Everyone agrees that controlling health care cost escalation is vital to cutting our budget deficit.

The problem is that no one agrees how to do it, and yesterday’s kumbayah press release by key stakeholders certainly hasn’t addressed the issue substantively.

The Big O has already ticked-off Big Insurance by cutting payments to Medicare Advantage plans, and the $1.1 billion he tucked into his Economic Hail Mary for comparative effectiveness research has garnered similarly negative reviews from Big Pharma and the Device Makers.

Obama believes cost-effectiveness research can help physicians reduce wasteful or ineffective treatments, especially if they are reminded about the findings at time they write orders.

This could be done by incorporating reminder systems into those newfangled EMRs he’s incentivizing physicians to adopt.

The Hail Mary allocated $400 million to the National Institutes of Health, $300 million to the Agency for Healthcare Research and Quality, and another $400 million to Health and Human Services.

This amounts to a budget increase, not a policy shift for AHRQ. For example, its 2007 guide to pain medication for osteoarthritis explained how a 30-day supply of Lodine cost $170 whereas the same course of treatment with aspirin cost $10.

And CMS has long-since established the precedent of using AHRQ-sponsored research in reaching coverage decisions for Medicare and Medicaid.

Still, the decision raised red flags for Big Pharma, whose trade group was one of the signees in yesterday’s kumbaya press release, and the device makers as well.

Teresa Lee, a VP at the Advanced Medical Technology Association, warned the Wall Street Journal for example that using “this research to deny access to appropriate treatments for patients with (specific) medical histories and needs should not be the objective.”

And on the Hill, Republican Senator Jon Kyl just missed passing legislation that would have prevented CMS from relying on comparative effectiveness research to deny coverage.

Charles Grassley and Russ Feingold, 2 key actors in health reform legislation, voted for that one.

Everyone in policyville slept well last night on news that key stakeholders agreed in principal to help the Big O tackle health care cost escalation.

Today it’s back to a thicket of problems that lie between us and reformland.

One particularly thorny issue is that government-sponsored health plan Obama had proposed during the campaign, the one supposedly designed for Americans who had problems acquiring private coverage.

The plan has been supported by House Speaker Nancy Pelosi, HHS Secretary Kathleen Sebelius and a cavalcade of devotees on the left.

In the afterglow of yesterday’s announcement, the pessimistic few remind us that just last week, every one of those devotees gasped collectively when administration officials implied The Man was open to compromise on the idea.

Was Obama going to cave before serious negotiations got underway? 

No, Obama spokesperson Linda Douglass insisted. The Big O simply stated a willingness to consider any proposal that meets his broad goals. “The administration is open to all ideas for achieving those goals,” she reiterated to the Washington Post.

That did little to placate more than 70 House Democrats who told party leaders they’d reject any bill that failed to include a government-sponsored policy, not to mention 2 unions, which abruptly withdrew from a prominent health reform coalition after it said it would not endorse a public plan.

“It’s way too early” to punt on what the SEIU believes should be a central component of reform, a disappointed Andy Stern told the Post. The union’s president pulled his support from Health Reform Dialogue while taking a swipe at the Big O.

“You don’t make compromises with your allies,” he said. The SEIU by the way, is one of the groups that signed yesterday’s letter to the Big O.

“I took that as a signal to Senator Grassley” a Republican who has vehemently opposed the idea, seethed Len Nichols, director of health policy at the New America Foundation.

(more…)

Big Pharma cut DTC spending by 8% in 2008. It was the first such reduction in the 10 years since the FDA eased restrictions on the practice. DTC spending dropped from $4.8 billion in 2007 to $4.4 billion last year, according to IMS Health.

The drop-off has been chalked up to reductions in new drug introductions and a bit of ill-will directed at the industry by the public and congress.

Critics claim the advertisements, which are proscribed in most countries, inflate costs by encouraging people to request brand-name drugs in lieu of less expensive alternatives.

In response, PhRMA, Big Pharma’s trade group, points to a 6 year-old FTC statement claiming the ads inform consumers about medication options and have not been proven to cause health care cost escalations.

And Pfizer spokesperson Sally Beatty insisted to the Wall Street Journal that its ads raise awareness of health conditions.

“Erectile dysfunction… can be a signal for other serious medical issues, including high blood pressure, diabetes and cardiovascular disease,” she said.

Big Pharma adds that DTC constitutes only 40% of its marketing expenses for prescription drugs.

The remainder targets physicians.

Merck and the Plough, which jointly market Vytorin, shaved their DTC spend on the cholesterol buster from $114 million to $47 million, according to IMS.

That came after Michigan congressmen John Dingell and Bart Stupak denounced the companies for pushing the drug while delaying release of a study that showed Vytorin was no better for most patients than generic equivalents.

“We felt this temporary suspension was appropriate in light of the news coverage,” a Merck spokesperson told the Journal.

Even Abraham Lincoln, in his new role as Rozerem pitchman, took a hit.

Takeda cut DTC advertising for the sleeper by 90% to $14 million. We’re going to miss you too, Abe.