Where's DDMAC's Head At?

At the recent Healthcare Blogging Summit (see "Physician Blogging - Survey Results"), an audience member asked the following question:

How is DDMAC likely to regulate pharmaceutical promotion via blogs?

Or, something to that effect.

In the new world of "Web 2.0," pharma marketers need to know where the lines are drawn by FDA. [DDMAC, the Division of Drug Marketing, Advertising, and Communications, is the FDA entity in charge of regulating all promotion and advertising of prescription drugs, including direct-to-patient (DTC) and advertising and physician promotion.]

Since I was on the panel to which this question was directed, I took a stab at answering it.

"The image that comes to my mind," I said, "is an ostrich with its head in a hole in the ground." Actually, I said "big bird," but everyone knew what I meant.

Another audience member agreed, but said he had different hole in mind.

It was an interesting image to end the session with.

The saga of the FDA vs. the Internet goes back at least ten years -- to October 16 & 17, 1996 -- when the FDA hosted its first ever (and maybe last ever) public hearing on the Internet. The purpose of this 2-day gathering was to help FDA evaluate how "the statutory provisions, regulations, and policies concerning advertising and labeling should be applied to product-related information on the Internet and whether any additional regulations, policies, or guidances are needed."

I guess the FDA decided there were no additional "regulations, policies, or guidances" needed because it has been mostly silent on the issue all these many years.

In attendance at that seminal FDA meeting were many of the people directly responsible for creating the "Medical Internet." I participated on the Web Links Panel, which included representatives from the pharmaceutical industry, advertising and marketing industry, medical associations and publishers, patient advocacy groups, other government agencies like the Federal Trade Association (FTC), physicians, web site developers, etc.

All you "newbies," which I define as anyone who began using the Internet for marketing AFTER 2000, should read the minutes of that meeting. You might just learn something!

The FDA, like the industry it regulates, focuses 94% of its attention to broadcast (mostly TV) and print communications, even while these media channels are losing ground to the Internet in terms of reach.

This was made evident to me from data reported in a recent Government Accounting Office (GAO) report to Congress: "Prescription Drugs - Improvements Needed in FDA's Oversight of Direct-to-Consumer Advertising." You can access the report here.

In the report, the GAO claims the FDA "lacks an effective way to screen, review and track the more than 10,000 ads and Web sites brought to the agency's attention each year" (see "Group Wants FDA to Review More Drug Ads," NYT, 12/14/2006).

There is some revealing data in the GAO report that illustrates where DDMAC's head is at.

First, the FDA reviews every DTC TV ad it receives, regardless of the merit of the claim against it. The GAO states: "FDA officials told us that they review all final and draft DTC television advertisements that FDA receives because these materials are likely to be widely disseminated to consumers."

While TV does have incredible reach among consumers, so does the Internet. Forgive me for not getting into all the numbers in defense of that statement. Go ask Jack Barrette at Yahoo! for his slide deck. NOTE: Also take a look at today's post to Eye On FDA where you can find links to numbers (see "New Media and YOU").

The FDA should be taking a closer look at drug promotion via the Internet because there seems to be a wild-wild West scenario playing out right now with many companies pushing the envelope and using ad techniques that a majority of experts consider violative of FDA regulations (see, for example, "The Girl From Google" and "Celebrex Joins the bAdWord Bandwagon!").

Take a look at the following chart, which shows the number of final DTC and "consumer-directed" (eg, patient brochures distributed by physicians) materials submitted to the FDA from 1999 through 2005. The data is from the GAO report. I replotted it to better demonstrate the trends.


The red "DTC" line excludes the Internet, which is shown by the blue line. The main trend I think this chart shows is that while there has been an across-the-board increase in all types of materials submitted to the FDA for review, the number of Internet materials is increasing fastest, at least up until 2004.

Obviously, there is a lot of Rx promotion via the Internet and DDMAC should not keep its head in the broadcast/print sand and continue to ignore what's happening in the real world.

In the future, the drug industry will bombard the FDA with lots more TV-based materials for review prior to airing (see "Pay Per DTC Ad View Update"). If the FDA continues to give these priority -- and it will because the industry will pay the FDA to do it! -- then advertising on the Internet will continue to fly under its radar for a long time to come (unless Congress prohibits DTC altogether -- not likely, in my book).

The Case for Self-Regulation
The GAO report also documents that prior to 2002 it took the FDA just 2 weeks on average to issue warning letters about violative Rx promotions, whereas today it takes 4 months. This is due, claims GAO, to the additional resources needed for these letters to pass legal review within FDA. HHS defended the review process because it increases compliance by the drug industry.

"The FDA cannot review every piece of direct-to-consumer advertising. As a result, we must rely in great part on voluntary compliance. [my emphasis] The OCC [Office of Chief Counsel] review has strengthened the quality and legal sustainability of the letters actually issued by the FDA and, by doing so, has paved the way for for enforcement actions with real teeth. That, more than anything else, has encouraged voluntary compliance with our regulations." -- HHS as quoted in GAO report

If the FDA depends upon voluntary compliance, then it makes sense for the industry to develop its own voluntary guideline for Internet advertising just as it did for broadcast and print. This way, if and when DDMAC gets its head out the ground or wherever else it may be, the industry won't be hit with the "teeth" of enforcement.

[BTW, four months real world time is about 1 year Internet time! That pace of regulation just wouldn't cut it with the Internet.]

That's my opinion and I'm sticking to it!

Merck on a Roll

Merck is on a roll these days.

For one thing, it's stock price has almost recovered from its low point after Vioxx was withdrawn from the market:
Who among us -- who did NOT cast the first stone -- bought stock in Merck around December, 2004?

What has contributed to this reversal of fortunes?

Was It Victory in Vioxx Litigation?
The Wall Street Journal reports today that Merck "prevailed in the 12th Vioxx trial since the painkiller [Vioxx] was pulled from the market, convincing a New Orleans jury that it shouldn't be held responsible for a heart attack suffered by a man who took the drug." You can download the WSJ Vioxx Trail ScoreCard here, which gives some details of this and other Vioxx cases that have been decided in court.

The WSJ article also mentions that there are some 27,200 trials that Merck vows to fight one by one. At the current rate of 6 trials per year, that could take quite a while (4,533 years to be mathematically precise).

But if you look at it another way -- ie, percent of past trials won (blue), lost (red), or tied (gray) -- and if you believe that future expectation is based on past experience (as many investors seem to do), then it looks rosy for Merck.
Was It the PR?
Soon after the Vioxx debacle, Merck initiated its "Patients Come First" campaign, which I am sure the PR agency will cite as a major contributor to the upswing in Merck's stock. I criticised that campaign back in June, 2005 and questioned its veracity (see "Patients Come First?").

I doubt that positive spin alone would have helped. I was skeptical and I am sure the majority of TV viewers of the ads also were skeptical.

It Was Gardasil, Stupid!
It wasn't the Vioxx Victories or the PR that killed the Merck beast (aka, negative public image), it was Gardasil, Merck's new cervical cancer vaccine.

Although the Gardasil DTC campaign may need improving (see Rich Meyer's criticisms at The World of DTC Marketing blog: "Gardasil launches DTC with little fanfare"), it was effective for me. And I am sure that word of mouth will spread quickly.

For me, the launch of Gardasil sent the message that Merck is a leader in the area of disease prevention, which puts people first. That should have been the PR message -- "people come first" -- not "patients come first." We all want to avoid becoming patients. In any case, Gardasil gave the PR campaign veracity.

In the background for me is the fact that Merck is not shying away from taking on the religious right that above all wants to deny that teenagers have sex. In every Gardasil ad I've seen, there's a young girl and the message is clear: protect her!

It is said that vaccines are not a profitable business for pharmaceutical companies and few are pursuing that area of development (unless they gets oodles of bucks from the Bioshield Boondoggle). Gardasil says that Merck remains a leader in vaccine development, which is another plus in my book.

Redemption or Bumps Ahead?
So, it is possible for a drug company to redeem itself -- even in my eyes. I sincerely hope that years from now we don't discover some problem with Gardasil and that it is shown to be truly effective. There's always a risk, but I am glad Merck took it.

Still, all may not be rosy for Merck ahead. Merck confirmed for the first time yesterday that it is developing a cholesterol drug in the same class as torcetrapib, "the once-promising compound for which Pfizer Inc. halted development earlier this month due to a higher-than-expected death rate in a patient trial. The study's halt raised concerns that other so-called CETP inhibitors in development would have safety problems." (WSJ)

"But the Merck compound, MK-0859, showed no serious cardiovascular problems in an eight-week mid-stage trial, Peter Kim, president of Merck's research arm, told analysts and investors..." (see "Merck Gives Glimpse Of Its Drug Pipeline").

I hope that isn't just another spin of the facts designed to pump up investor confidence.

For more on Pfizer's torcetrapib failure, see "Pfizer's torcetrapib: Who Knew What, When?"

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Celebrex Joins the bAdWord Bandwagon!

Just when I thought it was safe to stop raking Pfizer over the coals about torcetrapib, they go and do something stupid! I'm talking about running a Google Adword program that at least 85% respondents to my poll on the topic (see below) consider in violation of FDA regulations.

In case you haven't seen the previous posts on the topic of Google pharmaceutical "bAdWords," start by looking at "The Girl from Google," which describes the issue when it first arose with Lunesta.

The following are Google Adwords for Celebrex that are currently running on a web site that I frequently visit. (Sorry, I can't say which web site. Terms of Use -- need I say more?)



BTW, these are not reproduced actual size here. The real ads have "Leaderboard" dimensions of 728 x 90 pixels, much larger than the typical 468 x 60 "banner" ad. (You can click on the images to see the full-size versions.)

Once again, like the Lunesta bAdword, these ads appear to violate FDA regulations regarding DTC advertising; namely, that whenever an Rx brand name and its indication are mentioned in the same ad, fair balance or the brief summary of the package insert must also be included. Generally, on the Internet, that means a direct link to the package insert. There is no such link in the above ad.

Google AdWords Not Advanced Enough for Online Pharmaceutical Advertising
If Pfizer ran a more technically advanced type of ad, such as a "Rich Media" ad, it could include a mouse rollover, for example, that pops open a window containing fair balance information. Unfortunately, this kind of thing isn't possible using inexpensive (but pervasive) Google Adwords, which can contain only one active link. Another limitation of Google AdWords is the inability -- no matter how large the box -- to include more than about 50 characters in the descriptive text block. This is not enough to do a compliant brand ad (unless it were a "reminder ad").

What do you think? (Ignore this poll if you've taken it before for the Lunesta ad.)

Does this AdWord Violate FDA's DTC Rules?

Yes No Not Sure

I expect such shenanigans from Sepracor, the marketer of Lunesta. That company, after all, is a serial violator of their own agreement to follow PhRMA's voluntary Guidelines on broadcast and print DTC advertising (see "Sepracor Sneaks In Lunesta Reminder Ad"). But, I am shocked and disappointed that Pfizer would condone this kind of ad for Celebrex.

It could be that the Celebrex brand team hired the same online ad agency that was responsible for the Lunesta Adword account. The Pfizer people simply may not know what's going on -- not the best defense, but, if true, there's hope that someone in authority at Pfizer will see this post and put an end to this Google campaign. I note that the Lunesta bAdWords disappeared soon after I outed them in this blog. Hopefully, Pfizer will do the same.

Pulling the Celebrex bAdWord may send a message to Google, which must share some of the blame. After all, the "Girl form Google" gave a presentation at a major industry conference and used this type of AdWord as an example of how pharmaceutical companies should advertise with Google.

Google Says: "We're Not in That Business"
My good personal friend, Harry Sweeney, who is also a friend of the pharmaceutical industry and often disagrees with my position on many pharmaceutical issues, agrees with me on this. Here's what he said about Google's promulgation of bAdWords in a recent article he wrote for Pharma Marketing News:

I felt sorry for one presenter from a major search engine company who brightly demonstrated how all of the online services might be supported by pharmaceutical advertising, using a patently violative, illegal, online ad to do it. When she was questioned about the legality and potential risks for advertisers from the audience, her naivete spilled over when she replied "That's for individual companies to figure out. We're not in that business." Or words to that effect. -- see "Pharma's Plodding Approach to eMarketing."

Harry was referring to the Google presentation I mentioned above and in my GfG post. Clearly, Google is aiding and abetting as the actors in Law & Order might say.

What Could Pfizer Do?
Here's what I think Pfizer could do:

• find out who's responsible for this ad campaign and put a stop to it;
• lead the way in developing guidelines for online DTC advertising that not only are consistent with FDA laws, regulations and guidelines, but that allows for effective use of the Internet's unique features. One such guideline could be: In all ads that mention a brand name and its approved indication, provide at least a one-click method by which the viewer can access side effect information and/or brief summary; and
• communicate these guidelines to the agencies that handle Pfizer's online ad accounts.
  

In other words, start the ball rolling on developing industry Guidelines for Online DTC Advertising to complement PhRMA's DTC Guidelines for broadcast TV and print advertising.

Physician Blogging - Survey Results

Yesterday, I participated in a panel discussion at the first Healthcare Blogging Summit, which was co-located with the larger Consumer Health World conference in Washington, DC. The summit was organized by Dmitriy Kruglyak, CEO of Trusted.MD, a social network formerly known as The Medical Blog Network (TMBN).

The main focus of the larger Consumer Health World conference was "consumer-directed healthcare" (CDH) and fellow-traveling disciplines such as wellness, spas, alternative medicine, etc. Many attendees were from the managed care industry and despite the hype of CDH as the "next new thing," much of the movement towards CDH is happening within managed care organizations.

There is intense interest in CDH on the pharma side, and rightly so. Some of the seamy side of CDH involves alternative, holistic medicine, which means it's anti-pharmaceutical. Yet, major CDH proponents are huge payers -- health plans and employers -- that pharma needs to court.

I have a feeling that as CDH programs are rolled out, more and more charlatans will come out of the woodwork to vie for consumers' HSA funds and the money that plans will give them for "wellness" and other prevention programs as enticements.

Anyway, back to the Healthcare Blogging Summit. I hope Dmitriy invites me to the next summit, which is scheduled for April, 2007 at the Las Vegas Venetian Hotel! I think I can make a good case for getting an invite, especially after Fard Johnmar -- another panel member and blogger over at Envisioning 2.0 --– voted me one of the three best healthcare bloggeres! (It's good to be #3!)

Physician Blogging
at the start of the panel. Physicians comprised the largest segment of responders to the survey. “This is not surprising,” says With regard to healthcare blogging, Fard should know what he's talking about. He and Dmitriy conducted a survey of over 200 healthcare bloggers, the results of which were summarized by FardFard, “physicians really started the healthcare blogosphere.”

Some other top-level results of the survey, which you can access here, are the following:

• 47% of respondents spend between one and two hours a day maintaining their blogs.

I could see that a lot of Summit attendees -- most of whom were healthcare administrators at health plans or healthcare systems plus 2 or 3 pharma people (one of whom described himself as a self-appointed blogging evangelist within his company) -- were surprised by that statistic.

For physicians to spend that amount of time each day writing blogs is truly amazing.

Another key finding:

• Respondents are split on whether running advertising negatively impacts a blogger’s credibility. However, 54% say they are willing to continue or begin featuring advertising on their blogs.

These statistics suggests that Dmitriy has hit upon a good business model by providing a social network focused on physicians. No doubt that he will be looking for pharmaceutical company sponsorships. Imagine having your brand in front of physicians one or two hours every day as they blog away! Talk about “stickiness!” Of course, pharmaceutical marketers will want to reach a massive number of physicians, but keep in mind that these physicians are likely to be thought leaders in the online social networking space. Whether or not they influence script writing remains to be seen. Just a thought.

But another healthcare blogging statistic may put a damper on pharmaceutical interest:

• About 40% of those surveyed hide their identity while blogging in order to protect themselves from recriminations

Working with an anonymous physician audience will be a problem for pharmaceutical marketers unless they can get some good aggregate, de-identified data that helps them measure ROI. For example, if physician bloggers on a social networking site like Trusted.MD could be segmented by specialty, physician practice size, zip code, etc., that might help with the analytics. I am sure Dmitiry has thought of this.

To download a free copy of the survey report, please go to: www.envisionsolutionsnow.com/survey.html

Tufts Hangs Tough on Opportunity Cost Analysis

Last week I questioned the $800 million quoted in the press and other blogs as the cost of Pfizer's torcetrapib failure (see torcetrapib: "$800 Million" Failure but Kindler Safe). I doubted this was the real cost and suggested that Pfizer was just quoting the results of a 2001 study by the Tufts Center for the Study of Drug Development.

Mostly, I was upset that journalists would just accept this number at face value as the actual loss due to torcetrapib's failure. I suggested that this was an "estimate" that the industry trots out whenever it wants to argue how expensive it is to develop new drugs.

In my post, I mentioned that the Tufts' estimate was disputed because of the inclusion of "opportunity cost of capital" in the calculation. Apparently, I misunderstood the economics, because the lead author of the study, Joseph A. DiMasi, PhD, Tufts CSDD Director of Economic Analysis, submitted the following tough, no holds barred, comment to this blog in defense of the estimate:

I don't read your blog, so I don't know all that you may have written about R&D costs, but someone forwarded this particular blog entry to me. I won't comment about torcetrapib because I don't know (nor do you) what their actual or projected costs were or what they included (i.e., discovery costs, preclinical development, chemistry, manufacturing and controls R&D throughout the process, all clinical trials for all indications, infrastructure costs for an ongoing concern, interaction with regulatory authorities and preparation of regulatory submissions, etc.). I doubt, given in particular statements that I recall from Pfizer people about what they think average costs are for a more recent period than we analyzed, that they simply took $800 million from our (Tufts) study (which included the costs of failures and what may be called time or financing costs).

I will, however, correct you on what you have written in this blog entry about our study and its methodology. For your information, PhRMA did not, as you wrote, sponsor the study (nor, for that matter, did pharma). You write that the study is disputed. That's true, but, as far as I can see, the ultimate sources of that criticism are those with obvious political agendas and who lack appropriate expertise. I have never seen a criticism of the methodology from a bona fide economist. The paper and its predecessor were published in the most methodologically rigorous journal in the field of health economics. Anonymous referees and the editors of the journal, who are among world's leading health economists, reviewed the methodology.

What you call financing costs were clearly quantified in these papers and distinguished from actual cash outlays. [my emphasis] Economists do not dispute the relevance of the time, or financing, costs. You wrote: "It's like me saying that the cost of my BMW equals the actual $50,000 I spent on it plus the money I didn't earn by failing to invest the $50,000 elsewhere. Well, actually no. It's nothing at all like that. You have confused a consumption good with an investment good. That makes it impossible to present a realistic analogy, but keeping to your context an appropriate analogy would go as follows. It's rather like you paying $50,000 for your BMW in cash today, but dealer won't deliver the car to you for ten years.

If you still doubt this logic, then I have a proposition for you. The next time that you want to buy a BMW send me a $50,000 check instead. I promise to pay you back exactly $50,000 ten years from now. By your logic you should be OK with that. Both possibilities should be equally valuable to you. In fact, I would sweeten the pot and pay you an extra dollar ten years from now so that, by your logic, you would actually be better off by sending me the $50,000 check.

My main takeaway from Dr. DiMasi's comment is that he's trying to scam me out of $50,000! Of course, I refused his offer ("Too bad," he said, "I was hoping you would take me up on my offer.") .

If Dr. DiMasi didn't like my analogy (confusing a "consumption good" with an "investment good"), then he surely won't like this analogy presented by my friend Matthew Holt resident maven on The Health Care Blog:

To illustrate, Lets say me and a friend have drunk 3 beers a day for two years at $10 a day. Let's say instead of drinking for the first three months, I'd invested that money in Google stock instead. Now I spent $6,000 on beer and $1,000 on Google stock. My friend spent $7,000 on beer. But at the end of the 2 years my Google stock made me a profit of roughly $6000. By Tufts' accounting logic my friend spent $13,000 on beer--the $7,0000 he spent and the $6,000 he didn’t make on the Google stock because he spent the first $1000 on beer.

The problem with their logic is that it ignores the expected returns -- his hangover and my expected financial reward. My financial reward is of course analogous to the money pharma makes when its products are successful (which is a hell of a lot more than 1.2bn over 10 years!)

Matthew uses both a consumption good (beer) and Google stock (an investment good) in his analogy! I love his creativity, however, and urge readers to submit other examples illustrating the concept of opportunity cost to help us non-bona fide economists understand.

More Examples
To get you started, here are some more examples I found:

"An example of opportunity cost would be going to the movies. The cost of going to the movie is $9.00 or whatever ridiculous amount of money your movie theater charges. The opportunity cost would be something else you could have done with that time, such as studying." [This from the Teenanalyst.com, a site advising teenagers about investments. I'm sure studying is an opportunity cost uppermost in the minds of teenagers!]

"If a shipwrecked sailor on a desert island is capable of catching 10 fish or harvesting 5 coconuts in one day, then the opportunity cost of producing one coconut is two fish (10 fish / 5 coconuts)." [That's just weird!]

"The opportunity cost of buying a box of Cracklin Oat Bran is one-and-a half boxes of Wheat Chex, if that's your second favorite cereal."

Here's one I just thought of:

Assuming it takes my son only 4 years to complete his undergraduate study at Penn State, I will have spent over $100,000 on tuition, room, board, books, wine-in-a-box, transportation, etc. A college education is clearly an investment good -- there's no payback until 2009 at least, when my son is scheduled to get his degree (a college education isn't worth anything without the degree!). Sure, some of you might say wine-in-a-box shouldn't be considered in the calculation, but then I'd say you are not a bona fide expert (ie, a parent of a college student)!

But wait! I forgot my lost opportunity to invest that $100,000 in the next best thing (whatever that is). I could have made another $100,000 with a better investment. So, I will really be spending $200,000 on my investment in my son's degree. I'll have to factor that in on my next IRS return!

But wait! Suppose my son, God forbid!, quit college in his junior year and never earned his BS degree? Did I actually spend $200,000 on his failed attempt? I mean, could I go around to my friends and relatives and say, it was a $200,000 failure? I don't think so. But, IMHO, that's what Pfizer did with torcetrapib -- it spent something, probably a great deal, but the development of torcetrapib was cut short before approval. The $800 million Tufts estimate doesn't apply to that situation.

However, as Dr. DiMasi says, we don't know what Pfizer actually spent, so it's a moot point.

Anyway, I thought readers (and Dr. DiMasi, if "someone" should happen to forward this blog entry to him) might be interested in what a few other people had to say on this topic. The following is a recent thread from the Pharma Marketing Online Discussion Forum (not all members of this forum have "obvious political agendas" and I doubt there's a bona fide economist among them):

Tufts pegs the cost of developing a biotechnology drug at an even higher $1.2 B in the following release: http://csdd.tufts.edu/NewsEvents/NewsArticle.asp?newsid=69

Do these claims of extremely high drug development costs help pharmas justify the high price tags for their products?

--David Jastrow

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People are considering torcetrapib a major loss. And while it's true that the $1 billion loss is a large onetime loss. You must consider the amount of derivative research data that is now available to Pfizer. I believe Pfizer has a secondary HDL drug in the pipe. How much cross pollination do you think there will be from the data collected from the torcetrapib trial?

--Laurent Laor

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While Tufts includes the projected cost of projects that never make it to market (perhaps those that never get past Phase 1), let's not forget that 55% of their funding comes from "unrestricted" grants and commissioned projects from the pharmaceutical industry.

I personally do not doubt that when you figure in the cost of salaries, benefits, overhead, legal services, attending conferences, publishing study reports, etc., these costs are realistic.

--Michael Altmann

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From a clinical point of view, it is interesting that I can accomplish the same objective with soy, exercise and niacin. Didn't cost $1.2 billion to figure it out, and I don't have the problem of killing off my patients.

--Avery L. Jenkins

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The Tufts studies are certainly very high estimates of drug development costs.
I'd suggest that interested readers check out Public Citizen's critique of the Tufts studies prior to accepting their results. Link here: http://www.citizen.org/pressroom/release.cfm?ID=954

So, yes, the Tufts studies help the drug industry make claims as to why it needs to keep prices high, but the costs of drug development in the Tufts studies are not accurate, thus making the argument for high prices less compelling. And when making a me-too drug or altering the molecule of one's own existing product just enough to market it as new, that certainly costs much less than a billion bucks. Switching a drug to extended release format is also not likely to run anywhere near a billion dollars.

--CP, Clinical Psych Blog

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Does it cost that much to discover and develop innovative products? Yes, if you consider the costs ploughed into all the investigational drugs that fail in each Phase of testing, not to mention those such as torcetrapib that have cost a boatload of money that will never be recouped. BUT, that still doesn't justify the fact that clear profits for Pharma average about 17%-20% when the clear profit margin for most other innovation-based industries is about 12%. The first company to swallow the short-term losses, tell Wall Street to piss-off with the quarterly pressure, and lower their prices just a little will be the winner.

--Siobhán NíBhuachalla, M.P.H.

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The major problem with the Tufts studies (other than their propaganda use) is that the "opportunity cost of capital" is a huge part of the number. I cant think of any reason to count that, as it has a return at the end.

But no problem--the $800m/$1.2 bn number makes the industry feel good. Who cares how it came about?

--Matthew Holt

That's enough on this subject from me -- discuss!

I'm off to Washington, DC, where I am participating in the Healthcare Blogging Summit. Hopefully, I'll have a report on that for Tuesday's posting.