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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: BigKNY3 who wrote (7284)	3/23/1999 10:41:00 PM
From: BigKNY3	Read Replies (3) \| Respond to of 9523

Better drugs or lower bills? You can have only one Mark Gerson 03/22/99 USA Today FINAL Page 23A What is pain? A quick reply by most people would explain pain as the body's response to an unnatural and discrete event: an extreme of heat or cold, an accident, an attack or an illness. However, for many Americans, pain is an everyday occurrence, what the medical community calls a chronic illness. This kind of chronic pain can come from a number of causes; perhaps the most common is arthritis. Whatever its source, it is both debilitating and costly in every sense of the word. The cover story of the March 1 issue of BusinessWeek reports that pain annually causes 515 million lost workdays, prompts 40 million physician visits and costs $100 billion. The reason BusinessWeek and The Wall Street Journal recently have carried prominent stories on pain is that there finally has been a breakthrough in its treatment. Until now, nonsteroidal anti-inflammatory drugs (NSAIDS) were the leading modality to treat pain -- but there were complications. NSAIDs such as aspirin and ibuprofen alleviate pain by inhibiting production of the enzyme cyclooxygenase, or Cox. Inhibiting Cox reduces the production of prostaglandins, which in turn can reduce pain and inflammation in joints. The problem is that prostaglandins also protect the lining of the stomach. The very drugs that relieve the crushing pain of arthritis cause ulcers and similar stomach problems. These problems can be very severe: Every year, 107,000 people are hospitalized and 16,500 die from the stomach-related side effects of NSAIDs. For 20 years, medical researchers have tried to find an alternative to this vicious dilemma. Finally, it is here. Scientists have discovered that there are really two Cox enzymes: Cox I and Cox II. The inhibition of Cox I causes the aforementioned ulcers; the inhibition of Cox II alleviates pain. Searle's recently approved Celebrex and Merck's soon-to-be-approved Vioxx both inhibit only Cox II. Celebrex 's early sales has surpassed those of Viagra -- a success that other pharmaceutical companies hope to share with their coming entries in the Cox II market. There is no way to know now which drug will dominate the class. However, we know that Cox II will be a multibillion-dollar category that will alleviate the pain of countless people who were previously consumed by suffering. The experience of Cox II drugs should be noticed carefully by health care policymakers and analysts. On average, Celebrex costs the patient $2.42 a day. Generic ibuprofen, on the other hand, costs 10 cents a day. Managed care companies will seek to have Celebrex prescribed only for patients whose stomachs cannot tolerate the far cheaper NSAIDs. But payers have never been able to do much to influence physician prescribing, and there is no reason to think that Cox II drugs will, in the long term, be an exception. Even if payers succeed in this effort, the cost of treating hundreds of thousands of chronic pain sufferers will have increased by almost 2500%. That extraordinary number is actually common for a medical innovation. Medical innovations almost never simply replace previous treatments in an even trade. As in the case of Cox II inhibitors, they often replace far less effective and cheaper generic treatments. And, as in the case of Viagra, they often create enormous new demand; before Viagra, men with erectile dysfunction suffered in silence because the existing treatments were so unappealing. Fifty years ago, sufferers from kidney disease simply died; now, dialysis accounts for 15% of U.S. health care spending. Medical innovations replace nothing with something, death with life, pain with no pain. We are now entering a golden era of medical innovation. The human genome project, which will allow pharmaceutical companies to target numerous illnesses that previously ended in death, is almost complete. Pharmaceutical pipelines are bursting, and innovations in medical devices and treatments are proceeding at similar speeds. As we confront this future, it is important to avoid the now-common mistake of lashing out at any player in the health care system. While Celebrex and other breakthrough drugs have very high gross margins (their prices are far greater than their costs), the pharmaceutical industry needs that money to fund the $24 billion the Pharmaceutical Research and Manufacturers of America says it will spend on research and development this year. Health maintenance organizations are roundly reviled, but few are making money. Physicians have seen their independence constrained and their salaries slashed as far as they will go. Hospitals have consolidated and are operating more efficiently than ever before. The issue is fundamental and inevitable: We are both demanding and delivering the best health care that the medical imagination can produce, and the result is expensive. Health care costs will rise, perhaps to 20% of the GNP within 10 years. Efforts at cost cutting can and will be made, and they will help at the margins. But they will ultimately do little because medical innovations, not inefficiencies, are the major drivers of health care inflation. This inescapable truth, though uncomfortable, should remind us of something else: Only a very special people, blessed with a divinely inspired, wealth-creating genius, could ever construct a society where so much has been cured so quickly, at any price.