Medicare expands online health records programs                                                              
                                  By Jeffrey Young                                      
                    Posted: 08/10/08 09:07 AM [ET]                          
                          

The Bush administration is not waiting on Congress to pass legislation that increases access to online personal health records.  

Beginning in January, the administration will expand access to online records in Arizona and Utah as part of an ongoing effort to encourage greater use of health information technology.  

 The records will contain up to two years of information from Medicare's records. Patients will be able to add to their records and share them with physicians, pharmacists and other healthcare providers.

Congress's efforts to pass legislation promoting health IT have been stymied so far but the Bush administration has been moving ahead with its own efforts related to Medicare.  

The administration rolled out a similar program in South Carolina for traditional Medicare enrollees in April. In June 2007, the Centers for Medicare and Medicaid Services (CMS) launched a personal health records pilot project for some beneficiaries enrolled in private Medicare Advantage and Medicare Part D prescription drug plans.  CMS also said in May it is preparing to move ahead with an electronic medical records pilot project in four geographic areas.  

"This exciting pilot will be a major step forward in Medicare. We believe that it will provide information that will empower consumers to manage their health," Health and Human Services Secretary Mike Leavitt said.  

Increasing the use of health IT is a mainstay of health reform plans spanning the political spectrum, including those proposed by the presidential campaigns of Sens. John McCain (R-Ariz.) and Barack Obama (D-Ill.).  

Advocates believe personal health records -- which are controlled by patients -- and electronic medical records -- which are controlled by medical providers – along with other utilities like electronic prescriptions can reduce medical errors, improve efficiency and lower costs in the healthcare system.  

The private sector is also acting on to advance these technologies. An increasing number of health insurance companies are incorporating electronic health records and personal health records into their offerings. The market for providing these records also is growing, with major technology companies such as Microsoft and Google recently debuting health records products.  

Move to Medicare can be painless for GM retirees

BY MEGHANA KESHAVAN and PATRICIA ANSTETT • FREE PRESS BUSINESS WRITERS • July 22, 2008

General Motors retirees facing the loss of their top-flight health coverage should shop around aggressively to save money on Medicare coverage, say Ford retirees who went through the same thing last year.

It's actually possible to save money, despite losing a generous, company-backed health plan and having to pay to supplement Medicare coverage. A big part of the reason is a payment the auto companies are giving retirees in place of their coverage.

"Last year, we were going through the same thing at Ford. Felt like someone stabbed you in the stomach," said Fred Roperti, a salaried Ford retiree. "But it turned out well. I was actually shocked at how reasonable it was."

John Pottow, an associate professor specializing in bankruptcy law at the University of Michigan Law School, said many other retirees could face the same choices in the coming years.

"If you look at teachers, cops, people in the auto sector, many workplaces promise health care benefits into retirement," he said. But employers can't "afford the exorbitant promises they make. ... There's no way that no-paid, zero-percent premiums will survive."

Roperti advises people to get through the initial shock and carefully shop around. He said he has saved more than $600 a year out of pocket in his first year with a Blue Care Network Medicare plan.

Roperti, 76, has served for the past eight years as Salem Township supervisor and draws a pension from his 26 years as an engineer at Ford Motor Co.

"I did a little side-by-side comparison of the plans, and I can't really complain," he said.

Roperti, a widower, takes three medications daily for his heart, following bypass surgery a few years ago. He said his new plan covers his prescriptions, in addition to dental, vision, rehabilitation, chiropractic and medical costs.

In a meticulously organized black binder that characterizes his approach to the problem, Roperti kept a log for the last year of all his health expenses. In 2007, with Ford's insurance, his out-of-pocket expenses were $1,270. This year, he calculates that he will spend $2,408, but he gets $1,800 a year from Ford in place of the paid insurance plan. With that subsidy, he expects to save $662 compared with last year's expenses.

• He uses the Medicare Part B plan, which is now $96.60 per month out of pocket, or $1,157 per year -- a cost previously covered in full by Ford.

• For supplemental medical insurance, in 2007 he paid $31 per month, or $372 yearly. This year, he paid $26.60 per month, or $319 yearly.

• His dental co-pay remains $250 per year. He paid a total of $48 for dental insurance in 2007. Now he pays $36 a month, or $432 yearly.

• He estimates his doctor co-pays this year at $100, the same as the year before.

• With Ford, Roperti spent about $500 on prescription drugs, whereas with his Blue Cross plan, he spends about $150.

Extend Health, a San Francisco company working with GM to help the 97,000 affected retirees find affordable Medicare plans, will not have precise cost comparison numbers for retirees until September. Bryce Williams, Extend Health president and chief executive officer, said the company is "doing some dramatically improved things from last year," when it helped Ford retirees.

The window to enroll has been extended a month, beginning Oct. 15 this year and lasting until Dec. 31. The company is doubling the number of phone representatives and will personalize assistance so that retirees can contact the same person each time they have a question.

Representatives will instruct the children, grandchildren or caregivers of retirees who may not be able to help with the choices.

Medicare specialists at the Michigan Medicare/Medicaid Assistance Program say that seniors can find affordable plans if they do their homework.

Jo Murphy, executive director of the program, which provides free help for people who want to compare and enroll in Medicare plans, said that seniors have nearly 250 Medicare plan choices.

But by the time they factor in key issues -- the prescription drugs they take, whether they want to stay in a network of their current doctors and whether they spend more than one month a year away from their Michigan residences -- the choices may narrow to two or three.

She advises retirees to consider buying a Medicare Supplemental policy along with a Medicare Part D prescription plan, or a Medicare Advantage plan, which offers comprehensive prescription drug and doctor visit coverage, at a cost of about $150 a month for the two plans.

But Lou Isabell, an insurance broker who runs All Choice Insurance, a large Northville agency, warned that Medicare Advantage programs and Part D prescription programs can be costly, so it's important to compare plans, particularly when a person travels extensively. "It's critical that they know what their out-of-pocket expenses will be," said Isabell.

Contact PATRICIA ANSTETT at 313-222-5021 or panstett@freepress.com.

Have scientists discovered a cure for Alzheimer's?

Scientists were amazed when a 20-year-old hay fever drug was found to be highly effective in treating dementia. Jeremy Laurance reports on a startling discovery

Tuesday, 22 July 2008

A hundred years after Alzheimer's disease was discovered, a cure for the degenerative condition that strips sufferers of their memory and personality remains a dream. The main advances have been in drugs to control symptoms such as agitation and restlessness. Restoring memory and cognitive ability has proved much harder.

That is why the publication last week of research showing that an old Russian drug once prescribed for hay fever may be the most effective treatment yet for the devastating condition has captured the attention of scientists and patients' groups.

A single 20mg pill of the drug, called Dimebon, taken three times a day, appears to be twice as effective in improving cognitive performance and preventing deterioration in memory as existing drugs.

The discovery was greeted by charities as perhaps the most exciting development in treatment of the disease. Existing drugs – cholinesterase inhibitors such as Aricept – have limited effects and were introduced over a decade ago.

According to the American researchers who led the trial, Dimebon is the furthest advanced of 65 agents being investigated for Alzheimer's, and holds the most promise.

However, British experts cautioned that the results were from a single trial of the drug, which is not licensed for Alzheimer's, and said further studies were necessary. A second international trial of the drug, which started last month in the USA, Europe and South America, is due to be completed by the end of the year.

Dimebon was used as an antihistamine in Russia 20 years ago, but it was withdrawn from the market when newer drugs superseded it. Investigations by the Russian Academy of Sciences revealed that it had a potential neuroprotective effect and it was bought by a US company, Medivation.

The company asked Professor Rachelle Doody, director of the Alzheimer's and Memory Disorders Center at the Baylor College of Medicine in Houston, to lead the randomised trial run by American and Russian scientists. It involved 183 patients with mild to moderate Alzheimer's in 11 hospitals in Russia.

Doody, who set up the Houston centre in 1987, is one of the world's leading researchers on Alzheimer's. She was the lead investigator in the trials of Aricept, the best-known existing Alzheimer's drug.

The results of the Dimebon trial she led, published last week in The Lancet, show that it improved performance on all five rating scales used to assess Alzheimer's patients, including cognitive performance, behaviour and capacity to carry out ordinary daily activities. Patients taking the drug scored better than they did at the start of the study, while those taking placebo got worse over the initial six-month period of the trial.

In a smaller group of patients who continued with the drug for a further six months, an even greater gap of 6.9 points on the cognitive performance test opened up between those on the drug and those on placebo. This compares with a 2.5- to three-point gain in trials of existing drugs.

Doody said: "I was surprised that all five of the outcome measures were positive and that the benefit [against placebo] widened over time. You don't see that with the other drugs... But this wasn't a comparison study – you can't say that makes Dimebon better than the other drugs."

She added: "I am very happy with the results. They show a clear signal and I am hopeful that the new international study which started last month will replicate them. US regulators have indicated that the trials are potentially acceptable as evidence for approval [for a licence]. There are a couple of dozen agents I am working on, and 65 that I follow, and the good news is that this is the furthest along in Alzheimer's research."

Clive Ballard of the Alzheimer's Society said the findings were "encouraging" and the discovery of a new application for an old drug was "potentially exciting". But it was a single trial of a small size and the results needed confirming, he said.

Caution was also expressed by Professors Alastair Burns of the University of Manchester and Robin Jacoby of the University of Oxford, who wrote in a commentary in The Lancet: "Addition of treatment options is good news for patients and clinicians – it promotes choice and offers the possibility of bespoke treatment packages which maximise the chances of response. [The] trial shows that Dimebon is better than placebo which is no mean feat considering the positive placebo responses in dementia."

But Jacoby said that he retained a "healthy scepticism" about the findings. "They need to be replicated before I will start prescribing it," he said.

If the results are replicated, it will be a boost for a new approach to drug research – taking old drugs and investigating their potential in other areas of medicine. Old drugs can go rapidly into clinical trials for new conditions because they are known to be safe. This speeds up development and cuts the cost.

A cure for Alzheimer's is not imminent, but it's good news that an old drug may be an effective treatment. Everything hangs on the second Dimebon trial now under way.

Alzheimer's: the facts

About 400,000 people suffer from Alzheimer's in the UK and 25 million worldwide.

It is the commonest form of dementia, costing £17bn in the UK for care and treatment.

The condition is caused by the accumulation of protein deposits in the brain, producing the dementia symptoms.

There are three drugs that claim to halt the progress of the disease (but not to reverse it) – Aricept, Reminyl and Exelon.

In 2006, the NHS's use of these drugs was restricted to the moderate stage of the disease by the National Institute for Clinical Excellence because of their limited effect.

There are currently no drugs available on the NHS for the tens of thousands of patients in the UK with mild Alzheimer's.

Walmart  - INDIA's Drug Connection

In 2003, a new kind of "drugstore" appeared across America, promoting cheaper prescription drugs from Canada. Instead of pills, these stores had fax machines and computers that could process orders from senior citizens in the U.S. desperately seeking lower cost drugs.

But federal and state regulators stepped in to interrupt the supply chain. "To some extent, we're caught in the middle of a problem that is not our responsibility, which is drug prices. Our responsibility is safety," a Food and Drug Administration (FDA) official, told USA Today. The FDA issued warning letters to these storefront pharmacies, saying importing Canadian drugs violated federal law. At the time, at least one million Americans were sourcing their medications from Canada. More than $1 billion in product was being imported from Canadian suppliers. The FDA ruled that anyone enabling U.S. citizens to buy drugs from other countries was violating federal law. Storefront owners countered that they were not violating the law, because they were not dispensing drugs -- just helping customers with paperwork.

The pharmaceutical industry was largely seen as driving the FDA to be more aggressive on cross-border imports, because of the potential loss of profits. But the FDA said its concerns about drugs entering the U.S. were all about safety. Seniors were warned that their drugs could be counterfeit, or from countries with weak regulatory standards. "They allege these are Canadian versions of drugs approved in the United States, but we don't know what they are, because there is no regulatory oversight of these drugs," the FDA told USA Today. The importers insisted that the drugs were coming from licensed Canadian pharmacies.

One Oklahoma-based importer, Rx Depot, was shut down by the FDA for violating drug importation laws. A federal judge ordered 85 Rx Depot stores closed in 2004, ruling that only drug manufacturers were allowed to import drugs for sale. The court also ruled that the safety of these imported drugs could not be verified. Rx Depot appealed the court's decision. "We're going to fight like a wild animal," one of Rx Depot's co-founders said---but the stores never reopened. To stop cross-border selling, some drug manufacturers, like GlaxoSmithKline, stopped shipping drugs to Canadian wholesalers who sold to U.S. customers. That led elderly rights groups to call for a boycott of Glaxo.

Beginning January 1, 2006, the entire drug importation issue changed dramatically with the implementation of Medicare Part D by Congress. Talk of Canadian imports all but disappeared from the media. Within 9 months of the creation of Medicare's new drug program, Wal-Mart announced that it would begin selling in the Tampa, Florida trade area, a month's supply from a list of 150 generic drugs for $4 each. One industry analyst told the NewsHour that Wal-Mart's drugs "come from all over the world. They're U.S. manufacturers, Israeli and Indian manufacturers. They have a choice of where to buy these drugs. They are the lower cost drugs in the system today, and that's part of the reason why they're able to price them at this low price point." Wal-Mart was buying drugs directly from manufacturers.

By the end of April of 2007, Planet Retail was reporting that Wal-Mart was "in advanced talks" with the largest Indian pharmaceutical exporting companies -- unknown to most Americans -- like Ranbaxy, Dr. Reddy's Labs, Cipla, Lupin and Sun Pharma. In March of 2003, the Los Angeles Business Journal reported that Cipla and Ranbaxy had 81 applications before the FDA to sell generic drugs in the United States. The companies were taking advantage of India's low labor costs and highly-skilled work force to expand outside their home base. Ranbaxy had challenged the patents on blockbuster drugs such as Pfizer's Lipitor and AstraZeneca's Nexium. A U.S. district court ruled in favor of Pfizer, but Ranbaxy appealed the decision. Even if it ends up losing the challenge, Ranbaxy will be the only generic manufacturer for six months after the patent expires, because under FDA law, the first company to file a challenge on a patent has six-month exclusivity rights, during which time the generic price can be as high as 80% of the original drug. This position could be worth billions to Ranbaxy.

About 14.3% of unapproved medicines entering the US market come from India, according to a group called GS1, a global organization "dedicated to the design and implementation of global standards" to improve the efficiency of supply chains globally. GS1 is described as a joint industry-Government initiative to bring international best practices into India. Wal-Mart began requiring its drug suppliers to use radio frequency identification tags (RFIDs) to help track drug supplies, and check counterfeits.

Historically, according to Bain & Company, Indian companies would copy drugs from other companies and make inexpensive versions, because the Indian government required the indigenous manufacturers to adhere to foreign patents on the manufacturing process, but not on the final drug product. They could alter the manufacturing process and produce generic versions of foreign branded drugs even while they were under patent. But India' laws have been amended to prevent big generic manufacturers like Ranbaxy from making inexpensive copies of foreign drugs patented after 1995.

A drug industry group called Pharmexcil, set up in December of 2004 by India's Ministry of Commerce & Industry, says that Indian drug makers have "tremendous opportunities...in the post 2005 era to manufacture and export many products getting off-patented. Its immense strength [is] in manufacturing quality medicines at affordable prices." According to Pharmexcil, "The generic drug prices in the US market have substantially gone down with Indian generic players quoting low prices...It is good to see that the quality of Indian generic products are accepted in the US."

In 2005, Ranbaxy won Wal-Mart's Supplier Award for outstanding performance. Ranbaxy expects that its U.S. division, largely buoyed by Wal-Mart, will bring in 50% of the corporation's revenues. The Indian drug company's sales in the U.S. increased ten-fold from 1999 to 2003, according to Bain.

From this complex global manufacturing and distribution network, a few basic facts emerge:

· * most Americans have no idea that the drugs they are buying at Wal-Mart are produced in India, made by companies that are copying another company's products.

· * although India has the highest the number of U.S. FDA-approved facilities (84) outside the U.S., no one knows how reliable the quality of Indian drugs really are. The World Health Organization (WHO) has warned that the global counterfeit and substandard drug trade is a $35-billion business, with little risk of prosecution.

· * when consumers buy their drugs at Wal-Mart, the retailer uses that money to buy more products from India, in the same way they buy more clothing or toys from China. Once again, the U.S. takes what other countries make. Wal-Mart's sourcing of drugs from foreign countries exacerbates our unprecedented foreign trade imbalance.

Ironically, the same federal government that hassled senior citizens over importing small quantities of drugs from Canada, now seems content to allow Wal-Mart to import billions of dollars annually worth of Indian drugs to enhance the retailer's bottom line. The Indian drug companies have found a generic drug niche to fill, and they are using their poorly-paid workforce and less than stringent regulatory requirements to satisfy America's growing need for pills. Unlike clothing or toys---there is no label on the pill that says "made in India."

Al Norman is the founder of Sprawl-Busters, and the author of "The Case Against Wal-Mart."

Bill that would allow drugstores to share customer records killed

David Lazarus
Consumer Confidential

June 18, 2008

Last week's column on California legislation that would allow drugstores to share people's prescription-drug records with mass-mailers clearly struck a chord with readers. And I'm glad to say it resonated with lawmakers as well.

The bill -- SB 1096, written by state Sen. Ron Calderon (D-Montebello) -- was approved by the Senate on May 29. But it hit a brick wall Tuesday when it failed to garner a single vote of support in the Assembly Health Committee.

Calderon reserved the right to resubmit his bill in the future. But his chief of staff, Rocky Rushing, subsequently acknowledged that the legislation wouldn't be coming back, at least not in its present form.

"The bill is dead," he said. "It was voted down."

In presenting the legislation Tuesday, Calderon described it as a boon to consumers, especially those with chronic medical conditions. He said it would allow drugstores to send letters to people reminding them to take their medication or refill a prescription.

Calderon said the bill was inspired by his mother, who he said died several years ago from a stroke after failing to take her prescribed meds.

"I take the issue of medical privacy very seriously," he said. "I just want people to take their medications."

If that was his goal, his bill was a consumer-unfriendly way of accomplishing it.

The bill's "source" was a company called Adheris Inc., which used to be known as Elensys Care Services Inc. The company changed its name after it came to light in 1998 that CVS and other pharmacies were sending people's medical info to Elensys without their permission.

Adheris is owned by InVentiv Health Inc., a New Jersey company that says it provides "a comprehensive range of clinical, communications and commercialization services to take pharma products from development through launch to commercial success."

One problem with Calderon's bill was its lack of transparency about who would pay for the reminder letters, and which patients would get them. Calderon originally told me that Adheris is paid by drugstores to handle communications on their behalf.

He acknowledged Tuesday that drug companies "at times" reimburse pharmacies for their expenses.

That's putting it mildly. Adheris Chairman Mike Evanisko testified before the state Senate's Health Committee in March that funding for the company's activities frequently comes from drug makers.

"The pharmaceutical companies sponsor these programs and [on] some occasions they pay us and we reimburse the chains for their expenses," he said. "And in some cases, the pharmaceutical companies who sponsor these pay the chains, and the chains pay us for providing the service."

Evanisko also said Adheris might reimburse drugstores for "printing, postage, maintaining the databases, transferring information to us" -- in other words, everything the drugstores are ostensibly paying Adheris to do.

"This bill is about opening the door to the pharmaceuticals," Assemblywoman Mary Salas (D-Chula Vista) said Tuesday. "The pharmaceuticals want to be able to directly communicate with patients."

Jeff Krinsk, a San Diego attorney who is suing Adheris on behalf of consumers whose prescription information was provided by Albertsons Inc., told me that not only are drug companies paying Adheris and drugstores to fund the letters, they're also choosing which patients receive reminders.

"They only do it for the drugs that are most profitable," he said. "The decision is made by the pharmaceutical companies."

The reason, Krinsk said, is that pharmaceutical companies want to maintain brand awareness among patients taking expensive drugs and deter them from seeking lower-priced generic alternatives.

"The case can be made that there's an educational component to reminder letters that serves the public interest," he said. "But that isn't what's happening here."

A number of lawmakers expressed reservations Tuesday about a provision of Calderon's bill that would have required consumers to opt out if they didn't want letters. Failure to opt out would mean Adheris and other such companies would have full access to your drug records.

"If there were an opt-in policy, it would be different," said Assemblyman Alan Nakanishi (R-Lodi).

Calderon told me last week that asking people to opt in wouldn't work. If given a choice upfront, he said, most people would say no.

Go figure.

Readers were outraged by the proposed legislation. I received dozens of e-mails opposing the bill, and more than 70 similar comments were posted on The Times' website.

"Do I want my prescription drug records shared with mailing firms? Two words -- hell no!" declared Elaine Ramirez. "It is nobody's business but mine and my doctor's what medication I am taking."

Stanton resident Sandra Stubban echoed this sentiment. "I don't need, or want, a reminder from some pharmaceutical company to know when my prescription needs refilling," she said. "It's very simple: When I get down to the last seven pills, it's time to reorder."

Voting against SB 1096 Tuesday were Committee Chairman Mervyn Dymally (D-Compton), Vice Chairman Nakanishi, Patty Berg (D-Eureka), Ted Gaines (R-Roseville), Sally Lieber (D-Mountain View), Fiona Ma (D-San Francisco), Salas and Jim Silva (R-Huntington Beach).

All other members either didn't vote or were absent.

In a statement, Calderon blamed the demise of his bill on "a deceptive campaign of misinformation."

"I've read so many inaccuracies in the press and heard so many conspiracy theories about SB 1096 that if I believed it all, I too would have voted against it," he said.

According to public records, Calderon has received at least $89,000 in contributions from drug companies and pharmacy chains since 2002.

Consumer Confidential runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.

June 19, 2008

Release of Generic Lipitor Is Delayed

By STEPHANIE SAUL

For people with high cholesterol, the wait for a cheaper version of Lipitor has gotten longer. Pfizer announced an agreement Wednesday to head off generic competition for its flagship drug until November 2011.

The drug maker said it settled patent litigation with Ranbaxy Laboratories, an Indian generic drug maker that had threatened to market its own version of Lipitor, the world's best-selling medicine.

The agreement delay Ranbaxy's generic version of Lipitor and is estimated to be worth billions of dollars in additional sales for Pfizer, which could have faced generic competition from Ranbaxy as early as March 2010.

Whenever it comes, a cheaper generic version of Lipitor would sharply cut Pfizer's sales of the drug, which were $12.7 billion last year.

Lipitor is currently priced at up to $3 a day, while a generic version might eventually sell for well below $1.

Pfizer did not disclose the terms of the agreement. But the company said it contained no provisions that would run afoul of the Federal Trade Commission, which has frowned on arrangements in which makers of name-brand drugs pay off generic manufacturers to keep them from entering the market.

The F.T.C. has argued that such arrangements harm the public by inflating drug prices and has challenged them in court, with mixed results.

"We don't have any of the items that the F.T.C. has identified as being of concern such as reverse payments," said David Reid, Pfizer's acting general counsel.

In a conference call with investors and analysts Wednesday morning, Mr. Reid called the agreement "pro-patient, pro-competition and pro-intellectual property."

But Ronny Gal, a generic pharmaceutical analyst for the investment company Sanford C. Bernstein, said the agreement clearly was not envisioned by the Hatch-Waxman Act, the 1984 law that meant to encourage generic drug competition.

"This is clearly a miscarriage of the law," Mr. Gal said, noting that the agreement will mean that consumers continue to pay branded pharmaceutical prices for Lipitor longer than necessary. Yet, Mr. Gal said, the agreement is probably fashioned in such a way that it will avoid F.T.C. opposition.

Under terms of the deal, Pfizer also granted Ranbaxy the right to generic versions of Lipitor in seven countries, beginning at various times. Those countries are Canada, Belgium, the Netherlands, Germany, Sweden, Italy and Australia.

Mr. Reid said the company's agreements involved no payments to Ranbaxy. But the deal also included another incentive for the generic manufacturer. Pfizer dropped its challenge to Ranbaxy's current sales of generic Lipitor in four other countries — Brunei, Malaysia, Peru and Vietnam — allowing those sales to continue. While potentially bad news for consumers in the United States, the deal was good news for Pfizer, who stock was up more than 2 percent Wednesday in early afternoon trading. It has the effect of extending Lipitor's market exclusivity by up to to 20 months. The exact extension is unclear because the date of Lipitor's patent expiration has been a matter of dispute, with one patent expiring in March 2010 and another in June 2011.

The company had argued that Lipitor might be covered by patents extending into 2016, but analysts have said those are minor patents not likely to be upheld.

Either way, Mr. Gal said the extension would be worth billions of dollars to Pfizer, which has traded near decade lows this year. At midday yesterday, shares in the company were at $18.13, up 41 cents.

The company has mounted an aggressive marketing campaign to defend its Lipitor brand against recent competition from simvastatin, a generic version of Zocor, a similar anti-cholesterol drug that lost patent protection in 2006.

Studies have shown that for many patients hoping to control cholesterol levels, simvastatin is a viable substitute for Lipitor, known generically as atorvastatin. A big difference between the two is that Lipitor costs $2.50 to $3 a day, while simvastatin can retail for 75 cents to $1 a day, or as low as 10 cents a day at some discount pharmacies.

As the first company to file with federal regulators to market a generic version of Lipitor, Ranbaxy has rights under the Hatch-Waxman Act to 180 days of generic market exclusivity. During that six-month period, the maker can price generic drugs fairly close to the brand-name version. Prices generally decline sharply when other generic competitors can enter the market.

The settlement agreement does not prevent other generic companies from challenging the Lipitor patent, but Ranbaxy's "first filer" rights in the United States eliminates much of the incentive to do so. Ranbaxy's shares were up more than 2.5 percent early Wednesday afternoon.

Pfizer currently faces a generic Lipitor challenge in Canada from Apotex, a Toronto drug company known for aggressively litigating patent cases.

Mr. Reid said that the settlement involved Lipitor and Ranbaxy patent disputes virtually worldwide with Ranbaxy and that it also covered Caduet, a Pfizer product that combines Lipitor with a blood-pressure medication, Norvasc.

June 19, 2008

Doctors Divided on Use of Electronic Records

By STEVE LOHR

A government-sponsored survey of the use of computerized patient records by physicians points to two seemingly contradictory conclusions, and a health care system at odds with itself.

The report, published online on Wednesday in The New England Journal of Medicine, found that doctors who use electronic health records say overwhelmingly that they have helped improve the quality and timeliness of care. Yet fewer than one in five of the nation's physicians have started using such records.

Bringing patient records into the computer age, experts say, is crucial to improving care, reducing errors and containing costs in the American health care system. The bottleneck to the adoption of the technology is mainly economic. Most doctors in private practice, especially those in small practices, lack the financial incentive to invest in computerized records.

The national survey found that electronic health records were used in less than 9 percent of small offices with one to three physicians, where nearly half of the country's doctors practice medicine.

Dr. Paul Feldan, one of three physicians in a primary care practice in Mt. Laurel, N.J., has looked at investing in electronic health records, and decided against it. The initial cost of upgrading the office's personal computers, purchasing new software and obtaining technical support to shift to computerized patient records would be $15,000 to $20,000 a doctor, he estimated. Then, during the time-consuming conversion from paper to computer records, the practice would be able to see far fewer patients, perhaps doubling the cost.

"Certainly, the idea of electronic records is terrific," Dr. Feldan said. "But if we don't see patients, we don't get paid. The economics of it just seem so daunting."

Private and government insurers and hospitals can save money as a result of less paper handling, lower administration expenses and fewer unnecessary lab tests when they are connected to electronic health records in physicians' offices. Still, it is mainly doctors who bear the burden making the initial investment.

"We have a broken market for electronic health record adoption because the people who gain financially are not the people who pay," observed Dr. Blackford Middleton, a health technology expert at Partners Healthcare, a nonprofit medical group that includes Massachusetts General Hospital in Boston.

To fix the market, Dr. Middleton, like others, recommends that the government play a role in providing incentives or subsidies to accelerate the use of computerized patient records in the United States, whose adoption rate trails behind most developed nations.

The government took a step in that direction last week, announcing a $150-million Medicare pilot project that will offer physicians incentives to move from paper to electronic patient records. The program is intended to help up to 1,200 small practices in 12 cities and states make the conversion.

Individual doctors will be offered up to $58,000 over the five-year span of the project, which is intended to test the impact of incentives on the spread of electronic health records. Further programs across the country are planned.

The report published in The New England Journal also found that electronic health records were used by 51 percent of larger practices, with 50 or more doctors.

Indeed, electronic health records are pervasive in the largest integrated medical groups like Kaiser Permanente, the Mayo Clinic, the Cleveland Clinic, University of Pittsburgh Medical Center and others. These integrated groups not only have deep pockets. By combining physicians, clinics, hospitals and often some insurance they can also capture the financial savings from electronic health records.

The findings of the study, which was paid for by the Department of Health and Human Services and a grant from the Robert Wood Johnson Foundation, broadly echo previous research on the adoption of electronic health records. Large medical groups have long been the early adopters, and small practices have struggled.

But the new study is based on a large sampling — more than 2,600 doctors across the country — and a detailed survey, making it more definitive than past research, experts say. The results, they say, also show a strong endorsement of electronic health records by physicians who have them, especially for what the report termed "fully functional" records, which include features like warnings of drug interactions and reminders of care guidelines, based on a patient's age, gender or medical history.

For example, 82 percent of those using such electronic records said they improved the quality of clinical decisions, 86 percent said they helped in avoiding medication errors and 85 percent said they improved the delivery of preventative care.

"Those numbers are huge and very encouraging," said Dr. David J. Brailer, the former health information technology coordinator in the Bush administration.

Dr. Brailer also pointed to the 54 percent of physicians without electronic health records who said that not finding an electronic health record that met their needs was a "major barrier" to adoption. In short, they are not satisfied with the existing products, which tend to be designed for hospitals — big customers — instead of small practices.

"What we see is a deficit in innovation, and that is something innovators and the capital markets can address," said Dr. Brailer, who leads a firm that invests in medical ventures, Health Evolution Partners.

One wave of innovation is coming from big technology companies, like Microsoft and Google, which recently have begun services that offer consumer-controlled personal health records over the Web, which are stored in the companies' data centers. These consumer-controlled health records are intended to link up and exchange information with electronic patient records in physicians' offices and hospitals. Google, for example, has a pilot project with Cleveland Clinic, while Microsoft has announced one with Kaiser Permanente.

But the companies say their personal health record initiatives can be driven mainly by consumers. "Our strategy is not dependent on electronic medical record adoption," said Peter Neupert, the vice president in charge of Microsoft's health group.

Consumer demand will probably add pressure on physicians to adopt electronic health records. A market research poll published last week, and sponsored by Kaiser, found that 47 percent of consumers said they preferred doctors who used electronic health records.

Dr. Peter Masucci, a pediatrician with his own office in Everett, Mass., decided to embrace electronic health records to "try to get our practice into the 21st century." He looked at the cost of conventional software, which he could not afford, and instead chose a Web-based service from Athenahealth, a company that supplies online financial and electronic health record services to doctors' offices.

Dr. Masucci and his wife, Donna, a pediatric nurse and the office manager, were already using Athenahealth's outsourced financial service, and less than two years ago adopted the online medical record.

Today, Dr. Masucci is an enthusiast, talking about the wealth of patient information, drug interaction warnings and guidelines for care, all in the Web-based records.

"Do I see more patients because of this technology? Probably no," Dr. Masucci said. "But I am doing a better job with the patients I am seeing. It almost forces you to be a better doctor."