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InnovativeMedicinesSouthAfrica IMSA ValueofInnovativeMedicine ValueofInnovativeMedicine DefinitionofValue Valueistheamount asofgoods services ormoney consideredtobeafairequivalentofsomethingelse afairpriceorreturn TheAmericanHeritage DictionaryoftheEnglishLanguage FourthEditionCopyright 2000byHoughtonMifflinCompany PublishedbyHoughtonMifflinCompany Allrightsreserved WhatistheValueofInnovativeMedicine Innovativemedicinesshouldprovideastateofphysical mentalandsocialwell being ValueofInnovativeMedicines HasadifferentmeaningdependingontheAudience PatientsMayCareAboutIncreasedLongevityIncreasedQualityofLifePayers EmployersMayCareAboutPotentialforDirectOffsettoOtherHealthCareCostsIncreasedWorkplaceProductivity ValueofMedicines ThePatientPerspective InnovativePharmaceuticalsReduceMortalityandMorbidity Pharmaceuticals drugsandvaccines haveeliminatedorbroughtundercontrolmanydiseasesandconditionsthatoncehadhighmortalityrates e g influenza polio pneumonia anddiptheria Pharmaceuticalshavealsohelpeddramaticallyreducemortalityratesforotherdiseasesandconditions e g AIDS asthma heartattacks strokes andulcers 80 EarlyInfancyDiseases DropinDeathRateforDiseasesTreatedwithPharmaceuticals 1965 1995 RheumaticFeverandRheumaticHeartDisease Athero sclerosis HypertensiveHeartDisease UlcerofStomachandDuodenum IschemicHeartDisease Emphysema Hypertension 75 68 67 61 41 31 22 PercentDropinDeathRate NewMedicinesHaveProlongedLife Source PhRMA BasedonBostonConsultingGroup 1993 andUSNationalCenterforHealthStatistics 1998 StudyFindsDirectCorrelationBetweenReductionsinMortalityandNumberofNewDrugsforDisease Over45percentofthevariationinmortalityacrossdiseasesbetween1970and1991isexplainedbytheextenttowhichnewdrugsareusedtotreatthedisease makingnewdrugsthemostimportantfactorinexplainingmortalityreductions Eachofthe436newdrugsintroducedbetween1970and1991annuallyadds11 200aggregateyearsoflifetotheU S population Source Lichtenberg Frank PharmaceuticalInnovation MoralityReduction andEconomicGrowth PresentedattheConferenceontheEconomicValueofMedicalResearch December1999 PharmaceuticalAdvancesPredictedtoContinuetoReduceMortalityRatesinFuture FourstudiesbytheBattelleInstitutepredictdiseasepatternsin2015intheU S Germany FranceandtheUnitedKingdom Thesestudiessuggestpharmaceuticalinnovationwillcontinuetobeamajorfactorinreducingmortality accountingfor 19to40percentoftheprojectedreductionincoronaryheartdisease 15to40percentofthereductionincerebrovasculardisease 28to65percentofthereductioninbreastcancer and3to26percentofthereductioninlungcancer Source Hall M TheImpactofBehavioralandBiomedicalAdvanceonHealthTrendsOvertheNext25Years London UK OfficeofHealthEconomics OfficeofHealthEconomicsBriefing No 31 November1994 InnovativeHealthCareisSavingLives In1950 cardiovasculardiseaseclaimedfourlivesoutofevery1 000annually todaythatnumberhasfalleninhalf ThesinglemostimportantfactorinincreasingthelifespanoftheaverageAmericanbetween1950andtodayisthereductionincardiovasculardiseasedeath Source Health UnitedStates2001 CentersforDiseaseControlandPrevention U S DepartmentofHealthandHumanServices August2001 DatabasedonNationalVitalStatisticsSystem PrescriptionDrugsSaveLivesandMoney Source Costs Bozetteetal NewEnglandJournalofMedicineVol 344 No 11 March15 2001 Mortality CentersforDiseaseControl dataondrugdevelopmentfromPhRMAandtheNIHOfficeofTechnologytransfer 122drugstotreatAIDS CentenariansinUSPopulation NumberPerMillion 300 250 200 150 100 50 0 1900 1920 1940 1960 1980 2000 2000 262 1900 46 Source Caplow Theodore etal TheFirstMeasuredCentury WashDC AEI 2001 9 CholesterolFightingDrugsReduceRiskofHeartAttackorStroke Cholesterol loweringdrugs knownasstatins safelyreducedtheriskofaheartattackorstrokebyone thirdintheworld slargeststudyofpeopleathighriskfortheseconditions About25millionpeopleworldwidetakestatinstoday Thenewfindingssuggestthatabout200millionpeopleworldwidewouldbenefitfromthedrugs Accordingtothestudy sleadinvestigator if10millionhigh riskpatientsstartedtakingstatins 50 000deathswouldbepreventedeachyear Source LawrenceK Altman CholesterolFightersLowerHeartAttackRisk StudyFinds TheNewYorkTimes November14 2001 NewDrugsImprovingQualityofLife Pharmaceuticalshelppatientsimprovetheirqualityoflifeinnumerousways Reducinghospitalizations includingemergencyroomvisitsAvoidingsurgeryHelpingpatientsremainmoreactiveandindependent NewMedicinesareReducingSideEffects Newmedicineshavebeenfoundtoreducesideeffects oftenleadingtoimprovedcomplianceandbetterhealthoutcomes Forexample gastrointestinalsideeffectsfromconventionalnonsteroidalanti inflammatorydrugs NSAIDs areestimatedtoberesponsiblefor107 000hospitalizationsand16 500deathsannuallyintheU S Source AdverseUpperGastrointestinalEffectsofRofecoxibComparedwithNSAIDs TheJournaloftheAmericanMedicalAssociation Vol 282 No 20 November24 1999 Approximately20 to30 ofpatientswhotakeconventionalNSAIDsdeveloppersistentsideeffects andmorethan10 areestimatedtodiscontinuetreatmentasaresult Source Anti InflammatoryandUpperGastrointestinalEffectsofCelecoxibinRheumatoidArthritis TheJournaloftheAmericanMedicalAssociation Vol 282 No 20 November24 1999 AnewfamilyofNSAIDsknownasCox 2inhibitorshavebeenproventocauselessstomachirritationandcarryalowerriskofcomplicationsthanconventionalNSAIDs ValueofMedicines TheEmployer PayerPerspective GreaterUseofPharmaceuticalsisLeadingtoDeclinesinHospitalAdmissions Lengths of Stay andSurgicalProcedures Hospitaladmissions length of stay andsurgicalproceduresdeclinedmostrapidlyforthosediagnoseswiththegreatestincreaseinthetotalnumberofdrugsprescribedandthegreatestchangeinthedistributionofdrugs Theestimatesimplythatanincreaseof100prescriptionsisassociatedwith16 3fewerhospitalstays Source FrankR Lichtenberg Do MoreandBetter DrugsKeepPeopleOutofHospitals TheAmericanEconomicReview PapersandProceedingsoftheHundredthandEighthAnnualMeetingoftheAmericanEconomicAssociation May1996 PrescriptionMedicinesMayHelpAvertAsthma RelatedHospitalizationandEmergencyRoomVisits Treatmentofallergicrhinitismaykeeppatientsoutofthehospitalandawayfromemergencyroomsaccordingtoarecentstudy Thestudy usingclaimsdatafrom4 944privately insuredpatientsdiagnosedwithbothallergicrhinitisandasthma foundthatpatientstreatedwithnasalinhaledsteroids sedatingantihistamines and ornon sedatingantihistamineswereabouthalfaslikelytohaveanasthma relatedevent hospitalizationoremergencyroomvisit thanthosenottreated Source JodiCrystal Peters etal TreatingAllergicRhinitisinPatientswithComorbidAsthma TheRiskofAsthma RelatedHospitalizationsandEmergencyDepartmentVisits JAllergyClinImmunology109 January2002 1 57 62 DiseaseManagement FreeAccesstoDiabetesMedicinesLowersEmployeeMedicalCosts TotalMedicalCostsforEmployeesDiagnosedwithDiabetes CityofAsheville NC USA 1996 2001 Source JohnMiall CityofAsheville NewDrugsParticularlyCostEffectiveRelativetotheProductsTheyReplace IllustrationofEstimatedSavingsfromUseofNewerMedications assumesaverage age ofdrugdecreasesbyabout10years Source ProfessorFrankLichtenberg BenefitsandCostsofNewerDrugs AnUpdate NBERWorkingPaper8996 June2002 DrugCostIncrease InpatientSavings OfficeVisitSavings HomeHealthSavings OutpatientSavings ERSavings NetImpact 18InvestmentReturns 129inSavings Ratioof 7SavedforEvery 1Invested NewDrugsIncreasingWorkerProductivity Foremployers thevalueofpharmaceuticalsisreflectedinincreasedworkerproductivity reducedabsenteeism andoverallimprovementsinworkforcehealth ResearchersatMITstudiedpre andpost treatmentworkrecordsforemployeeswithfourconditionstodeterminethenumberofhoursworkedinatwo weekperiod Employeesreceivingtreatmentwithpharmaceuticalswereabletosignificantlyincreasethenumberofhoursworked MedicinesProvideROItoEmployersThroughImprovedWorkforceProductivity Source NationalCommitteeforQualityAssurance QualityDividendCalculator 2001 Source Berndt etal IllnessandProductivity ObjectiveWorkplaceEvidence WorkingPaper 42 97 MassachusettsInstituteofTechnology MIT May1997 AreAdvancesinMedicineWorththeCost ChangeinTreatmentCost IncreaseinValue Source Cutler McClellan HealthAffairs Sept Oct2001 DrugsareoneComponentofaComprehensiveapproachtotheCostofTreatingDisease DirectCostsDrugsProviderHospitalNursingHomeOther IndirectCostsDecreasedProductivityAbsenteeismCaregiverIssues Areallthesecostfactorstakenintoconsiderationwhentreatmentisdecidedonforthepatient NewDrugDevelopment NewProductDevelopment ARiskyandExpensiveProposition Source TuftsCenterfortheStudyofDrugDevelopment 5 000 10 000Screened 250EnterPreclinicalTesting 5EnterClinicalTesting 1ApprovedbytheFDA CompoundSuccessRatesbyStage NetCost 802millioninvestedover15years TheCostofDrugDevelopmentContinuestoIncrease Sources R Hansen Ph D UniversityofRochester S N Wiggins Ph D TexasAOfficeofTechnologyAssessment 1993 AverageCapitalizedDevelopmentCostperNCE 1976 2001 NominalDollars Millions ShrinkingTimeWithoutCompetition So Called Me Too DrugsCreateaHighlyCompetitiveMarketplace 1965 1975 1985 1995 YearofTherapeuticClassLaunch Source FDAOrangeBook PrivateIndustry InventstheVastMajorityofNewMedicines Source DiMasi Hansen andGrabowski TuftsCSDDRDataonAIDSdrugdevelopmentfromPhRMAandtheNIHOfficeofTechnologytransfer WhereDidAllNewDrugsApprovedfrom1990 1999ComeFrom WhereDidAIDSDrugsComeFrom InvestmentsinNewDrugDevelopment Publicsectorcannotaffordthehugeinvestmentsneededfornewproductdevelopment TheworldstillneedsnewdrugsfortreatmentofailmentssuchasHIV AIDS Cancer TBandMalaria Theincentivetoinvestinnewproductdevelopmentshouldbemaintainedandnurtured MajorDegenerativeDiseases Source Caplow Theodore etal TheFirstMeasuredCentury WashDC ADI 2001 137 NumberofDeathsPer100 000PopulationPerYear 600 0 1900 400 1920 1940 1960 1980 2000 200 MajorCardiovascularDiseases HeartDisease Stroke

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