Sobel Medical Associates, Ltd. - Comment

REGULATED ROYALTIES In order to stabilize pricing in the overall health care system, and to further the goal of the overall health of the nation, the laws governing pharmaceutical agents are hereby reformed. Joining the fee-for-service schedule currently used for physicians, ancillary testing, and hospitals, pharmaceutical agents (drugs and biologics) and new technologies (diagnostic and therapeutic) will be price regulated in the Medicare program. Reassessment as currently performed will be updated to continue to refine clinical analysis of relative benefit. To continue to promote innovation, prices would reflect royalties (an indefinite patent) to give stable income to the pharmaceutical industry to support ongoing clinical surveillance, pharmaceutical-grade manufacturing, and the long-term basic and clinical research that will continue to modify the state of the art. Existing drugs will be reassessed and the current generic market will be reorganized as brands either continuing from a current generic maker or returning to its original patent holder. As unnecessary complexity threatens safety but new developments must be considered, the simplification of the pharmacopeia where new and old can co-exist will be a respected principle guiding the FDA in its mission. Utilization of pharmaceutical agents will be governed by the patient-physician relationship, with neither financial incentives nor disincentives provided to either party. Thus, activities utilizing financial coercion (formularies, tiered co-pays, drug-benefit programs) will be outlawed. Regulation that is not obtrusive and looks at clinical utility over cost will be under the domain of the FDA. New drugs will be introduced at the FDA's discretion, with introductory pricing eliminating the financial risk if the agent does not prove useful long-term. The payments derived from both public and private coverage could be locally adjusted, with federal, state, and private contributions negotiated amongst the relevant parties. The rationale for the above respects the fact that manufacturing is but a small part of the pharmaceutical process. Pharmaceutical products (oral, injectable, inhaled) are true inventions where long-term impact (overall risk-benefit) is a work in progress. Thus, only long-term, regulated royalties allow prorated reimbursement, correcting the current imbalance which rewards innovation of the new over implementation of the established. Copyright 2009 Robert J. Sobel, M.D.