Advances in medicines said to outweigh higher health expenses

Anjetta McQueen

Thursday, Sept. 6, 2001 | 11:17 a.m.

WASHINGTON -- Americans should look beyond the cost of expensive medicines to consider the savings they produce, including fewer and shorter hospital stays, health and economic scholars say.

There's little dispute over whether the research and development of stronger medicines or safer surgeries is driving the decades-long cost increase for prescription drugs, insurance premiums and even visits to the doctor.

But in several essays and reports, health care economists, presidential advisers and other experts take on the issue of expensive medicines and suggest many are paying for themselves: People are staying healthier, living longer and avoiding lengthy and costly hospital stays.

"High-price new drugs may be the cheapest weapon we have in our struggle against rising overall medical expenses," J.D. Kleinke, a health care economist based in Denver, Colo., says in one report being published today in the Health Affairs journal.

Kleinke, for instance, points to the anticoagulants used to treat strokes. A lifetime of care for a severe stroke victim averages $100,000, while therapeutic medicines cost just $1,095 a year, he says. He adds that although prescription drug costs are grabbing a bigger share of all health spending, the share spent on hospital stays is declining.

Yet, the persistent squeeze on personal pocketbooks and government budgets has launched bitter debates across the country. Congress returned this week from a summer break to tackle key health care issues such as Medicare drug benefits, HMO members' rights to sue, and less stringent patent laws that would allow generic drug makers to bring low-priced versions of popular medicines to market more quickly.

Consumer advocates have criticized the escalating health costs, charging that the high prices are driven by demand for greater profits and expensive marketing budgets.

Experts caution that policy-makers should consider the value behind the price tags.

Frank Lichtenberg, an economist at Columbia University, says in another journal study that the continued replacement of older medicine formulas with newer ones has reduced illness, death and overall medical spending. For example, a better drug could cost $18, but knock at least $44 off an average hospital stay -- maybe even more, Lichtenberg said.

The figures are based on a national survey of patients and the treatments and medicines they received in 1996, the latest year that such information was available.

"Drug costs, and changes in drug costs, are visible to the naked eye," Lichtenberg says. "People making drug policy decisions need to consider the full range of effects, not just the costs, of newer drugs."

A pair of presidential health advisers studied the direct benefit of technology and recent breakthroughs on a handful of specific diseases.

Heart disease patients are healthier and more productive, thanks to better medicines and safer surgeries to unclog or repair key arteries, says a report by David Cutler, who advised President Clinton, and Dr. Mark McClellan, a current adviser to President Bush.

The advances saved the government the expense of hospitalizing older Americans on Medicare, the report says, so $7 was gained for every $1 spent on improving treatment of heart attack victims.

Cutler and McClellan also point to another added benefit: "Doctors diagnose disease more frequently when treatments are safer and easier to take, and patients pay more attention to their condition when therapy is more effective."

Another group of scholars say that new drugs in the pipeline, however beneficial, could add an estimated $19 billion to prescription medicine spending by 2004.

But drugs, however costly, are cutting down on the expense of surgeries and other remedies that would be needed without the effective new medicines, Kleinke says. He adds that some insurers are raising consumers' premiums based on the drug costs without passing along the savings on other treatments.