The vicious cycle of corporate profit in healthcare: Less healthcare for you

It is a little difficult to focus on writing about the terrible things happening in US healthcare given all the terrible, existential, threats to the nation and the world. Yet it is not unrelated. The abuses and rapacity of the US healthcare system is a microcosm (although, in this country, a BIG microcosm) of the tremendously damaging outcomes that arise from a system that is based upon the insatiable greed of a few and their willingness to use their wealth to fuel lies, wars, and climate change, and to attack democracy, to further line their pockets.

So it is in healthcare. An industry that is ostensibly devoted to maintaining the health of, and treating and sometimes curing the diseases of, the American people is consistently revealed as nothing more than an industry, devoted to making as much money as possible. Pretty much period. It does not, as an industry, care about your health, or that of your family. This is not to say that the people who provide health care do not; almost uniformly the doctors, nurses, pharmacists, therapists, and others are working hard to do the best that they can for your health, motivated by the commitment that took them into their field in the first place. But fewer and fewer of them are in control of their own practices; most are employed, and even those who work for themselves must almost always work with institutions that are corporate and dedicated to that holiest of holies, the bottom line. (To be sure, there are a few independent practitioners who can deliver their services on their own without the involvement of hospitals, drug companies, insurance companies, etc., but there are few and the care that they can provide is almost always narrow and limited. If that is all you need, you are in luck. For now.)

Revelations continue apace about the extent to which this is true, to which almost all efforts in health care are geared toward garnering profit. There is very rarely news that is good for the health of the public, although it often is for the stocks of the corporations involved, the profits of the private equity companies that often own them, or the salaries of the C-suite executives of those that are “non-profit”. We almost never see a change that is likely to increase the quality, quantity or distribution of healthcare even if it might cost the company more. Quite the contrary, changes almost always involve restricting healthcare in terms of what is available and how much it costs the recipient in various ways (premiums, deductibles, co-pays). We also see a consolidation of ownership, frequently involving vertical integration (where, say, the insurance company owns the providers of care -- as in the case of UnitedHealth and Optum -- and essentially pays itself), an exploitation of public funds and redirecting tax dollars intended for healthcare provision into profit (see Medicare Advantage), and a huge amount of money going into profit and incredibly bloated salaries.

I almost said “ever increasing” profit, but this is not true. The amount of profit is not always increasing, although it remains obscenely large. Sometimes this is interpreted by “the markets” (a benign-sounding euphemism for the rapacious predators that they are) as a problem; even when profits are increasing, but not at the rate investors want them to, insurers and healthcare corporations are pressured to further cut back services and increase premiums and charges, always to the detriment of the health of the American people (as per this Wall St. Journal article).

A good summary of the many ways in which the health of Americans is sacrificed on the altar of profit is a JAMA Viewpoint titled “Salve Lucrum: The Existential Threat of Greed in US Health Care” by Donald Berwick, former administrator of the Center for Medicare and Medicaid Services (CMS) and co-founder of the Institute for Healthcare Improvement (IHI). The Latin phrase means “Hail Profit” which Berwick observes was found under a mountain of ash on the mosaic floor of a grand house in Pompeii, and that it would, sadly, be an appropriate motto for many of our healthcare institutions. Berwick goes through the various components of our system, showing how – and how much – they maximize profit by sacrificing health, especially making every effort to tap into “deep pockets” (particularly government-funded programs like Medicare) and avoid the poor, sick, and poorly-insured, even though those often are the people most in need of healthcare.

Medicare Advantage (MA) is the program that takes money from the Medicare trust fund and transfers it to private insurance companies to enroll Medicare beneficiaries in essentially HMOs. MA programs receive more money from CMS than it spends on traditional Medicare beneficiaries and uses some of it to provide services that are attractive and not paid for by traditional Medicare such as glasses, hearing aids, and gym memberships. As with non-Medicare HMOs, some people benefit from the integrated services, absence of co-pays and ease of use, as long as they are happy with the options of providers (always limited). And so long as the services they need are approved by the insurer – remember that MA is not actually Medicare but a set of programs run by private insurance companies that can, and do, deny and delay services, often through a process called “prior authorization”. But whether clients are receiving the healthcare that they need or being screwed out of it, Berwick notes that

By gaming Medicare risk codes and the ways in which comparative “benchmarks” are set for expected costs, MA plans have become by far the most profitable branches of large insurance companies. According to some health services research, MA will cost Medicare over $600 billion more in the next 8 years than would have been the case if the same enrollees had remained in traditional Medicare.

Insurance, including health insurance, companies in the US have always been for-profit with few exceptions (the traditional Blue Cross/Blue Shield, for example, although these have now almost all been converted to for-profit). But the profits that they are making now are extreme. Pharmaceutical companies have always been for-profit and have long been the healthcare industry poster child for overpricing and holding people’s health hostage to their making money. Direct service providers (e.g., hospitals and doctors) have increasingly been acquired by for-profit operations, especially insurance and private equity companies and those that remain officially “non-profit” compete by playing by the same rules as those that are not.

Some of the problems with Medicare Advantage programs have come to the attention of Congress, which is concerned about their exploitation of public funds, but what will come in terms of reform is questionable. Many congresspersons actually believe in the transfer of public funds to private companies. These insurance companies have very deep pockets (from the government) with which to lobby those same officials (kind of like the defense industry). They also cite the increasing percent of Medicare beneficiaries (now over 50%) who have “chosen” MA plans (or, often, been pushed into them by employers, including local governments) as evidence that they are valued. Of course, the healthier you are, the more marginal benefit you get from the MA perks; the sicker you are, the more in need, the more those denials and delays harm your health. And, always, at any given time there are fewer very sick people than those who are relatively healthy, even though serious illness is often in their future.

If Congress addresses MA at all, it is likely to be tweaks around the edges. What, instead, needs to happen is the closure of MA, increasing financing for traditional Medicare to fund ALL health needs for its beneficiaries, regulation of the pharmaceutical industry, and a change to a healthcare financing system, such as Medicare for All, that make the health of the people and not the profit of the corporations, the goal of the system.

How people die, and how should we?

On January 4, 2012, "How Doctors Die"; post on Zocalo Public Square by Ken Murray, I called attention to “How doctors die: it’s not like the rest of us, but it should be” a very articulate discussion by Dr. Murray about how the physicians he knows generally eschew “heroic” interventions at the end of life. This is because they know how futile, and often painful, such interventions can be and how disruptive they can be of the little time that they have left. Physicians know more than most other people about what is likely to work and what is not; they also know more about what is likely to just cause discomfort. I hope that Dr. Murray’s article will be widely read by both the physicians who make recommendations for patients at the end of life and the non-physician public who make decisions about what they want for themselves and their loved ones.

A version of Dr. Murray’s piece later appeared in the Wall St. Journal on February 25, 2012 with the headline “Why Doctors Die Differently”. It is discussed by Dr. Kenny Lin in his blog, Common Sense Family Doctor, “Addressing gaps in end-of-life planning”, March 15, 2012. Dr. Lin focuses on the important issue of “advance directives”, which includes Living Wills and Durable Powers of Attorney for Health Care (DPOAs), mechanisms through which people can help to ensure that their wishes for how they want to be treated – or not treated – at the end of their lives are honored, even when they themselves are not able to make specific decisions. A DPOA designates one person – one with whom, hopefully, you have had serious discussions about what you really want – to be your decision maker. This is very important; while under the law spouses have the right to make decisions, when there is no spouse and are multiple adult children there is no provision for who decides other than DPOA. There is no provision for a majority vote. While it is always best if everyone in the family agrees on a course of action, it doesn’t always happen. There may be several children in agreement, and one who wants something different. Sometimes this ends up in court, with a judge deciding. This is not the best scenario, which is why there should always be a DPOA. It does not solve every problem, but it definitely helps to have a specified decision maker. This issue is also addressed, from a patient and family perspective, in a recent NY Times Op-Ed by Sylvia Jacoby, Taking responsibility for death (March 31, 2012).

Such planning, however, requires thinking about hard issues. You have to decide if you want to have cardiac resuscitation if your heart stops, or be placed on a ventilator (breathing machine) when you can’t breathe on your own, or be “fed” through your vein when you can’t eat. These are all legitimate medical interventions that can have real value when there is an acute problem that is likely to be reversed (someone is temporarily unable to eat or swallow, or breathe on their own, but are likely to be able to in time). Cardiac resuscitation, which involves electric shocks and chest compressions, contrary to what you see on TV shows, hardly ever “works” when applied to people at the end of life whose body is in the process of dying, if by “work” one means a reasonable period of survival. It sometimes gets the heart re-started, but most of the time it happens again. A small percent of people who receive this treatment leave the hospital, and very few are back to “normal”. It is great to do for healthy younger people who have an episode of trauma (like on TV) but is unlikely to have benefit for folks at the end of life.

So why do we do it? Not only cardiac resuscitation, but so many other interventions that are of little or no benefit, especially when the body is suffering from the failure of multiple organ systems. And when, as indicated by Murray and Lin and many others, it is not what doctors want for themselves? As usual there are many reasons. Part of it is that doctors are, by and large, trained to do “whatever can be done” if there is “a chance”. However, a chance of what? This is a big question. To stay “alive” but unaware of one’s surroundings (from dementia, coma, or both), on a ventilator, and often in pain, for a few days, hours or minutes?  Even when doctors think about this issue, they often worry that if they don’t do something, they may be criticized, or even sued, by the patient’s family; they tend to go with the idea that doing something is always safer (from this point of view) than doing nothing.

The whole field of palliative care exists to help people and their families get through the inevitable process of dying with dignity, but there are far too few palliative physicians relative to the number of doctors trained to “do something”. Years ago, a co-worker’s elderly mother was dying in the intensive care unit (ICU). I went to visit. The woman was very far gone and unable to understand anything; the family, several adult children, was being asked to give permission for a fairly invasive procedure. They had been told it might “help”, and asked me what I thought. I was pretty sure it wouldn’t, but first checked with the doctor to see how he thought it would. I then spoke with the family and asked what “it might help” meant to them. They said that they hoped that it would make her “better”. I asked if this meant that she might become conscious, alert, maybe be able to talk with them, maybe be able to say goodbye one last time before she died? Yes, that is what they meant. I gently explained that this procedure might help correct some laboratory values, but that there was no way it was going to make her “better” in the way they hoped, although there was a good chance that she would still experience the pain associated with doing it. They opted not to have it.

Why didn’t the doctor make this clear to them? Perhaps it was because he was young, and wanted experience doing the procedure, and really thought that making lab tests better was “helping”. (There is an old joke that at Harvard students and residents were always pressured to make sure their patients had normal laboratory tests; the patient might die, but it was critical that they did so with their electrolytes in “perfect Harvard balance”.) Perhaps he had been trained to always “do something”. Perhaps he saw this large, hovering family and was concerned that they would be upset, might sue, if he didn’t.

Or perhaps he didn’t know how to talk to them. Is there a social justice issue here? After all, death comes to everyone, and as Dr. Lin points out, advance directives are important for all people to have, not just members of communities that have suffered health disparities. But often the social class or ethnic difference between doctors and patients makes communication more problematic, makes it harder for doctors to know how to best address what are already difficult issues, makes patients’ families suspicious of whether a treatment being offered is “research” being done on someone because they are poor or minority, or, alternatively, whether a treatment is not being offered for the same reasons.

I have cared for many people who were dying but whose families wanted more done. People who already had advanced dementia and whose physical bodies were falling apart. People whose heart and kidneys and lungs were failing, who couldn’t swallow and might choke on even a small amount of food, but whose families believed that if we didn’t do a surgical procedure to poke a hole directly into their stomach we would be starving them; who thought that if we didn’t plan to do cardiac resuscitation or given antibiotics for a possible pneumonia, that we would be killing them. Sometimes I am able to point out that death happens to everyone, and that having your heart just stop, or having pneumonia, or not being fed, are relatively easy painless and natural ways to die. Sometimes I am believed and sometimes not.

While there are, of course, times when a family member is truly “crazy”, paranoid or delusional, a more common issue is that they are just acting out their guilt. The stereotype (because it often happens) is the “son from California”, who flies in at the end of life, has usually not been involved in the care of his parent for years while a sibling (usually a sister) was doing all the work, and who now wants “everything done”. (A really good reason for one person to be designated DPOA.) But sometimes there is simply a trust issue, not being sure that the doctor, especially one from a different class, race or ethnic background, is really treating their parent with the respect that they deserve, with the respect they would give to one of their own family members.

Perhaps if more people understood what Dr. Murray is saying about what it is doctors really want for themselves and their families, or if their doctors took the time and energy and effort to explain it to them, folks would be more able to believe and accept it when the best course is not to do any more.

Disparities in physician income are related to disparities in health

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A major focus of public health, about which I have written several times, is addressing the disparities in health arising from modifiable conditions (such as inequality of opportunity, income, and racial and ethnic differences). While it is common for those with privilege – wealth, health, opportunity – to believe that they have these privileges because they are “deserving”, i.e., because of their hard work, education, etc., such an outlook minimizes the critically important fact that there are lots of people who work just as hard and have very little. The “illegal immigrant”, working 3 minimum (or sub-minimum) wage jobs to try to just keep his or her family fed and housed, is not only not lazy, but working a lot harder than many of us who are able to enjoy weekends off, play golf, watch the kids’ sporting events.

So it is clearly not hard work alone. It is very much influenced by where you start, and what your opportunities have been. These are the social determinants of health (e.g., Social Determinants, Personal Responsibility, and Health System Outcomes, September 12, 2010) and the capability that people have of acting in healthful ways (Capability: understanding why people may not adopt healthful behaviors, September 24, 2010). It is common for people who have a lot to minimize, rather than to emphasize, the degree to which their position at the start of the race has affected their current position. Attacks on those who would seek to redress some of the most egregious inequities are still couched in terms of “economic class warfare” by those who have already won the war. Those with privilege are very concerned about change that would leave them with less of a leg up; they may give lip service to Horatio Alger heroes, but are more likely to wish to follow the model of George W. Bush. “If you’ve spent your entire life with the wind at your back,” a wise sage once noted (and I do not know to whom to attribute it), “a calm day seems unfair”. In terms of health, the connections are very clear. It is good for your health to be born rich. The Horatio Alger hero, pulled up by their own bootstraps, has worse health outcomes than the child born to privilege.

Health disparities, then, are real and important. But why should we – should anyone – be concerned about the disparities in physician income? After all, even the more “poorly” paid specialists, in primary care, make far more than the average American. Yes, they have worked hard to get into and through medical school and residency training, but, just as noted above, so have a lot of other people who will never make nearly as much. The problem is that, if the presence of a larger number/percent of primary care physicians is associated with improvements in the health of the population, and if the presence of wide disparities in income significantly influence students to choose higher paid specialties instead, then these disparities in health status are likely to continue and the overall health of the American people is likely to suffer. There is good data on both counts. Many of the posts in this blog have addressed the first, the positive influence of primary care on the health of the population (e.g., Lower Costs in Grand Junction: More Primary Care, Less High Tech, October 18, 2010; Primary Care, IMGs, and the Health of the People, August 14, 2010; and many others) and on health disparities[1]. I have also addressed the other point, the decrease in the number of students choosing primary care careers (e.g., Primary care specialty choice: student characteristics, July 12, 2010; Primary Care’s Image: A Problem?, November 17, 2009, and others).

A study published in the Archives of Internal Medicine by Leigh, et. al, “Physician wages across specialties”[2], is the most recent effort to quantify the differences. They utilized the large Community Tracking Study (CTS) of physicians from 2004-2005 to gather information on physician income. They grouped the physician responses into 4 broad categories (surgical, internal medicine and pediatric subspecialties [IMPSS], primary care, and other) and again into 41 specific specialties. They went beyond previous studies to calculate gross personal income on an hourly basis (thus controlling for hours worked per week) and did further adjustments to control for other variables, principally sex and age. They used a statistical manipulation to estimate incomes above the maximum set for the CTS (for some reason set at $400,000, much lower than many subspecialists make).

The outcomes were not surprising in comparison to previously reported data. In the 4 broad-group comparisons, primary care physicians averaged about $60/hr compared to IMPSS at $85, other medical at $88, and surgical at $92. In the single specialty comparisons, General Surgery was taken as a reference being actually near the middle ($86/hr), with the top incomes in neurosurgery ($132), radiation oncology ($126), and medical oncology ($114). At the bottom were family practice, general practice, general internal medicine, geriatric medicine, internal medicine/pediatrics, and “other” pediatric subspecialties (whichever those may have been) with a range of $50-$58.

There are several reasons to think that differences are, in fact, greater than those reported. There was only a 53% response rate to the CTS, and so we do not know if non-respondents made more, less or the same as respondents. “Hospital-based” specialties, specifically anesthesiology and radiology, which are among the highest-paid, were excluded. Other high-end specialties, such as cardiovascular surgery or transplant surgery, do not appear as specific specialties, and may have their incomes hidden when grouped with “thoracic surgery” or “other surgical specialties”. There are many sources of income for many physicians, including a variety of expenses that can be paid by practices and which would presumably be greater for higher income practices. Many highly-paid specialties are paid by hospitals directly (such as anesthesiology and radiology) or through “physician service agreements”. The correction used by the authors of the study for incomes over $400,000 could have been inadequate; certainly anecdotal experience in many locations would suggest that considering $400,000 as a reasonable top end for the highest paid physicians would understate that by at least half.
Nonetheless, the income differences, even in 2004-05, were impressive. Given the debt load that medical students (particularly those, obviously, from the less wealthy families) graduate with, the significant attraction to higher pay is clear.

The Wall St Journal, in two recent articles (“Secrets of the system”) published October 26, 2010, looked at the Relative Value Update Committee (RUC), a group of 29 physicians convened by the AMA from different specialty organizations that make recommendations to Medicare on how to pay physicians for their, well, relative value. One, “Physician panel prescribes the fees paid by Medicare” by Anna Wilde Matthews and Tom McGinty, describes how this group meets to divide up a pie that Medicare seeks to keep constant. In the other, “Dividing the Medicare pie pits doctor against doctor”, Matthews discusses the contentiousness that happened when primary care physicians (greatly outnumbered) challenged their surgical colleagues to get a higher portion of the money (that is, to revalue activities done by primary care physicians relative to surgical specialists).

In the same issue of Archives of Internal Medicine that Leigh’s article appeared in, Federman and colleagues[3] surveyed physicians about whether they thought reimbursements were inequitable or not; 78.4% agreed that they are, with not that much difference between generalists and subspecialists. However, when the idea of shifting payments from subspecialists to generalists was raised, there was a marked difference; 66.5% of generalists supported this, while only 16.6% of surgeons did; overall 41.6% were supportive and 46.4% were opposed. That is, for most specialists, paying generalists more is ok, but paying themselves less is not.

The WSJ‘s Matthews quotes an email from Jonathan Blum, deputy administrator for the Centers for Medicare and Medicaid Services (CMS) saying that the Medicare agency is moving to “improve Medicare's physician systems to correct historical biases against primary-care professionals." That needs to happen. The changes need to be dramatic. And they need to happen soon.

[1] Shi L, Macinko J, Starfield B, Xu J, Regan J, Politzer R and Wulu J, “Primary care, infant mortality, and low birthweight in the states of the USA”,J Epidemiol Community Health 2004;58;374-380
[2] Leigh JP, Tancredi D, Jerant A, Kravitz RL, “Physican wages across specialties: informing the physician reimbursement debate, Arch Int Med 25Oct2010; 170(19):1728-34.
[3] Federman AD, Woodward M, Keyhani S, “Physicians’ opinions about reforming reimbursement: results of a national survey”, Arch Int Med, 25Oct2010;170(19):1735-42.
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VISA and colchicine: maybe the banks and Pharma really ARE in it for the money!

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This is a guest posting by R. Stephen Griffith, MD, Chair of the Department of Family and Community Medicine at the University of Missouri-Kansas City.

A recent article explains in some detail one of the devious ways the banking industry, and the recently spun-off companies of VISA and MasterCard, make the money it takes to support the executive salaries and bonuses. (“How Visa, Using Card Fees, Dominates a Market”, Andrew Martin, NY Times, Jan 4, 2010)

Each time one of us swipes a debit card at a retail outlet, the retail outlet pays a banking institution a fee. That seems like an honest way to make a living, but the plot thickens. If we punch in the secret code associated with the card, the bank gets a few cents. If instead of using the code we sign the receipt the bank gets a bigger fee. Apparently there is no more expense associated with the latter method, but the fees negotiated by VISA et. al with the retailers provides for the higher fees. The individual banks then receive the fees, which encourages them to “push” more of the VISA’s (or which ever company is offering them the best deal). The credit card companies expand their reach, the banks make more money, and everyone involved in the deal is happy. In fact, the higher the cost per transaction the credit card company can negotiate makes more money for the bank, and so a bidding war develops in which the higher the fee, the more the banks gravitate to that company. The fee can be up to 75 cents per transactions—many multiples of the fee for a swipe and use of the code. This is transparent to the consumer, who willingly signs or puts in his/her code as requested by the retail outlet. Of course, the unwitting consumer eventually pays the extra expense (passed on from the retailer as part of the cost of doing business). Just another way for the banks to make a living.

There are those of us who would suggest that this is “gouging” the customer and there should be some repercussion to the perpetrators. I was among the inflamed and insulted when I read the article. But then this horrible thought crossed my mind: as a well meaning and cost conscious family physician, how many times have I committed the same offense?

The relationship between physicians and Pharma has been a topic of discussion since I was in medical school, although until relatively recently I have seen very little response from the medical community. The representatives of Pharma host our meetings and visit our offices, give us food, pens, pads, tickets to games, sometimes even trips to nice places. Associated with the gifts is also free “education” about why the product about which they are educating the physician is better than generic or “me, too” drugs made by another company. The docs are given samples which they can provide their patients to try the new drug out and “help save money for the patients.” Of course, if the medication works, a prescription for the drug will be given. The extra expense (sometimes an extraordinary amount of extra expense!) of the newer drug is borne by the patient or the patient’s insurance after a co-pay (which results in higher premiums the patient pays.)

So the medical community’s “scam” is we get lots of benefits and the expense of those benefits is borne by someone else—our patients.

To be fair, not all physicians accept gifts from Pharma. And in the last few years or so, the value of the gifts has been more restrained. And a growing number of physicians are refusing to even meet with representatives from Pharma, refusing the samples and the false economy of providing them, refusing the gifts and “education”. Creating distance from Pharma is a good thing—they are as fun to hate as the banking industry. And if you doubt the amount of greed in Pharma, please read this: “An Old Gout Drug Gets New Life and a New Price, Riling Patients”, Jonathan D. Rockoff, Wall St. Journal (and below, as it may not be completely available on the WSJ site.)

The article is about colchicine, a drug for the treatment of acute gout (and a few other things) that has been around for more than a century—long before the advent of the FDA. The FDA has encouraged pharmaceutical companies to study some of the older drugs for true effectiveness, and the company can then apply for a three year patent on the medication. URL Pharma, Inc. did the clinical trials on less than 1,000 patients, and proved that a drug everyone already knew worked, worked. Amazing! They received a three year patent, and now a pill that was $4 per month long before the $4 per month plans existed, is $5 per pill! Since it is usually given twice a day, the drug will now cost patients $10 per day when it formerly cost about a quarter.

Stories like this and the one about banks makes it easy to feel distaste for the banking industry and Pharma. Where is the justice in banking executives making millions and then being bailed out by taxpayers? Where is the justice of Pharma making huge (I would argue inappropriately huge) profits from the ills of our patients? I just wish the profession of medicine (and I) hadn’t played a part.


(From the Wall St. Journal),
An Old Gout Drug Gets New Life and a New Price, Riling Patients
By JONATHAN D. ROCKOFF
A centuries-old drug used to treat excruciating gout pain had cost just pennies a tablet—until last year. Now, the retail price has skyrocketed to more than $5 and some of the manufacturers have ceased production amid a battle over marketing rights.
The tale of how this common gout drug, colchicine, became the costlier branded drug Colcrys offers a window into the Byzantine world of drug pricing. The price rise is a consequence of a Food and Drug Administration effort to improve the safety of long-used but unapproved drugs, with a trade-off often made between drug affordability and safety.
In July 2009, a Philadelphia drug maker received FDA approval to exclusively market colchicine for gout attacks for three years. The company, URL Pharma Inc., was taking advantage of a push to bring medicines predating the FDA, like colchicine, under the agency's regulatory umbrella. The FDA offers exclusive marketing rights if a drug maker conducts clinical trials.
URL Pharma had commissioned studies that confirmed its colchicine product's safety and efficacy, while demonstrating it should be taken at a lower dose than typical and not used with certain other medicines. The company is marketing its drug as Colcrys—and the retail cost averages $5 per pill, according to DestinationRx, a health-care data provider.
URL is also suing longtime manufacturers of unapproved colchicine, saying the companies are now illegally marketing their products. Some of the companies are fighting the lawsuits. Some themselves have raised prices—including one increase of just under a dollar per tablet to $1.17, according to DestinationRx. The higher price for Colcrys was first reported by Kaiser Health News.
There were 3.5 million prescriptions and $6.4 million in sales in 2008, according to the most recent data available from IMS Health, a drug-data firm.
"It's not a new product. It's been out for hundreds of years. To all of a sudden have to pay $125 or $150 a month, after it only cost $5 or $10 a month, is a real problem," said Stanley Cohen, a Dallas doctor who is the president of the American College of Rheumatology. He met with the FDA to express concern about the price increase.
The chief executive of URL Pharma, Richard Roberts, said that it priced Colcrys in line with other approved, branded drugs used to treat gout pain. To help patients afford Colcrys, Dr. Roberts said, the company is offering to pay a portion of co-pays, and it is providing a three-months' supply to low-income patients for $15.
Eileen Wood, vice president of pharmacy and health-quality programs at CDPHP, an insurer in New York state, said insurers will have to absorb much of the added expense. URL's contribution was "not any new therapeutic tool, not new science; they just added cost," she said.
Nancy Sparks Morrison, a retired schoolteacher who suffers from familial Mediterranean fever, an inflammatory disorder that's treated with colchicine, said she is buying colchicine from Canada because she can't afford Colcrys. Ms. Morrison said she plans to get help from URL Pharma to pay for Colcrys because the company has just expanded its assistance program. "I'm retired on Social Security, and I have a small pension," said Ms. Morrison, 71 years old, who lives outside Charleston, W.Va.
The price increase is an unintended consequence of the FDA's nearly four-year-old initiative to regulate unapproved drugs. These medicines were sold before the FDA was established, and therefore weren't required to undergo approval. After decades of use, the medicines are considered safe by doctors, but haven't been proven to satisfy the agency's standards. Colchicine's use has been traced back to the sixth century, according to the FDA.
Seventy drugs that were grandfathered have been approved since the FDA began its initiative, most notably pain reliever Vicodin, from Amneal Pharmaceuticals LLC, the FDA said.
The FDA had hoped a significant price increase wouldn't follow Colcrys's approval and regrets the increase, said Janet Woodcock, director of the agency's Center for Drug Evaluation and Research. Dr. Woodcock encouraged more competition, saying another company could seek approval for colchicine's regular use in gout, rather than the acute use that URL Pharma received approval for.
There had been no standard for dosage before FDA approval. Colchicine's excessive use can cause side-effects, such as severe diarrhea that is potentially fatal. The FDA said it receives reports of five deaths a year, on average, involving patients who took colchicine tablets.
"We took bad guidance, even guesswork, and made this evidence-based medicine," Dr. Roberts said.
Closely held URL Pharma, which is owned by a hedge fund, a private investor and employees, is a longtime seller of generic drugs, including colchicine. When the FDA launched its push, the company began searching for those with safety risks whose patients could benefit from clinical testing, Dr. Roberts said.
URL Pharma said its 17 clinical trials of colchicine involved a total of 988 patients. The trials showed that gout patients need take two tablets after an attack and one more an hour later, the FDA said. Trials also demonstrated side-effects from use with certain other medicines, including some antibiotics and antihypertensive medicines. Those are now flagged on the label of Colcrys.
After obtaining FDA approval of Colcrys, URL Pharma went to federal court to sue manufacturers of colchicine, including Excellium Pharmaceutical Inc., Vision Pharma LLC, Watson Pharmaceuticals Inc. and West-Ward Pharmaceutical Corp., saying they have been illegally marketing their colchicine products since Colcrys's approval. A fifth company, Qualitest Pharmaceuticals, settled and stopped production. The four companies are fighting the lawsuits.
"You have this product out for at least a hundred years and all of a sudden it's no good?" said Lou Dretchen, who oversees sales and marketing at Excellium of Fairfield, N.J. Mr. Dretchen said the small, closely held generic drug maker stopped colchicine production after URL Pharma sued. The other companies declined to comment.
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