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#TBT: Innovation, Then and Now

January 29, 2015

As part of our “Throwback Thursday” blog series, we’re taking a look at a topic that’s currently in the news and tagging it with previous research, videos or commentaries in a relevant way. As the saying goes, “what’s old is new again” – and we hope you enjoy our wonky twist on #TBT.

When Health Affairs published its September 2001 issue featuring a series of articles focused on the value of innovation, top researchers weighed in on several key questions. Is innovation in medicine worth it? Do these innovations make us healthier? Can we afford it?

If these questions sound familiar, that’s because 14 years later, they still dominate the health care landscape and will be among the conversations at Health Affairs’ February 5 briefing and issue. How did experts answer these questions in 2001?

  • In “Are The Benefits of Newer Drugs Worth Their Cost? Evidence From the 1996 MEPS,”Dr. Frank Lichtenberg, an economist at Columbia University, analyzed spending on newer prescription drugs and examined whether the pricier prescriptions offset other costs. He found that people who used newer prescription drugs were less likely to die or to lose time at work, and they spent fewer days in the hospital, offsetting non-prescription costs by a factor of four.
  • Dr. Mark McClellan and David Cutler’s research, “Is Technological Change in Medicine Worth It?” explored the balance between health spending and benefits. They examined costs in five major disease areas, and found that in four of five areas examined, benefits outweighed costs, and in the fifth, disease costs and benefits were equal.
  • In “Perspectives on the Pharmaceutical Industry,” Dr. Uwe Reinhardt of Princeton University tackled a big-picture question. Can we really afford to spend on pharmaceuticals within our larger economic priorities? His analysis showed that increased spending on pharmaceuticals was driven by new treatments in drug classes like antihistamines, antidepressants, cholesterol reducers, and anti-ulcerants. Yet he found that this spending accounted for a small fraction (1.4%) of our Gross Domestic Product (GDP), and that American consumers were spending more per capita on alcohol, tobacco, and entertainment combined ($413) than on pharmaceuticals ($358).  
  • In “The Price of Progress: Prescription Drugs in the Health Care Market,” J.D. Kleinke told us that increased spending on pharmaceuticals could not explain the insurance premium increases of the time and sounded a cautionary note that potential policy changes designed to exert governmental control over the profitability of pharmaceutical research and development might squelch future advances in health, largely driven by the private sector.

Each of these articles provided keen insights into questions on innovation, and each paper, which makes a strong case for the affordability and broader economic benefits of improved treatment options, is still relevant today.

And while #TBT focuses on the past, we’re very interested in hearing how researchers are thinking about the answers to these questions today. Since 2001, we’ve seen great leaps in biopharmaceutical innovation, with targeted therapies and a cure for Hepatitis C, and the health care sector in general is moving from a system focused on paying for the volume of services performed to one focused on the value of the health outcome. How will the answers change, given these significant developments?

We’re looking forward to the conversation with Health Affairs on February 5 at the W Hotel in Washington, DC, where we’ll hear leading researchers address these issues. We hope to see you there.

The National Pharmaceutical Council is among the co-sponsors of Health Affairs’ February issue, as we were in September 2001. 

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