Tuesday, December 3, 2013

As Hospital Prices Soar, a Stitch Tops $500 - NYTimes.com

With blood oozing from deep lacerations, the two patients arrived at California Pacific Medical Center's tidy emergency room. Deepika Singh, 26, had gashed her knee at a backyard barbecue. Orla Roche, a rambunctious toddler on vacation with her family, had tumbled from a couch, splitting open her forehead on a table.

On a quiet Saturday in May, nurses in blue scrubs quickly ushered the two patients into treatment rooms. The wounds were cleaned, numbed and mended in under an hour. "It was great — they had good DVDs, the staff couldn't have been nicer," said Emer Duffy, Orla's mother.

Then the bills arrived. Ms. Singh's three stitches cost $2,229.11. Orla's forehead was sealed with a dab of skin glue for $1,696. "When I first saw the charge, I said, 'What could possibly have cost that much?' " recalled Ms. Singh. "They billed for everything, every pill."

In a medical system notorious for opaque finances and inflated bills, nothing is more convoluted than hospital pricing, economists say. Hospital charges represent about a third of the $2.7 trillion annual United States health care bill, the biggest single segment, according to government statistics, and are the largest driver of medical inflation, a new study in The Journal of the American Medical Association found.

A day spent as an inpatient at an American hospital costs on average more than $4,000, five times the charge in many other developed countries, according to theInternational Federation of Health Plans, a global network of health insuranceindustries. The most expensive hospitals charge more than $12,500 a day. And at many of them, including California Pacific Medical Center, emergency rooms are profit centers. That is why one of the simplest and oldest medical procedures — closing a wound with a needle and thread — typically leads to bills of at least $1,500 and often much more.

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Monday, December 2, 2013

Ian Parker: The Search for a Blockbuster Insomnia Drug : The New Yorker

One evening in late May, four senior employees of Merck, the pharmaceutical company, sat in the bar of a Hilton Hotel in Rockville, Maryland, wearing metal lapel pins stamped with the word "team." They were in a state of exhausted overpreparedness. The next morning, they were to drive a few miles to the headquarters of the Food and Drug Administration and attend a meeting that would decide the future of suvorexant, a new sleeping pill that the company had been developing for a decade. Merck's team hoped to persuade a committee of seventeen, composed largely of neurologists, that suvorexant was safe and effective. The committee, which would also hear the views of F.D.A. scientists, would deliver a recommendation to the agency. If the government approved suvorexant—whose mechanism, inspired partly by research into narcoleptic dogs, is unlike anything on the market—it would be launched within a year. Some industry analysts had described it as a possible blockbuster, a term usually reserved for drugs with annual earnings of a billion dollars. Merck had not created a blockbuster since 2007, when it launched Januvia, a diabetes drug. The company was impatient. A factory in Las Piedras, Puerto Rico, was ready to start production.

David Michelson, who runs Merck's clinical research in neuroscience, said of suvorexant, "It's huge. It's a major product." He was sitting perfectly still in his chair; his hair flopped a little over his forehead. He looked as if he were waiting in an airport for a very late flight.

For months, in rooms across Merck's archipelago of mismatched buildings north of Philadelphia, Michelson had taken part in role-playing rehearsals for the F.D.A. meeting. The focus had been on readying Joe Herring, another Merck neuroscientist; he would be the primary speaker, having run the later clinical trials of suvorexant. Herring, a straight-backed, athletic-looking man in his fifties, had just gone up to his room, for an early night. "Joe had to find a way to be authentic," Michelson recalled. "He had to find a way to engage with the audience without becoming too informal." During the meeting, Herring would have access to a library of twenty-one hundred and seventy PowerPoint slides.

The Merck team was frustrated. The F.D.A. had just shown them the draft of a presentation, titled "Suvorexant Safety," that would be delivered by Ronald Farkas, an F.D.A. neuroscientist who had reviewed thousands of pages of Merck data. In a relentless PowerPoint sequence, Farkas made suvorexant sound disquieting, almost gothic. He noted suicidal thoughts among trial participants, and the risk of next-day sleepiness. He quoted from Merck's patient notes: "Shortly after sleep onset, the patient had a dream that something dark approached her. The patient woke up several times and felt unable to move her arms and legs and unable to speak. Several hours later, she found herself standing at the window without knowing how she got there." A woman of sixty-eight lay down to sleep "and had a feeling as if shocked, then felt paralyzed and heard vivid sounds of people coming up the stairs, with a sense of violent intent." A middle-aged man had a "feeling of shadow falling over his body, hunted by enemies, hearing extremely loud screams."

An F.D.A. presentation that focusses on individual "adverse events"—and draws attention to patients feeling "hunted by enemies"—is discouraging to a drug's sponsor. Michelson called the presentation "somewhat unusual," and emitted a dry laugh.

Darryle Schoepp, the head of Merck's neuroscience division, was at the other end of the table. During the human trials of suvorexant, he noted, it had been taken two hundred and seventy thousand times, and "every time you take a drug it's an opportunity for something to happen that the user can report." He added, "Go back to the early days of Ambien. I wonder how many patient days of data they had with Ambien."

Ambien, which is now available generically as zolpidem, is one of America's most popular drugs, and it played a role—silent or spoken—in many conversations that I had heard on visits to the Merck offices. Zolpidem was the cheap drug that suvorexant had to take on, if not unseat, in order to succeed in the sleep-medication market. In addition, rising public worry about risks associated with taking Ambien—ranging from amnesiac devouring of Pop-Tarts to premature death—had reduced the F.D.A.'s tolerance for side effects in sleep medications.

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