Pharmacy & Therapeutics - October 2008 - (Page 608)

HEALTH CARE AND LAW participation in Medicare and in the network of a managed care organization (MCO). The path to marketing a new drug is similarly cumbersome. A pharmaceutical company must start by protecting its invention with a patent that is issued by the federal Patent and Trademark Office (PTO). It must then receive permission to conduct clinical testing from the federal Food and Dr ug Administration (FDA), which for many products culminates in review of the results by an advisory committee composed of private scientists. After approval for marketing is received in the form of a New Drug Approval (NDA), the manufacturer must adhere to marketing restrictions contained in the NDA. Next, in order to sell the drug widely, the manufacturer must obtain a place for it on the formularies of private pharmacy benefit management companies (PBMs), which administer reimbursement plans. Ideally, the drug will also be included in the standards of care promulgated by private medical specialty societies. After all of these steps, the drug still cannot be sold unless it is prescribed by physicians and is dispensed by pharmacists who are subject to licensure and a range of other regulatory requirements. These organizations are balanced by government agencies, which provide a more disinterested external perspective that is presumably less subject to economic selfinterest. In essence, the system benefits by receiving regulatory input from varying perspectives. State and local agencies are often closest to the actual provision of health care and the most sensitive to regional needs. Federal oversight is usually necessary to provide national coordination, for example, to prevent physicians who have been disciplined by a medical board from gaining licensure in another state. Private organizations offer the deepest expertise in the clinical aspects of care. ject to a series of equally confusing court decisions. CONSEQUENCES OF THE REGULATORY SYSTEM Despite the complicated and inefficient nature of its oversight, American health care has flourished over the past hundred years. Rather than hindering its progress, the complex system of regulation, for all of its flaws, may actually have served to support and nurture the overall enterprise. Consider, for example, the public confidence that is engendered in the competence of physicians through licensure requirements and in the safety and efficacy of prescription drugs through the FDA approval process. These programs enhanced overall respect for major elements of the health care system and greatly expanded markets for the goods and services that they provide. Regulatory programs that include major funding components, such as Medicare and research support administered by the National Institutes of Health (NIH), serve an additional role of creating a financial base for key sectors of the industry. Viewing the system in this way may help to provide perspective for those who have to navigate it. It is also important to consider the underlying nature of the system, with both its positive and negative elements, in evaluating proposals for reform. A more thorough presentation of the regulatory structure of the health care industry and the themes that drive it can be found in my book. Rather than hindering its progress, the complex system of regulation, for all of its flaws, may actually have served to support and nurture the overall enterprise. SYSTEM SHORTCOMINGS This explanation is not meant to suggest that the system is without its share of shortcomings, because some of them are substantial. Critics charge that private regulatory bodies are often more interested in safeguarding the reputation and economic status of their industries and professions than in protecting the public. State regulators, particularly those in smaller jurisdictions, may be subject to excessive influence by those they are supposed to oversee. Federal agencies may be slow, bureaucratic, and inefficient. Moreover, in some areas of regulation, the division of authority is not clearly outlined, a drawback that has led at times to chaotic results. A prime example is the oversight of health insurance. States take the lead in regulating insurance, but the federal government pre-empts some state authority over employer-sponsored health coverage under the Employee Retirement Income Security Act of 1974 (ERISA). The lines of responsibility are not clearly defined in the law, and they have been sub- THE LOGIC BEHIND REGULATORY COMPLEXITY Is this complexity of health care regulation merely a result of a series of historical accidents and bureaucratic turf wars, or does it serve a purpose? The system’s intricacy may make it inefficient, but it actually fits quite well with the American temperament. It is driven by an interplay of competing forces that seek to have their interests represented. Different levels of government vie with one another for supremacy, as they have since the founding of the republic. This system of checks and balances makes it less likely that any one level, federal or state, will become too powerful, and it ensures that the overall system will receive input from each. The regulatory structure also reflects a form of public–private partnership. Private organizations, such as the Joint Commission and medical specialty boards, which are composed of professionals who actually work in the field, inject technical expertise. REFERENCE 1. Field RI. Health Care Regulation in America: Complexity, Confrontation and Compromise. New York: Oxford University Press, 2007. I 608 P&T® • October 2008 • Vol. 33 No. 10

Table of Contents Feed for the Digital Edition of Pharmacy & Therapeutics - October 2008

Pharmacy & Therapeutics - October 2008 Contents Editorial Medication Errors Prescription: Washington New Drugs/Drug News/ New Medical Devices Drug Forecast Medical Management of Parkinson’s Disease Why Is Health Care Regulation So Complex? The Next President’s Prescription for Action on Drugs Trends in Managing Multiple Sclerosis Product Profiler: Sancuso®

Pharmacy & Therapeutics - October 2008

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