In his latest post on GoozNews, Merrill Goozner asks; “Why Is Tom Friedman Championing Higher Health Care Costs?” Goozner is referring to a recent op-ed piece in the New York Times in which Friedman gushes about a medical device start-up called EndoStim that he says “is the epitome of the new kind of start-ups we need to propel our economy: a mix of new immigrants, using old money to innovate in a flat world.”
This new-style start-up has no headquarters and keeps expenses low by depending on “teleconferencing, e-mail, the Internet and faxes — to access the best expertise and low-cost, high-quality manufacturing anywhere,” according to Friedman. EndoStim also plans on conducting clinical trials for its experimental implantable device in India and Chile where expenses are low. “[O]nly by spawning thousands of EndoStims — thousands — will we generate the kind of good new jobs to keep raising our standard of living.”
Sounds good, so far. So why does Goozner accuse Friedman of “championing higher health care costs?” The problem, according to Goozner, is that EndoStim’s goal is to develop and sell a device that will be surgically implanted in the wall of a person’s lower esophagus to prevent acid reflux—a widespread, usually intermittent condition that he says is well treated with inexpensive, over-the-counter medication for some 92% of sufferers.
And EndoStim’s financing comes from a venture capital firm whose co-founder is described as having “a real nose for medical investing and what could be profitable in a clinical environment.”
The 60 million people who experience heartburn at least once month and the 21 million who have been diagnosed with GERD (gastroesophageal reflux disease) would seem to present a very tempting target for investors looking to hit it big with profits.
Here’s the problem: Most of those 60 million people don’t need an implantable device to treat their heartburn. They can manage their occasional symptoms with OTC drugs and long-term, could prevent heartburn by cutting down on smoking and eating high-fat foods, lose weight and make other lifestyle choices. Studies have found that only 1-2% of GERD sufferers are not helped by medication and lifestyle changes.
The other problem is that EndoStim is hardly the first company to target surgical solutions to GERD: More than a half-dozen implantable devices and minimally-invasive surgical techniques have been developed and undergone clinical trials in recent years to treat GERD. In 2002, for example, Medtronic, the giant medical device company, began conducting clinical trials of an esophageal barrier made of contact lens-like material that a surgeon would put in place via endoscopic surgery. The trials were halted in 2007 because of lack of efficacy—and reports of significant side-effects. For an in-depth discussion of all the surgical techniques and implantable devices devised to treat GERD (none of which have been shown to be effective), check out this Clinical Policy Bulletin published by Aetna.
In the past, too much weight has been put on developing medical devices and technologies such as digital mammography, cardiac stents and orthopedic implants that could be “profitable in a clinical environment” and too little weight has been put on proving that these new, expensive technologies actually improve outcomes beyond existing treatments.
The history of treating heartburn and GERD is already checkered. Goozner mentions the “lengthening pharmacopeia devoted to [acid reflux’s] control,” including the blockbuster Prilosec and its me-too successor Nexium (with sales upwards of $6 billion) that offer little benefits beyond OTC formulations that can be bought for one-third the price.
“Now, back to the people who have chronic heartburn and for whom none of these products work. Is an electro-mechanical implanted device that dams up the esophagus a solution? How much will the device cost? How much will the operation to implant it cost? Is there any reason to think it will work any better than the drugs that are already on the market?” asks Goozner.
“The answers to those questions won't come cheap. Unless the company is able to use a loophole at the FDA that allows companies to avoid clinical testing by claiming the device is similar to something already on the market (i.e., not innovative), the company will need to find surgeons willing to enroll hundreds if not thousands of patients who failed drug therapy.
“And if it passes that test, there's nothing in the law that limits its use only to patients with chronic disease who don't respond to other, less costly treatments."
Friedman might be right when he waxes on about the future of new-style start-ups and the benefits of the nimble and globally-oriented techniques they use to innovate. His mistake is choosing to write about an industry and a field that he clearly doesn’t understand. Medical innovation needs to move away from the profit-driven motive that has led to expensive new technologies that drive up health care costs without a comparable effect on improving the nation’s health. In these changing times, as the government revisits how devices are tested and approved and comparative-effectiveness studies—not marketing—will help doctors decide which treatments are best, companies like EndoStim will face a far rougher road to success.