their profits. And if the policyholders pushed back too hard, The System (mostly hospitals and their owners, including investors, universities, and religious communities) would rebel or go bankrupt, thereby ending the gravy train for insurance companies.
This opaque “cost shifting” is an accepted way of life in US healthcare, and a huge contributor to the chaos, inefficiencies, and high overhead within the current system. And it is barely understood, it seems, by most of the public and the public’s elected officials, who continue to believe that “if everyone has access, someone needs to pay.” What do folks think is happening today? Last night when the impoverished and uninsured mother showed up at the ER with her cough and her child’s pneumonia, who paid? We did. All of us who are insured, who pay taxes, who give contributions, who are Americans: We paid. We pay now, and a huge share of what we pay goes not to healing but to profits for those who live off the healthcare system, especially insurers.
For years, Drs. Steffie Woolhandler and David Himmelstein of Harvard University have studied healthcare financing and policy. Their research found that not only is America’s $7,500 per capita healthcare cost much higher than in many other developed nations, but a stunning $2,000 of that per capita cost—more than a quarter—is eaten up by overhead. Since their research data is a few years old and all the cost trends are up, the healthcare and overhead costs are almost certainly higher by now.
Even though we pay more for healthcare than is necessary, some of America’s ticket holders still manage to get by. But even Americans with tickets do not always get by. They impoverish their families trying to pay their medical bills. In other nations of the developed world, from Great Britain and Japan to Switzerland and Canada, you don’t have citizens going bankrupt because of medical bills. But in the United States, with its supposed “best healthcare system in the world,” nearly two-thirds of all personal bankruptcies are associated with healthcare debt, according to research Woolhandler and colleagues published in 2009.
What’s more, a shocking three-fourths of those who declare a medical-related bankruptcy have health insurance.
The cost of care was an issue for Brian, a patient referred to me after he sought emergency room treatment. Had he not been worried about the cost, Brian would have seen a doctor when his headaches first progressed from bad to worse. But let me back up.
I met Brian and his partner, Joe, not long after they moved from Southern California to Auburn, Alabama. Brian was an artist, a bohemian who worked construction and retail jobs to pad his income from selling paintings and drawings. Joe had just completed his PhD and postdoctoral fellowship in plant biology, and he had been offered an assistant professorship in Auburn University’s department of botany. While neither Brian nor Joe had ever conceived of living in the southern United States, they moved enthusiastically. Teaching at a major university was not only Joe’s dream job, but it meant steady income and health insurance—a ticket!
Joe’s ticket, however, was not transferable to Brian. Gay men did not, and in many places today still do not, have partner benefits. So before the couple left California, Brian bought an independent health insurance policy. The $800 monthly premium took a big bite out of Brian’s earnings, so to help, Joe paid most of it. Despite the policy’s cost and its high deductible for hospitalizations, Brian figured it was an adequate safety net for someone like him who’d always been very healthy.
Brian and Joe were still settling into their new home in Auburn when Brian’s headaches began. They started at the base of his skull and were dramatically more painful whenever he coughed or sneezed—“like the top of my head would blow off,” Brian reported. These are the classic symptoms of what Brian later was confirmed to have, cryptococcal meningitis. “Crypto” is caused by a fungal organism in the environment that most of us can breathe into our lungs without being harmed, thanks to our normal immune systems. If the immune system is impaired as it can be by HIV, the organism sets up shop. Then it causes pneumonia or, more often, infection and inflammation of the meninges, the layer of protective tissue that surrounds the brain. Inside the skull, spinal fluid bathes the brain and creates a cushion between it and the meninges. A healthy person’s body creates about 500 milliliters of spinal fluid a day and reabsorbs the same amount, maintaining an even exchange of fluid. But crypto meningitis impairs that reabsorption so that the fluid accumulates in the skull, causing increases in intracranial pressure (ICP) that, if not relieved, can have devastating effects on the brain. To describe the pain associated with this as a “headache” is like thinking of a nuclear bomb as a firecracker.
On top of the headaches, Brian began experiencing confusion, impaired vision, and loss of hearing. On a Friday in early November 1988, Joe took Brian to the emergency department in Auburn, where he was seen by Dr. Allen Graves, once an infectious disease fellow at UAB. By that time, the rising ICP had rendered Brian blind and deaf, and the only way to get to the bottom of his condition was to perform multiple procedures, including a lumbar puncture. The procedure, commonly known as a spinal tap, is uncomfortable for some patients, excruciating for others.
For someone unable to hear or see, I can only imagine that it would be terrifying to be held tight and still by strangers’ hands, then poked in the lower spine with a needle. But the procedure was essential, both to collect cerebrospinal fluid for analysis and to lower the pressure in Brian’s skull. On the manometer used to measure ICP, a normal measurement is 50–100 mm of fluid. Brian’s initial tap exceeded 550 mm, the highest reading on the instrument.
Allen transferred Brian to my care, and I was at the UAB hospital on Saturday afternoon when he arrived. He was on an ambulance stretcher, writhing back and forth, fighting the restraints the attendants placed on his arms and legs to keep him from hurting them or himself. Joe was at Brian’s side, stroking his hand and speaking soothingly, but Joe’s reassurance literally fell on deaf ears. It was an agonizing sight.
The subsequent taps we performed lowered the pressure in Brian’s head enough that his confusion cleared and his hearing was partly restored. Once we could communicate with him and explain what was happening, Brian was able to relax and to talk about what he had been through. In his pain and confusion, he had imagined that he was being kidnapped and his captors had put something over his head so he couldn’t see or hear. But he could certainly feel, and when Allen stuck the needle in his back, he was sure he was being tortured!
Brian’s vision never returned—a profound loss for a man so passionate about making art. But we got the meningitis under control with medication, and after a few weeks of recovery, he was discharged from the hospital and went home to Auburn. Every two weeks, Joe would bring Brian back to Birmingham for another spinal tap as part of a study protocol he was on. On every visit, Brian arrived with a smile on his face and headphones on his ears. Though he regained only partial hearing after the crypto, Brian could hear recordings if he turned the volume up high. He especially loved listening to tapes of the 1960s TV sitcom The Andy Griffith Show because in his mind, he could “see” the episodes that he had loved watching as a child.
Brian had suffered what few of us will ever suffer, and he responded by creatively adapting and demonstrating an unquenchable spirit. Despite everything thrown at him—the painful procedures, the HIV diagnosis, the dismal future, the hearing and vision loss—he retained his zest for life.
I love humor and I bring it into my practice to a degree some find “unprofessional.” Tough. It works for me, and it seems to work for most patients. Brian—half-deaf, blind, body being punctured in the name of research and facing a prognosis of greater difficulties ahead—was a total comedian who would match me joke for joke.
One week, Brian came to his clinic visit with a little something extra. When I pulled up his shirt to do the tap, on his spine where the needle would go was a sticker, burnt orange and navy blue. It was the logo of the Auburn University Tigers, the football archrivals of my cherished Crimson Tide. We both laughed until we could hardly breathe.
For Christmas 1989, about a year after Brian’s transfer to UAB, he and Joe brought me a flat, rectangular present wrapped in holiday paper. It was a chalk drawing Brian had done for me since losing his sight. He had drawn a colorful tree, with a hand above it holding a watering can. On the water pouring from the can, he had scrawled “LIFE,” and next to the hand, “DR. SAAG.” The inscription at the bottom read, “Merry Christmas, Dr. Saag. Thanks for saving my life.”
I hugged Brian and Joe as I thanked them, tearfully. In that moment, I really felt like American medicine was doing something right. We’d bought time for Brian, and he was a living gift to each of us.
But “bought” is the right word, because Brian’s reprieve came at a price. Unable to work as he did before he lost his sight, Brian’s income consisted of the $500 a month he received in Social Security disability. That princely sum, in the state of Alabama, made him too well-off to get insurance through Medicaid; it was “above the threshold.” So he clung to his existing health insurance policy although, in the year since the crypto diagnosis, the premium had soared from $800 a month to $1,200 a month. We’d found ways to treat his illness, but we were back to the same issue that had originally delayed Brian’s entry into treatment: the high cost of healthcare.
In 2010, “the United States spent about $7,500 per capita on health care compared to an average of $3,300 in other rich countries,” according to Gary Burtless, a senior fellow at the Brookings Institution, a nonprofit public policy research organization in Washington, D.C.
“If the nation obtained better-than-average health outcomes in exchange for its much-higher-than-average health spending, we would have little reason to complain,” Burtless added on the Brookings website. “However, there is almost no evidence US health outcomes are better than those in other rich countries. A variety of statistics on mortality and morbidity suggest outcomes may be worse in this country than they are elsewhere.”
This, in my estimation, is why The System stinks. In one of the most medically sophisticated nations on earth, I cannot accept the idea that we can’t do any better.
While I’m railing against Washington, D.C., and our elected leaders, I will admit that many of them have tried. “The country has been on the verge of national health reform many times,” says a KFF research report. But for the better part of a century, under both Republican and Democratic administrations, efforts to improve healthcare access, quality, and affordability have gone down to defeat repeatedly. According to the KFF report:
And so it went, for decades more. Regardless of the economic times, the rise or fall of the stock market, or the rate of unemployment, the one constant since the mid-1970s has been the relentless rise of healthcare costs. When good healthcare is expensive, higher-income people still can purchase it, but lower-income people can’t. Better-quality care generally means better health outcomes. So, to put it bluntly, the Haves can afford more good health than the Have Nots. We buy the better tickets.
This began to change in my corner of the medical world in 1990 when Congress enacted legislation that was as revolutionary for HIV/AIDS care as the passage of Medicare had been for elder care.
The Ryan White Comprehensive AIDS Resources Emergency (CARE) Act was named for an Indiana youngster who suffered from hemophilia, contracted HIV from a blood transfusion, spent the rest of his life raising awareness and fighting discrimination against people with HIV, and died at age eighteen in the year the act passed. As of this writing, the act has been amended and reauthorized four times, most recently in 2009. Though its full name has changed slightly (the latest version was called the Ryan White HIV/AIDS Treatment Extension Act of 2009), it’s generally known simply as Ryan White.
Ryan White helps supplement the cost of care for hundreds of thousands of HIV-infected Americans. In particular, it covers the costs of most medications through the AIDS Drug Assistance Program (ADAP) and outpatient clinic costs through its Part A (supplying funds to the cities hardest hit), Part B (to states), Part C (directly to adult clinics), and Part D (directly to clinics providing care to women and children with HIV).
Among American healthcare consumers overall, there continue to be enormous disparities in healthcare outcomes between the Haves and the Have Nots. With that in mind, consider how remarkable this next statement is: In roughly a dozen years, Ryan White has virtually eliminated health outcome disparities among HIV patients (for those who are in care) by supplementing their cost of care.
The practical effect of this was nicely demonstrated in a paper published in 2012 by Richard Moore, Jeanne Keruly, and John Bartlett from Johns Hopkins University. They examined health outcomes among all the patients attending their HIV clinic in East Baltimore and showed that folks with the lowest annual income had exactly the same outcomes in terms of life expectancy and virologic success as those with the highest incomes. In almost every other disease condition and clinic across the country, patients with lower incomes uniformly have worse outcomes. For those in care, the health disparities expected with HIV have been mostly eliminated via funding through the Ryan White program.
Ryan White has provided money as a godsend to most AIDS clinics in the country, including the 1917 Clinic. Ever since Dr. Bennett approved the clinic with his terse directive—“just try not to run in the red”—a key part of my job has been finding operating funds. If we’re all to keep riding this rocket, it’s largely up to me to keep fuel in the engine. From one year to the next, I usually don’t know exactly how I’ll get it. But I have to figure out something, because as I’ve come to realize, magical thinking can do little about funding.
When we started the clinic, most of our patients couldn’t afford medications, so we put them in drug studies where they could get the newest, best drugs at no cost. We were too busy trying to stem the epidemic to pause and ask the question: How did those drugs get to be so expensive in the first place? Now, we’ve asked and answered. And in the process, I’ve pretty much lost my innocence about two of the big-money aspects of drug development: the creating and testing of new drugs, and the marketing of same.
Let’s discuss the marketing first, in honor of Howard (Howie) Reiss. Howie was a hustler, but in a good-natured and respectful way. A pharmacist by training, he went into the field of health communications and became a consultant to pharmaceutical companies, helping them strategically position new drugs in the marketplace. Born and raised in Queens, Howie was a quintessential New Yorker: aggressive, witty, and endearing. He was relatively short, a bit overweight, and had a boisterous, infectious laugh.
What’s more, Howie was wicked smart. Not just intelligent, but street smart. A survivor. To the “thought leaders”—those physicians and researchers who were labeled by the pharma companies as the ones to whom others listened—he was the consummate gentleman, always attentive, engaging, and encouraging. Fun to be around. To the staff who worked for him, he was sharp, terse, demanding, and impatient. “Fix it, Fax it, FedEx it!” were his frequent orders as problems emerged. He had a way of always getting things done, and done well.
In December 1989, I received a call from Howie inviting me to participate in a “Treatment Workshop” for AZT in San Francisco. He told me I was an “up-and-comer,” a gifted teacher he thought explained things well to others, and someone he wanted to promote as a thought leader in the HIV/AIDS arena. I had never met Howie before, but I immediately liked him, partly because he was so complimentary: As a young assistant professor, hearing someone say such nice things about me was attractive, if not intoxicating. There was also an instant connection because Howie was a lonsman, a fellow Jew, and he talked about wanting to make a difference.
Howie said he wanted me to be on a panel with MDs whom I admired and who already had become legends in the HIV field: UCSF’s Paul Volberding, Margaret Fischl of the University of Miami, Larry Corey of the University of Washington, and Doug Richman of the University of California–San Diego. Howie said that I and another rising investigator, Rob Murphy from Northwestern in Chicago, would be the “new talent” he wanted to develop and give exposure to. And he encouraged me to bring Amy along so that she could enjoy the experience as well. How could I say no to such an invitation?
The meeting was held in the Fairmont Hotel on top of Nob Hill in January 1990. Plane tickets for both Amy and me were provided. When we landed in San Francisco, we were met by a driver holding a sign seeking “Dr. Saag,” who then took us to the Fairmont in a stretch limo. Amy looked at me and asked, “What did you do to get this kind of treatment?” I simply shrugged and thought, Howie sure knows how to take care of his faculty.
As Amy and I were heading to our room after checking in, we walked by one of the ballrooms, which seemed to have been transformed into a television studio. Always intrigued by anything to do with visual media, I peeked my head in to look around. On risers in front of rows of chairs was a long table covered with blue velvet, with microphones laid out in a row along the tabletop. Three large, studio-quality television cameras were being moved around on casters by crewmembers. Floodlights were being adjusted and sound checks were under way.
Out of the chaos I heard a voice: “Dr. Saag!” A rapidly approaching man stuck out his hand and said, “I’m Howie Reiss. So glad you are here! Nice to meet you—and Mrs. Saag, delighted you could join us.” He briefly described the agenda for the weekend: We would rehearse the session tonight and shoot it tomorrow morning. We’d then go by bus to the Napa Valley for a wine tasting and dinner at Tra Vigne, a world-class Italian restaurant. We’d be bused back to the Fairmont Saturday night and depart for home on Sunday. Amy and I were overwhelmed. As we headed to our suite high in the Fairmont tower, I felt like a rock star.
The panel discussion Saturday morning was moderated by Paul Volberding. We were going to discuss the flow of optimal patient care: how to diagnosis HIV and “stage the infection” (that is, how to tell how far along the patient was in the course of the infection), how and when to treat with antiretrovirals, how to look for and manage the complications of therapy, and what to expect in the long run. The panel was stacked with all these heavy hitters … then Rob Murphy and me. Naïvely, I figured that if they asked me to be there, I belonged there. I assumed they simply wanted me to represent what I saw from the trenches of care in Alabama, sort of a reality test of how the clinical trials results were translating into the real world.
I participated with energy and, where possible, with humor. I had done enough television in college to know that nothing is more boring than a bunch of talking heads droning on about a bunch of technical data. I figured I’d take the role of the “color commentator,” and it seemed to work. Afterward Howie rushed up to me and said, “You’re a natural! We need to do this more often.” After the way Amy and I had been treated on the trip, who was I to argue?
In retrospect, that weekend was a turning point in my career. I had a chance to participate in an event with the big names in the field and held my own. More importantly, the social events on Saturday afternoon and evening gave me the chance to really get to know the other faculty members as professionals and as people. I learned about wine from Doug Richman and about the difficulties of performing the first AZT trial from Margaret Fischl; I learned how much I had in common with Paul Volberding—children roughly the same age, a similar sense of humor, and shared values about why we entered medicine. It was the beginning of treasured friendships that continue to today.
I knew that Burroughs Wellcome (BW), the maker of AZT, funded the entire event. Howie explained to me at dinner Saturday night that BW’s concept was to educate as many providers about HIV as possible so that they could diagnose more patients and get them started on appropriate medication. A simple statement, and one that seemed logical. But from there on, as I learned and thought more about this realm, it gradually would become less clear-cut.
Howie was employed as a strategic marketing consultant for BW. As such, he would meet frequently with Marty Hunnicutt, the product manager for AZT at BW, to brainstorm how to increase sales of the product. But as Howie phrased it, Marty didn’t have to sell AZT; all Marty had to do was sell HIV as a disease that needed to be diagnosed and treated and, since AZT was the only drug on the market at the time, the drug would sell itself. Howie had taken this approach previously when BW launched the drug acyclovir for the treatment of herpes infections. Experts such as Richman and Corey had participated in that launch. Now Howie was expanding his reach and vision into HIV and AZT by nurturing new “talent” such as Rob Murphy and me.
The “sell the disease” approach was a win-win for BW, creating the appearance that the company was engaged and concerned about the epidemic and physician education while, oh by the way, selling their drug. And somehow for us, the “thought leaders,” it allowed us to stand apart from the selling of AZT. We were doing what academic physicians are supposed to do—educating—and we were passionate about it. It was a near-perfect marriage of academia and industry, each serving its own interests and thereby serving the other’s.
It turns out Howie was well ahead of his time. He was one of the first to pitch selling a disease as a means of creating market share for a new drug product. In his case, he pitched the disease by offering knowledge and continuing medication education to healthcare providers in order to secure market share.
Letting AZT sell itself simply by educating providers about HIV worked well until competition arrived. In 1991 Bristol Myers Squibb’s (BMS) drug DDI was approved, followed soon thereafter by DDC (Roche, 1992) and D4T (BMS, 1994). As the field moved from one drug and one company to four drugs made by three companies, the battle over market share began, and the thought leaders were in the middle of the crossfire.
Since HIV was such a youthful field populated by mostly younger investigators, there were only a few key speakers to go around on the lecture circuits. Richman, Fischl, and Volberding were in the highest demand, but all of us were receiving invitations to speak almost daily. The typical road trip consisted of a visit to a major city, where we were picked up at the airport by the local drug rep and maybe his or her regional manager. They escorted us to speak at a series of “grand rounds” at local hospitals and the local medical school. On the ride from venue to venue, the drug rep would give a profile of who the major local treaters were. Often, the manager would chime in with a concern about the need to get this or that “message” to the treaters. The manager’s plea might go like this: “Dr. Saag, I am not telling you what to say, but it would really help us out if you could cover the results of study XYZ to emphasize the problems with drug A”—the competitor drug. And the unspoken message was, “We just spent money flying you in and we’re paying you $1,000 per lecture, so how about helping us out here?”
Having been raised on the Eddie Saag Code of Honesty Above All, these attempts at influence made me squirm. I felt certain I could resist them and keep my integrity while giving providers information they needed, which was the point. To my mind, my fellow speakers and I were educators. To our audiences, we were experts who could offer the latest data and put them into perspective for use in clinical practice. But to the drug company, we were a marketing tool. Merely by bringing us in, they could get face time with a large number of their area’s high-level treaters all in one place, an opportunity they didn’t get often. And if Dr. Expert’s remarks aligned with what the company wanted the audience to hear, so much the better.
Regardless of which company we were being asked to speak for, my colleagues and I pretty much used the same slides in our presentation and gave the same spiel. In many ways it was like vaudeville; we were on the circuit, telling the same story—and, in my case, the same shtick— from town to town. When the drug company reps prompted, the temptation always was there to emphasize the virtues of their drug or linger a bit longer on the adverse effects of the competitor’s drug. Try as we might to skirt the sponsoring companies’ requests and present a balanced assessment of the drugs, none of us felt good about being treated like a spokesperson.
Frustrated with this state of affairs, Paul Volberding, Doug Richman, and Margaret Fischl came up with an idea. They would found a not-for-profit organization whose mission was to provide unbiased education and drug information to providers in the major US cities where HIV was hitting hardest. It would organize educational events that drug companies would fund—but it would pool funding from multiple companies with competing products, so no single company or donation could influence an event’s content. Paul had just stepped down as president of the International AIDS Society (IAS), the Swedish-based entity that sponsors the large annual conferences, and he wanted to create an IAS subsidiary in the United States. By the time the founders learned they could not affiliate the new US nonprofit with the foreign-based entity, they already had named it IAS-USA. The name stuck.
For the IAS-USA’s founding executive director, Paul thought of a young, energetic staffer he had met while working with Howie Reiss on an HIV treatment monograph. Donna Jacobsen was born and raised on Long Island. After college she worked in a lab at Memorial Sloan Kettering Hospital in Manhattan until she joined the health communications firm where Howie worked. Donna is a thorough and disciplined executive whose blue eyes narrow with intensity when she discusses projects. She is never intimidated by the medical “big names” who participate in IAS-USA events. She expects them to meet deadlines and do things “the right way,” meaning with the highest professional integrity and without commercial bias.
In 1993, I joined the board of directors of the IAS-USA. In that role, I’ve learned a lot about medical education, including how drug companies used thought leaders—also called Key Opinion Leaders (KOLs)—to market messages that help sell drugs. Here’s how it works:
Using this approach, the companies try to manage the KOLs to help them stay true to the company’s strategic sales messaging. “I have total freedom to say whatever I want in any lecture I give,” is the retort I hear most when a KOL is asked if there is bias in their presentations. And they’re right: Most of them are presenting the information they want to present when they lecture. But they usually aren’t aware that the company that just asked them to speak at a given meeting has followed their every lecture, creating a dossier on them, and knows precisely what they are likely to say even before they take the podium.
Back in the 1700s and early 1800s, remedies of different sorts were sold by traveling salesmen to a vulnerable public. Their potions were typically extracts from roots or plant leaves, and the concentration of the active ingredient could vary widely from batch to batch, ranging from so high that it was toxic to so low that it had no human effect. To get a handle on these products and the swindlers who peddled them, the 1906 Pure Food and Drug (“Snake Oil”) Act was passed requiring “truth in labeling.” It led to the establishment of the US Food and Drug Administration (FDA) whose responsibilities include “assuring the safety, efficacy, and security” of drugs and medical devices.
By the time I got involved in drug development research, there were exhaustive federal regulations governing practically everything I do in the clinical lab and everything drug companies do to take candidate drugs from concept through clinical trials to FDA approval. The process goes roughly like this.
Each company developing drugs must first identify a lead candidate or two and assess their activity in the lab. They then must assess the lead drugs’ safety, absorption, and elimination in the body to predict the proper dose range; that often starts with animal models before the drugs are introduced into humans. This is a highly creative and expensive, mostly trial-and-error process with vastly more failures than successes. And it’s only the first step toward creating a product to be sold; after investing millions, when successful, the company is granted permission to go to the next step and spend more.
At the outset, tens of thousands of compounds are screened for potential medicinal activity. Once a few “hits” are identified, the compound is critically evaluated and the chemists go to work making minor adjustments to its structure to help it be more active, or better used, or more efficiently retained by the body. This iterative process, which can take months or even years, ultimately yields one or more “lead compounds.” The process of drug identification, optimization, testing in animals, and all the work prior to testing in humans is called preclinical development. By now, we’re spending real money—millions and millions and millions, without (yet) selling a single pill. All the money is going out, and none of it is coming back to the company and its investors.
Next come clinical trials with humans, with risks that warrant big insurance policies to keep the companies from being bankrupted by a single small error. (Can you spell “thalidomide”?) These are typically divided into four phases. The testing goes from one to the next, and each successive phase involves larger groups of test subjects and helps scientists answer different questions.
By the time approval is granted, this process has wrung money from companies like water from a soggy washcloth. Costs in the preclinical period can range from $20 million to $150 million. Some compounds are so chemically complex or difficult to synthesize that the scale-up needed for drug production is deemed cost prohibitive, so they are sent back to the chemists for modification. Such obstacles and delays lead to increased costs.
Phase I studies, although intense, require only a few dozen patients treated for a short period of time. Their cost is on the order of only $10 million. Usually there are several Phase II trials, each involving from dozens to hundreds of subjects, costing upwards of $100 million. The Phase III studies are the most expensive, involving several hundreds of patients each and costing upwards of $300 million. Once data are generated from the two pivotal trials, the drug company team prepares a dossier of information on the drug to be submitted to the FDA for review and approval. Simultaneously, the company has already begun building or has built plants to produce the drug according to FDA-approved manufacturing practices that ensure each tablet is pure and created to the proper specifications. This effort adds to the expense.
Taken together, the cost of drug development from conception of an idea to the approval of the drug—including the new product launch costs such as marketing and distribution—is approximately $1 billion to $1.5 billion per new drug in today’s world.
I am not privy to how drug companies determine the price of their new drugs. I know many factors are involved, including the actual cost of ingredients, competition, need, uniqueness of the product, and the ability of the market to afford the new drug. Having watched the launch of a lot of new drugs since 1987, it appears to me that some sort of formula is used whereby the cost of drug development (say, $1.5 billion) is divided by the estimated number of pills that will be sold in the first eighteen to twenty-four months after the launch. The number of pills is determined by the number of patients estimated to take the drug prescribed, the number of pills per dose, the number of doses per day, and the length of time the drug will need to be taken. Maybe the formula is more sophisticated than this, but it seems almost certain that pricing enables the company to recover its cost of drug development in one or two years after initial release. From that time until the patent for that drug expires—usually twenty years after the company’s filing of an Investigational New Drug application with the FDA—each drug is a profit center for its manufacturer. (I do know, for a fact, that if the company makes no profit, its investors get no returns and the company soon disappears.)
Companies can also sell a so-called “off patent” drug; it just will be less lucrative, as it may have competition from generic drugs once the patent expires.
Let’s test-drive my imagined formula for recouping drug development costs. Suppose that new Drug X, which cost $1.5 billion to develop and a few cents per pill to manufacture, will be taken by 1 million patients in its first eighteen months on the market. Each of those patients will take four pills a day for thirty days. If the manufacturer of Drug X were to set its per-pill cost using my formula, it would divide $1.5 billion by 4 × 30 × 1 million—and the drug would sell for $12.50 per pill. In the case of drugs used for common diseases, more patients would take the drug and the per-unit cost could be lower. However, for rarer diseases that affect only a few hundred people per year, the per-unit cost could be prohibitively high, on the order of thousands of dollars per dose.
But what a pharmaceutical firm charges also depends on what buyers will pay. Most often, large payers such as insurance companies, large pharmacy chains, and the US government can negotiate bulk rate purchases of medications at some discount off the average wholesale price. That seems fair, right? But typically, the US government does not get as big a discount as do governments in other Western countries. Why? Because most other countries have single-payer healthcare systems that can negotiate for lower, fairer pricing. The US has no single-payer healthcare system, in part because opponents of such systems—many of them heavily funded by lobbyists for drug companies—have fanned opposition to them as “socialized medicine.” The result is that the United States and its people end up footing a disproportionate share of the costs of drug discovery and development for the rest of the world. We get stuck with this bill in large part because of our inability to negotiate as a single agent with pharmaceutical companies and our chaotic payer system.
And that, as we say in Yiddish, is the shanda—the crying shame. Because we pay disproportionately more for brand-name pharmaceutical drugs, we foot the bill of drug development for the rest of the world. As my colleague James Willig frequently says when there’s some burden to be shouldered, “Everybody should bleed a little.” In the case of drug development, the United States is hemorrhaging while everyone else reaps the benefits.
Meanwhile in Washington, D.C., the discussion is about budget cuts and fiscal constraint while policies are approved that prevent cost savings. Mistaken thinking is elevated to near insanity in some “austerity proposals” that would call for dramatic, across-the-board cuts, including the R&D budget of the NIH, one of the few drug-development sources where we actually save money. No public outcry is mounted because the general public has no sense of how the economics of healthcare research work. Most of us don’t know which dollars are costs and which are investments, which save lives and which save dollars. For most of us, it’s all just “bloated budget.”
In fact, research that yields cures—remember the vial of fluid that was my first lab “project”?—happens largely in places like my medical school at the University of Alabama at Birmingham. We get maybe 10 percent of our budget for faculty from the state, maybe 10 percent from tuition; all of this is fairly fixed and pays for education. But roughly 80 percent of the money that pays medical school research faculty salaries at places like UAB comes from research grants, mostly from federal sources. Without these grant dollars, medical schools and other institutions of higher learning would only have at best one-half to one-fifth of their current faculty available for teaching, and that’s if they were teaching full time and doing nothing else. Reductions in this federal research funding would at least weaken today’s medical schools. A significant reduction might well destroy medical, dental, and nursing education as it now exists in this country, as well as devastate vital R&D entities such as the NIH. Federal spending in these areas has been flat for the last twelve years and continues to be on the chopping block. These are very, very expensive “savings” because the cost of lost opportunity and real patient care combine to a higher total than the dollars not spent. Every passing year, the costs go higher as the cuts go deeper—like trying to dig your way out of a hole by going deeper and deeper.
As a result, we are—right now, as I write—losing an entire generation of PhD researchers who have no other options for employment. Some aspiring MD researchers may find a way to work as a physician provider, as I did, but will not be able to pursue their interest in research. Just days into 2013, I got an email from a talented, frustrated colleague asking the plaintive question, “Is research dead?” He had just heard that a superb young researcher he knew whose grant proposal was at the top of the list at NIH still had not gotten funding.
I had the unhappy task of telling this gifted scientist that until Congress stops its partisan warfare and passes a continuing budget resolution, NIH is unlikely to approve any new funding. And honestly, while I could hope that funding is only delayed, I could offer him no reassurance that it would not be cut, or even eliminated. “Then my lab is dead,” responded my colleague, who was counting on a near-term NIH grant to keep a key project afloat. “I already had to let go my best technician … I may not have the funds to hold my other lab members, let alone continue my actual research.”
This is an emerging national tragedy rapidly, and quietly, approaching the level of a crisis. When our congressional representatives talk about cutting what they call “discretionary spending,” they seem not to realize that cuts to NIH and other national science agencies constitute triple whammies. Such cuts restrict the country’s scientific advances, deplete faculty at our universities, and risk sacrificing an entire generation of young scientists whom we’ll never be able to get back. These are all losses of knowledge; the consequence is loss of life.
Some forecasters believe we’re already seeing the cascade effect as the brightest of would-be scientists, seeing how little their nation values them, are pursuing other opportunities.
So someday soon, when Senator Shortsighted’s daughter develops a genetically influenced growth disorder and he asks if there’s really nothing doctors can do, the truth will be, “You shut down the lab that was within months of finding the answer.” And when Representative Heedless wonders why his wife’s coughing can’t be stopped, and he hears the physician say respiratory syncytial virus, someone should lean in and tell him that we had the science, but he stopped the funding, so knowledge never became cure.
When I get into discussions like this, I remember the scene from the 1976 movie All the President’s Men where the shadowy source known as Deep Throat told reporter Bob Woodward that to solve the puzzle of the Watergate break-in and cover-up, he should “follow the money.” If you look at advances in medicine and healthcare in the last half century and you follow the money, here’s what you see:
I have health insurance. My children are insured. I think of the US insurance industry as no different or more difficult than any business. But the current moneymaking model leaves health insurance’s interest competing with the patient’s interest before he or she walks through the door. As a for-profit business, an insurance company must do its utmost to make money for its stockholders. Its first obligation is to the people who buy its stock, not the people who buy its insurance. Unhappily, when the insurance “customer” becomes a “patient,” he or she turns into a liability whose costs should be minimized to maximize profit for the shareholder.
It’s complicated: Retirees are living off dividends paid by insurance companies in whom they’ve invested. But when the retiree becomes “a patient,” her dividend check is best protected if she doesn’t cost much.
As investment opportunities, health insurance companies are doing well. Consider this: In the depths of the global recession of 2009, America’s five largest for-profit insurers had a combined profit of $12.2 billion, up 56 percent over the previous year, according to the advocacy group Health Care for America Now (HCAN). Then consider this: Also in 2009, HCAN reported, while our five big insurers profited handsomely, they also cancelled policies for their costliest patients and raised premiums on other policyholders. Ouch.
When Ben Franklin gave us insurance as a concept, I think he had a fine idea. But if Brother Ben took a hard look at what we have today, I think he’d revolt. In the current system, the companies selling insurance have interests aligned directly with their shareholders (make money) rather than with their patient policyholders (provide care).
There has to be a way to do both. Imagine a health insurance company whose “insureds” were their shareholders. In this model, any savings created by the efficient operation of the company would lead to one of two great outcomes for those they insure: lower premiums or enhanced services. In recent years, the shareholders of for-profit insurance companies in the United States have enjoyed annual profits averaging 9–12 percent. Imagine how much improvement in care and health that could buy for America’s patients (also known as us).
For me, every discussion of healthcare costs comes back to the personal stories of patients—people like Joe and Brian. Throughout the entire course of Brian’s illness, Joe stood by his side physically, emotionally, spiritually—and financially. When Brian’s insurance proved woefully insufficient, Joe footed the bills, assuming enormous debts on credit cards and other loans. On more than one occasion, he narrowly avoided declaring bankruptcy. To Joe’s great credit, he never thought twice about bearing this responsibility for Brian’s care. He simply did it because he thought it was the right thing to do. My father would have pronounced him a “good American.”
For a while, AZT kept Brian in pretty good shape. For Christmas 1990, his gift to me was a chalk drawing of a big, vivid flower and, for Christmas 1991, a drawing of a bunch of balloons. Then, as with so many patients, the AZT began to fail Brian and opportunistic infections swept in. By summer 1992, we were fighting multiple infections with potent drugs—including one that, with continued use, might have prolonged life but would have caused deafness.
I consulted with Brian, with Joe, and with Brian’s mother, Irene, another of the steadfast moms who had been there throughout her son’s ordeal. None of us could bear the thought of Brian being plunged into silence again, so that drug was dropped. Brian went home from the hospital in the fall and lived only a week more. Talking on the phone with Joe and Irene after Brian died, it felt as if they were consoling me as much as I was consoling them.
A dozen years after Brian’s death, his artwork still hangs in the 1917 Clinic. A dozen years after Brian’s death, Joe has only just paid off the last of his healthcare debts.