Would health care reform stifle innovation?

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MARCO WERMAN: I'm Marco Werman. This is The World. Tonight's a big night for President Obama and his push for healthcare reform. The president is making his case for reform in televised speech before a joint session of congress. There's a lot at stake for Americans and that's something all parties in the healthcare debate can agree on. But there may a lot at stake for people in other countries as well. Some of the president's critics say changing the US healthcare system could stifle the kind of expensive medical research and innovation that American companies are known for. That, the argument goes, would be bad for patients all around the globe. Zack Cooper is a health economist at the London School of Economics. Zack Cooper if the US were to control healthcare costs what could that mean for medical innovation that benefits the entire world?

ZACK COPPER: You know Marco it's interesting that you talked about spending. You know the last couple of years we've seen spending spiral out of control. But if we look at some of the R&D pipelines at some of these big drug companies we haven't seen the innovation. So I think this link between spending a lot on healthcare and having this very, very innovative pharmaceutical industry is really a myth. And I think what the president's trying to do is change the incentives from providing more to providing better. And I think when we start focusing on better that's when we get quality.

WERMAN: If you think the expense and innovation is kind of a myth what do people around the world look to the United States for in terms of medical care?

COOPER: I think the pharmaceutical sector in whole is doing a really, really good job developing a host of innovative drugs. You know we've done a good job in areas like blood pressure medication. Some of the peptic ulcer drugs. And a lot of that research is actually being funded by the government through the NIH. You know and nothing is going to change about the NIH budget under President Obama's reform plan. You know if anything he's going to highlight things like comparative effectiveness research which promote drugs that are better than existing drugs rather than rewarding pharmaceutical companies for bringing out drugs that are referred to as me-too drugs that are similar if not worse than existing drugs on the market.

WERMAN: We were recently looking at a Tufts University study sited by the Pharmaceutical Research and Manufacturers of America ï¿½ a drug industry trade group. It said 75% of all new drugs approved worldwide from 2005 to 2007 were first introduced in the US. So that would seem to suggest that the US healthcare system, even though it might be inefficient, really does drive medical innovation for the rest of the world.

COOPER: I think it does drive innovation but I don't think anything that President Obama is proposing is going to hurt innovation. If anything I think it's going to make it better. You know I'll give you three examples here. Let's talk about health policy innovation. Seventy-five percent of people in Iowa are insured by the same company. You know that's not a recipe for innovative health policy. You know in terms of medical care the places that provide the best care, the most innovative care, the Cleveland Clinics and the Mayo Clinics of the world are actually the cheapest. And the question is how do we create incentives to get more Mayo Clinics, to get more efficient providers? And similarly on the pharmaceutical front if so much is drugs coming out that aren't necessarily innovative but simply enter the market how do we reward drugs that are really fundamentally better? How do we use comparative effectiveness research to get drugs that are not only able to enter the market but are able to really help patients?

WERMAN: So obviously a pivotal speech tonight for President Obama. Here's a preview of it he gave to ABC's Good Morning America.
BARACK OBAMA: The intent of the speech is to: A) Make sure that the American people are clear exactly what it is that we're proposing. B) To make sure that democrats and republicans understand that I'm open to new ideas; that we're not being rigid and ideological about this thing; but we do intend to get something done this year.

WERMAN: Zack Cooper, as a health policy expert sitting outside the US, what are you looking for in the president's speech tonight?

COOPER: Well I want four elements from the president. First I want him to remind us why healthcare is important. You know why were we ï¿½ . Why are we focusing on healthcare reform? Second, I want to know details. I want the president to take ownership and spell out what he thinks we need to have in the plan. Third, I think it's important that he talks about universal coverage ï¿½ that he really does make a push on expanding coverage to people who don't already have it. And I think he has to say that this is bigger than politics. You know this isn't about reelections. This isn't about democrats and republicans. It's about healthcare. This is an issue that concerns all of us. It isn't partisan and we need to do better.

WERMAN: Zack Cooper is a health economist at the London School of Economics. Greatly appreciated. Thank you.

COOPER: Thanks Marco.