News from MEC Technologies


U.S. ranks near last in value-based healthcare, report says

June 08, 2012 | Erin McCann, Associate Editor

BOSTON – A report released Wednesday from Boston Consulting Group shows the United States trailing behind eight countries with regard value-based care adoption, and suggests criticism of the U.S. healthcare system may be merited.

The Boston Consulting Group (BCG) study examined the progress of 12 industrialized countries in adopting value-based healthcare – an approach experts say would improve health outcomes while also reducing the industry’s expenditures. 

The report, title, "Progress Toward Value-Based Health Care: Lessons from 12 Countries," evaluates national health systems along two dimensions. 

The first is the degree to which key supports of value-based healthcare are in place at the national level – for example, common national standards and IT infrastructure, national legal and consent frameworks, the ability to link health outcomes with costs and high engagement on the part of clinicians and policymakers. 

The second is the quality of a country’s existing disease registries – institutions that track selected health outcomes in a population of patients with the same diagnosis or who have undergone the same medical procedure – both in terms of the richness of the data and the sophistication of the medical community’s use of the data.

“When it comes to implementing value-based healthcare, Sweden is the most advanced country of the 12 we studied, followed by Singapore, Canada and the U.K.,” said Neil Soderlund, a BCG partner and coauthor of the report. “By contrast, Germany and Hungary have the furthest to go.”

The U.S. health system, which has the highest per capita costs of the 12 nations studied and spends 17.6 percent of GDP on health care, is also one of the laggards in the group. 

Some experts say the fragmented nature of the U.S. healthcare system has limited the collection and use of national health-outcome data. “Reporting standards and clinical outcome metrics differ substantially across the system, even within the same specialty,” said Peter Lawyer, a BCG senior partner and coauthor of the report. “There currently exists no national mechanism for compelling providers to report outcomes to disease registries. Nor is there a unique patient identifier in place that would enable research to combine data across different disease states to examine the effect of complex comorbidities.” 

“We learned that a number of countries have begun to build the infrastructure and processes to support a value-based approach, but some are significantly farther along the learning curve than others,” said Stefan Larsson, MD, a BCG senior partner and coauthor of the report. 

The challenge for U.S. healthcare executives and regulators is how to close the gap with the rest of the world. “Notwithstanding the politics of health care reform, reimbursement is moving from a volume basis to outcomes,” noted Martin B. Silverstein, MD, a senior partner and former global leader of BCG’s Health Care practice.

For more widespread and systematic use of disease registries to take hold, key stakeholders will need to champion them, he added. “National medical societies, in particular, have a leadership role to play,” said Silverstein, “both in creating uniform standards for data collection and in securing broad support and participation of practicing clinicians.”

The federal government can also support registries, he said, “by creating a legislative and regulatory framework that facilitates their establishment and by providing seed funding to get them up and running.”


Exclusive: China amends patent law in fight for cheaper drugs

June 08, 2012 | Reporting by Tan Ee Lyn

HONG KONG (Reuters) - China has overhauled parts of its intellectual property laws to allow its drugmakers to make cheap copies of medicines still under patent protection in a move likely to unnerve foreign pharmaceutical companies.

The Chinese move comes within months of a similar move by India to effectively end the monopoly on an expensive cancer drug made by Bayer AG by issuing its first so-called "compulsory license".

Similar action by China will ring alarm bells in Big Pharma, since the country is a vital growth market at a time when sales in Western countries are flagging.

The amended Chinese patent law allows Beijing to issue compulsory licenses to eligible companies to produce generic versions of patented drugs during state emergencies, or unusual circumstances, or in the interests of the public.

For "reasons of public health", eligible drugmakers can also ask to export these medicines to other countries, including members of the World Trade Organisation.

Compulsory licenses are available to nations to issue under WTO rules in certain cases where life-saving treatments are unaffordable.

"The revised version of Measures for the Compulsory Licensing for Patent Implementation came into effect from May 1, 2012," China's State Intellectual Property Office said in a faxed statement to Reuters.

The changes can be found on the website of China's State Intellectual Property Office at

China is known to be looking at Gilead Sciences Inc's tenofovir, which is recommended by the World Health Organisation as part of a first-line cocktail treatment for AIDS patients, two sources with direct knowledge of the matter said.

China's generic drugmakers were getting ready to produce tenofovir, they added.

At a drug access workshop hosted by the United Nations and health activists in Bangkok in early June, Chinese officials spoke of the changes to its patent law. Officials from Cambodia, India, Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam also participated in the meeting.

"In May 2012, China created a change in their IPR (intellectual property rights) legislation to be able to issue compulsory licenses. China is considering further strengthening its legal framework, so as to make use of legal space to produce generic drugs," said Bob Verbruggen, senior adviser for the UNAIDS Asia Pacific office, who was present at the workshop.

"China's action plan at the workshop seemed to confirm that it intends to become a generic producer for the domestic and international market," he told Reuters by telephone.


China's move follows India's granting of a compulsory license in March to local generic drugs firm Natco Pharma to manufacture Bayer's cancer drug Nexavar, used for treating kidney and liver cancer.

However, China had signaled interest in the idea from at least 2008-2009, when its State Intellectual Property Office invited foreign experts to Beijing to show Chinese officials how to prepare the legal grounds for issuing compulsory licenses.

"They wanted to know the legal perspective ... They wanted to know about Thailand's IP Act that allowed us to make a CL (compulsory license) under the law for public interests, in an emergency," said Vithaya Kulsomboon, associate professor at Thailand's Chulalongkorn University, who was invited to Beijing at the time.

Kajal Bhardwaj, a legal expert from India who is working on health, HIV and human rights trade laws, said China's move was well within the limits of international trade agreements.

"CLs have previously been issued in the region by Malaysia, Indonesia, Thailand and India. CLs have also been issued on multiple occasions by developed countries including the U.S. and EU member countries," Bhardwaj said.

"It is very encouraging that China is seeking to ensure that this right ... is reflected in its legal regime on intellectual property," she added.


China's stable of generic drugmakers has been producing the key ingredients - or active pharmaceutical ingredients (APIs) - in medicines for years, exporting them to foreign drugmakers, which then sell the patented finished products back to China at prices which the average Chinese citizen often cannot afford.

In particular, the government is struggling to provide newer HIV drugs, such as Gilead's tenofovir, known by its brand Viread and which had worldwide sales last year of $737.9 million.

China's government, initially slow to acknowledge the problem of HIV/AIDS in the 1990s, now admits to having a ballooning number of HIV/AIDS cases.

Although Gilead moved to share its intellectual property rights on its medicines in a patent pool with generic drugmakers from many countries last July in return for a small royalty, China was excluded, which meant it had to continue paying high prices for tenofovir.

Since the change in China's patent law, Gilead has offered certain concessions, including giving China a substantial donation of tenofovir if it continues to buy the same amount, said Paul Cawthorne, coordinator for Medecins Sans Frontieres' Access Campaign in Asia.

"This is all a negotiation game; this offer from Gilead came about once the news that the Chinese was considering issuing a CL came out. The end game is okay, you get a better deal or you use the CL, it's a strategy that many countries use," he said.

Gilead in Hong Kong declined to comment. No one was immediately available to comment at its head office in California.

All eyes are now trained on how China battles it out with big foreign drug exporters, especially from 2013 when the Geneva-based Global Fund to Fight AIDS, Tuberculosis and Malaria will no longer give grants to China to fight HIV.

(Reporting by Tan Ee Lyn in Hong Kong and Beijing newsroom; Additional reporting by Ben Hirschler in London; Editing by Anne Marie Roantree and David Cowell)


Technology helps drive high cost of U.S. healthcare

May 03, 2012 | Bernie Monegain, Editor

NEW YORK – Higher prices and greater use of technology appear to be the main factors driving the high rates of U.S. spending on healthcare, rather than greater use of physician and hospital services, according to a new study from the Commonwealth Fund. The study found the U.S. spends more on healthcare than 12 other industrialized countries, yet does not provide “notably superior” care.

The U.S. spent nearly $8,000 per person in 2009 on healthcare services, while other countries in the study spent between one-third (Japan and New Zealand) and two-thirds (Norway and Switzerland) as much. While the U.S. performs well on breast and colorectal cancer survival rates, it has among the highest rates of potentially preventable deaths from asthma and amputations due to diabetes, and rates that are no better than average for in-hospital deaths from heart attack and stroke.

[See also: U.S. healthcare performance score declines]

The report, “Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality,” presents analysis of prices and healthcare spending in 13 industrialized countries.

U.S. healthcare spending amounted to more than 17 percent of gross domestic product (GDP) in 2009, compared with 12 percent or less in other study countries. Japan’s spending, which was the lowest, amounted to less than 9 percent of GDP, according to study author David Squires, senior research associate at The Commonwealth Fund.

All of the countries in the study, except for the U.S., provide universal healthcare, and all struggle with rising health costs. The level of healthcare spending in the U.S., however, stands apart. If the U.S. were to spend the same share of its GDP on healthcare as the Netherlands – the country spending the next-largest share of GDP – the savings would have been $750 billion in 2009.

U.S. hospital stays ‘far more’ expensive

High U.S. spending on healthcare does not seem to be explained by either greater supply or higher utilization of healthcare services. There were 2.4 physicians per 100,000 population in the U.S. in 2009, fewer than in all the countries in the study except Japan.

The U.S. also had the fewest doctor consultations (3.9 per capita) of any country except Sweden. Relative to the other countries in the study, the U.S also had few hospital beds, short lengths of stay for acute care, and few hospital discharges per 1,000 population. On the other hand, U.S. hospital stays were far more expensive than those in other countries – more than $18,000 per discharge. By comparison, the cost per discharge in Canada was about $13,000, while in Sweden, Australia, New Zealand, France and Germany, it was less than $10,000.

“It is a common assumption that Americans get more healthcare services than people in other countries, but in fact we do not go to the doctor or the hospital as often,” said Squires. “The higher prices we pay for healthcare and perhaps our greater use of expensive technology are the more likely explanations for high health spending in the U.S. Unfortunately, we do not seem to get better quality for this higher spending.”

Prices for the 30 most commonly used prescription drugs were a third higher in the U.S. compared to Canada and Germany, and more than double the amount paid for the same drugs in Australia, France, the Netherlands, New Zealand, and the United Kingdom. Magnetic imaging (MRI) and computed tomography (CT) scans were also more expensive in the U.S., and American physicians received the highest fees for primary care office visits and hip replacements.

Healthcare in the U.S. also seems to involve greater use of expensive technology than in many other countries. The U.S. performed the most MRI and CT exams among countries for which data were available (Japan had the most MRI and CT scanners, but no data was available on the number of exams performed there). Knee replacements were also performed more often in the U.S. than any country except Germany – though hip replacements were not as common as in most of the other study countries.

High spending in the U.S. might be explained, in part, by the nation’s high rates of obesity and the associated medical costs. However, at the same time, the U.S. also has a very young population and few smokers relative to the other study countries – factors that could offset higher spending linked to obesity, the report notes.

Quality varies widely in U.S.
High spending in the United States does not always translate into high-quality care. According to the report, the U.S. had the highest survival rates in the study for breast cancer, as well as the best survival rates, along with Norway, for colorectal cancer. However, cervical cancer survival rates in the U.S. were worse than average and well below those of Norway.

Compared to other countries in the study, the U.S. had high rates of asthma-related deaths among people ages 5 to 39 and, along with Germany, very high rates of amputations resulting from diabetes. U.S. rates of in-hospital deaths after heart attack and stroke were average.

Japanese model
Japan offers an interesting model for controlling costs, Squires says. Although its healthcare system shares certain features with the U.S., Japan is the lowest-spending nation of the group ($2,878 per capita in 2008). Japan operates a fee-for-service system, while offering unrestricted access to specialists and hospitals and a large supply of MRI and CT scanners.

Rather than containing costs by restricting access, Japan instead sets healthcare prices to keep total health spending within a budget allotted by the government.

In the U.S., individual payers negotiate prices with healthcare providers, a system that leads to complexity – and varying prices for the same goods and services, according to the report.

“The Affordable Care Act gives us the opportunity to build a healthcare system that delivers affordable, high-quality care to all Americans,” said Commonwealth Fund President Karen Davis. “To achieve that goal, the United States must use all of the tools provided by the law – including new methods of organizing, delivering, and paying for healthcare that will help to slow the growth of healthcare costs, while improving quality.”