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Wal-Mart, the Four Dollar Pharmacy, and the American Healthcare System

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It has been almost a year since Wal-Mart introduced its four dollar pharmacy plan. Under the plan a selected list of generic medications is available for four dollars for a one-month supply, no matter what the dosage. Whatever you think of Wal-Mart, this deserves a close look as we head into an election season where the American health care system will be an important topic of debate. Particularly because pharmacy costs are driving a large chunk of our wildly inflationary health care spending.

With that in mind, I printed out the entire list of Wal-Mart's four dollar drugs, and sat down to review them. As it turns out, if you put me on a desert island, with only with those drugs, a couple of bottles of aspirin, and a thousand average Americans, I could treat almost everything that came up. Not only that, I could take care of my patients as well as I could with newer medicines, and in many cases, better.

There are several components to this. The first is that older medications for most common illnesses tend to be safer and more reliable than newer medications. That is a marked change from a couple of decades ago. At that time, medications for conditions like high blood pressure and high cholesterol were either marginally effective, or difficult to take, and laden with side effects. But the pharmaceutical industry, which is extraordinarily innovative when harnessed appropriately, came up with a slew of very effective, very well tolerated, once-a-day medicines for most common conditions. Those breakthrough drugs came to market 15 or 20 years ago, and those categories of medicine still serve as the basis for treating most of what ails America. The standard medications for effective blood pressure control, diabetes treatment, high cholesterol, depression, anxiety and most heart conditions fall into that group. The trouble for the pharmaceutical industry is that the patents on the original drugs have run out. They are great drugs, with long track records and safety profiles, and they are now all available as dirt-cheap generics.

In response, the pharmaceutical industry has developed wave after wave of what are called me-too drugs. These are minor variations on the original molecules, and are virtually identical to the original drugs in most cases, but because each one gets a new patent, they remain highly profitable long after the initial medicine goes generic.

If these newer medicines offered clinical advantages, or were safer, there would be a rationale for discussing the cost/benefit ratio, and that is sometimes the case. But as Vioxx, and now Avandia have shown, newer is not always safer or more effective -- and in fact may be the reverse. The reason for this is that the first drug in a new category of medication, gets the vast bulk of the research dollars that go toward truly understanding the effect of the drug. And that creates most of the scientific knowledge base for the whole class of drugs in that class

Most of the research after that is driven by the need for market share. Once a pharmaceutical company comes out with a new category of medicine, be it a cholesterol drug, Viagra, Prozac, or any other new blockbuster category, every other company scrambles to come up with their own version. In general, this just involves tinkering with the molecular structure of the original drug by adding a few atoms here and taking a few away there. The drug companies do try to find some undesirable feature of the original drug to improve upon, but their success at this is generally marginal, and the real intent is to create market share. The result is that the copycat versions of the original drug have far less research poured into their fundamental safety structure and efficacy, and far more poured into head to head trials with their competitors. These trials are usually low quality science, and are often heavily slanted to show minor (i.e. clinically meaningless) differences. This gives the pharmaceutical companies something to market, but rarely has any real clinical impact. This "research" consumes an increasing portion of the research budget of the industry, and in a particularly telling development, a major advertising agency developed its own medical research arm a couple of years ago. When drug companies start farming out their research to their ad agencies, you do begin to wonder.

The whole process revolves around capturing market share for successive copycat drugs as the originals pass into the generic world. Hence the increasing emphasis on marketing over ground breaking research. A series of studies looking at medications for most common American conditions, including hypertension, heart disease, depression, high cholesterol, and diabetes, have shown that the older medications are at least as good as, and in fact seem to be slighter safer than their newer cousins, and at a fraction of the cost.

You can think of many ways of changing the American health care system, but certainly one way is to have the Medicare Prescription Drug Plan move toward insisting on the use of generics, and providing them at greatly reduced cost, rather than the give-away Medicare drug plan we currently have, which funds the pharmaceutical industry more than the patient. The slippery part of this equation is: what to do with those occasions when patients don't respond as well to the generic, older version, as they would to a newer version.

Unfortunately, long experience with both the pharmaceutical industry, and basic human nature, tells us that you can hype this difference out of all proportion. Unfortunately, if you leave any exceptions, the entire program is likely to see wildly escalating costs. Would it be such a terrible thing to say that we can cover 90 or 95 percent of the pharmaceutical needs of America's seniors with a standard, dirt cheap and safer set of drugs, and that if you want to go outside of that, you are on your own to buy some form of market based prescription drug coverage, or pay it out of pocket yourself?

As a physician, I am almost entirely insulated from the cost of my prescribing decisions, so I don't have a personal axe to grind one way or the other. I will point out that it is much easier for me to write a prescription for Zithromax, a very convenient three-day antibiotic dose pack for common respiratory infections, than to prescribe 10 days of erythromycin -- the cheaper, older version of this. The medications are equally effective, but zithromax is once a day for three days, while erythromycin is four times a day for 10 days and is a little harder on your stomach. On the other hand, the Erythromycin would cost you about $3, while the zithromax will run you $70 or so, depending on which pharmacy you go to.

The market reality is that as long as someone else is footing the bill, I, as doctor, and, in fact, I, as patient, would prefer the Z-Pak, but the moment one of us had to pay the additional $70, Erythromycin would start to look awfully good.

The development of Nexium, the famous "purple pill," is one of my favorite stories. Nexium is a proton pump inhibitor, a medicine that blocks acid, and is effective for heartburn. Nexium's story begins back with a medicine called Prilosec, which was one of the earliest proton pump inhibitors. Prilosec, which, if you recall, was the original purple pill, did very well in the marketplace, and made tons of money, but came to the end of its patent life and went generic.

The next part of the story involves a brief foray into organic chemistry. One of the quirks of chemistry is that Nature can put the same atoms together to form molecules in mirror images. It's like giving you an identical left hand, and right hand. They are identical chemically, but mirror images of each other. Either a left-handed or a right-handed fashion when you synthesize molecules in the laboratory, you get both the active form and a mirror image form, in equal proportions. Another quirk of Nature is that it seems to be left-handed, so the left handed molecule is the active form, while the right handed molecule is felt to be largely irrelevant in terms of good or bad effects. Virtually every medicine out there is produced as an equal mixture of left- and right-handed forms, and you swallow both in equal amounts, though only the left handed form does anything.

Some bright chemist figured out how to purify Prilosec. They separated out the inactive right-handed form, and were left with simply the active left-handed form of the molecule. The molecule itself is identical -- but eligible for a patent as a brand new medicine, which was called...Nexium.

Nexium is simply left-handed Prilosec. Oh, and they also upped the milligrams so it's effectively a higher dose of Prilosec. There is no reason to think that it works any better biologically than Prilosec, although it costs 10 to 20 times more per dose. People do swear up and down that Nexium is the only medicine that has helped them, but there is such a strong placebo effect to the action of these sorts of medicines that it is awfully difficult to prove that out -- and in "blind taste test"-type studies no one can really tell the difference. So the question comes up: should we collectively pay the extraordinarily high cost of Nexium, or Zithromax, or hundreds of other drugs, or should we say: we'll spring for Prilosec, but if you want Nexium, it's going to be out of pocket?