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April 2003
Volume 67
Number 4


Between Mergers and Market Forces: Keeping Research Alive

Joanne M. Conroy, M.D., Vice-Chair
FAER Board of Directors



This article was excerpted from a speech presented by Joanne M. Conroy, M.D., at the ASA Annual Meeting FAER luncheon on October 12, 2002, in Orlando, Florida.

This is an interesting time for both anesthesia and industry research. I now have the distinct pleasure of living in New Jersey, the Garden State, one of the most fertile areas in the country for medical research. When it comes to private spending and research, New Jersey attracts more than $10 billion per year, the most for any state on a per-capita basis and among the top five in total dollars. Of that investment, more than half flows into medical research. Most of this comes from giant American and European drug manufacturers with operations in New Jersey.

The business of medicine is a way of life in northern New Jersey. The Wall Street Journal is the local paper. We even have a section in the Newark paper dedicated to pharmaceutical company news. The consequence of their investment is that when Merck burps, all of Wall Street seems to shudder. When Guidant loses its court appeal or Wyeth answers questions about Prempro, it makes the front page. Accordingly, the last two to three years have been turbulent ones for everyone. Merger after merger, with the inevitable restructuring, has affected and preoccupied both industry and health care. Greater restrictions and external scrutiny by government and consumers have forced us unwillingly into the public eye.

Like medicine, pharmaceutical companies are now being regulated as never before. In some ways, the industry’s position is even worse than it was two years ago, partly because HMOs have managed to get out of the political cross hairs.

Consider the following exchange that took place during last month’s senatorial debate in South Dakota. Both candidates spit out the words “drug money,” referring to legitimate and legal political contributions from pharmaceutical companies, as if they were talking about money from the Cali cocaine cartel. It is a fascinating dichotomy. If you talk to the American people about the importance of medical advances and pharmaceuticals and the difference it makes in their lives, everyone can tell you a story. Then you turn around and talk about the business of medicine and they become negative and distrustful. It is as though the industry is totally divorced from its scientific contributions.

The contradiction is that the corporate investment in scientific research is greater than ever. There are more than 800 medications currently under development for geriatric diseases, including Alzheimer’s and osteoarthritis, and more than 200 for children’s conditions. These drugs are being developed only because pharmaceutical companies can acquire patents and then sell their drugs at a profit. Typically, only one out of 5,000 to 10,000 compounds ends up as a marketable drug, and only 30 percent of these make money.

Unfortunately, almost no politician in the United States is willing to stand up and utter the simple truth: that the nation’s medical providers, medical technology and pharmaceutical companies have done more to extend the lives of ordinary U.S. citizens than any other industry in history.

Anesthesia and industry are facing increased demands for clinical anesthesia care and pressure to meet growing medical needs of the population at a lower cost. Anesthesia providers and health-related industries are being forced into roles that meet short-term needs of patients regardless of long-term impact.

And there is a long-term impact.

My perspective on this paradox was shaped by a book written by Juan Enriquez, M.D., titled As the Future Catches You – How Genomics and Other Forces are Changing Your Life, Work, Health and Wealth. Dr. Enriquez is Director of the Life Sciences Project at the Harvard Business School where he is building an interdisciplinary center focusing on how business will change as a result of the life sciences revolution.

The book is made up of a number of succinct observations of the global economy accompanied by data elements and dialogue discussing the importance of creating a culture that generates new knowledge. He challenges us to consider what is about to happen in medicine.

We currently spend nine times as much for doctors and medical interventions as we spend on medicines and prevention. In the future, we may end up spending just as much on pharmaceuticals as we do on doctors.

Medicines do not have to be pills or injections; they can be part of the food we eat every day or our soap and cosmetics.

Dr. Enriquez observes that Proctor & Gamble is considering a merger with a pharmaceutical company, L’Oreal is hiring molecular biologists, and Campbell’s is selling soups specially designed for hospital patients. The lines are already blurring between industries.

Dr. Enriquez believes that the dominant language and economic driver of this century is going to be genomics. Those who remain illiterate in this language will not understand the force making the single biggest difference in our lives. And yet many countries and companies just do not get it. They continue to invest primarily in producing stuff they can see and touch, even though two-thirds of the global economy is already a knowledge economy.

Science and technology allow people to multiply their productivity much faster than those who do not have the same knowledge or instruments. Some countries and companies are choosing not to invest in or attract smart people who are science-literate, and they do not become particularly concerned as many of their brightest leave. (This sounds strangely familiar.)

Those who generate knowledge are the ones whose wealth is increasing. As a product becomes standardized and is mass-produced, be it a seed, a machine or a computer program, the knowledge component becomes more and more important and the manual labor less valuable.

What our world will look like in 50 to 100 years depends to a significant extent on our ability to adopt and adapt to the ethical, political and economic challenges of the digital genomic era.

In his book, Dr. Enriquez drives home the point (in an entertaining but compelling manner) that it is no longer sufficient to just produce goods and services — we must produce knowledge. We can apply his premise to today’s challenges both in anesthesiology and industry. Our real value is in the production of new knowledge and technology, in the generation of new compounds in the research and development pipeline or the investigation into the mechanisms of anesthetic cellular and molecular action.

Yet external forces — the market, government and consumers — are pushing both of us to become simple purveyors of “goods and services,” to focus on expanded clinical service hours or to take dollars earmarked for research and instead subsidize lower medication prices. Consequently we are in great danger of neglecting that aspect of our profession which makes us thought-leaders.

FAER leadership has struggled with this dilemma. We know that the increasing demands for clinical productivity, coupled with decreasing reimbursement for clinical anesthesia services, has limited anesthesia research. This increasing pressure for clinical service coupled with a reduction of clinical cross subsidies to encourage scientific development bodes ill for the continued growth if not survival of anesthesiology as a specialty of medicine. However, we cannot ignore our commitment to research, education and mentoring of hundreds of young scientists.

I see more clearly now the importance of research and its contribution to both our educational endeavors and, more importantly, the quality of our clinical care. I can see the clinical impact of advances in health care on the health of my communities. I believe that more and more patients will select their physicians, hospitals and systems based on quality, and they believe that they will get the best and most knowledgeable care available within those quality institutions. This emphasis on quality is accomplished by the creation of an energetic environment of intellectual curiosity, whether in a university or a community setting.

Public investment in research results from an understanding that ideas pondered in laboratories will grow from ideas to commercial products that make a difference.
It is easy to believe that drugs and health care technology cost too much, at least it is if you are not a member of my community who has just died of colon cancer or my friend who endured experimental chemotherapy to fight lymphoma. For them, drugs do not cost nearly enough since the higher cost would bring forth more and better means of fighting cancer and other diseases.

It is the challenge for and responsibility of everyone in this room to make sure we keep this dream alive, and our goals are more similar than you would think. “To promote the generation of new knowledge in anesthesiology and medical research that advances patient care and to foster career development of those dedicated to research and education.” That is the FAER mission. Believe it, live it, support it.



   
Joanne M. Conroy, M.D., is Chief Medical Officer and Vice-President of Academic Affairs, Western Region Atlantic Health System, Morristown Memorial Hospital, Morristown, New Jersey.
Joanne M. Conroy, M.D.

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