Johnson & Johnson's announcement last week that it would exit the stent business is, on its face, a classic case of winners and losers.
But if you wanted to identify a single product that embodies both the strengths and flaws of the American health care system, you won't do much worse than the $2,000 drug-coated stent.
These tiny metal devices, which are used to prop open clogged coronary arteries, have been credited with helping improve the quality of life of millions of people around the world.
But these wonders of biomedical innovation also have been blamed for helping drive up the cost of health care in the United States. Compelling evidence suggests that many patients who are undergoing hourlong, $11,000 stent procedures could be treated equally effectively with prescription drugs and behavioral changes.
Taxpayers are bearing the brunt of this overuse. Stents by and large end up in older people, who typically rely on Medicare to foot most of their health care costs. From fiscal year 2004 to fiscal year 2009, the federal government's Medicare Part A program paid an estimated $25.7 billion for cardiac stent procedures. By some estimates, payments from Medicare account for 40 percent of the stent industry's total annual revenue.
Minnesotans have a lot at stake in this discussion. J&J pioneered the development of stents, but in recent years it had been overtaken by three rivals, including Fridley-based Medtronic and Boston Scientific, which employs about 2,500 at its stent division in Maple Grove.
Stents are a miraculous example of American medical innovation. Before 1980, having a blocked artery meant undergoing coronary bypass surgery. Then came angioplasty, which involved inserting a balloon-tipped catheter and inflating it to widen the valve. Angioplasty became the delivery platform for a host of new technologies, and stents emerged as one of the most lucrative.
Boston Scientific went so far as to describe stents as "one of the largest market opportunities in the history of the medical device industry," and the volume of patent litigation is a good proxy for what was at stake. In Boston Scientific's 2010 annual report, the section dealing with patent lawsuits stretches over three pages, dates back to 1998, and includes $2 billion in recent payments to J&J.
J&J introduced the first bare metal stent in 1994. A decade later came the Cypher, the first stent coated with a drug designed to help prevent clotting. J&J even touted its virtues in a 60-second commercial during an NFL football game on Thanksgiving Day.
The Cypher is credited for helping double worldwide stent sales, from $2.2 billion in 2002 to more than $5 billion in 2005. Cypher alone had sales of $2.6 billion in 2006, before falling to about $600 million as Medtronic, Boston Scientific and Abbott Laboratories introduced their own drug-coated stents.
Choice is good, especially when it leads to lower prices. Such was the case with drug-coated stents. Boston Scientific says the average selling price of its drug-coated stents fell 9 percent last year, and a J.P. Morgan Chase study puts the average price for drug-coated stent at under $1,700.
But even as these new drug-coated stents were coming to market, questions were being raised about the effectiveness and overall use of stents in general -- and more costly drug-coated stents in particular.
Generally speaking, most independent studies have concluded that doctors rely too heavily on stents. In some cases, prescription drugs would treat the problems as effectively and more cheaply than stents. In more severe cases, bypass surgery would be a better choice than inserting a stent.
Instances in which drug-coated stents are clearly the superior choice are relatively limited, said Peter Groeneveld, an assistant professor of medicine at the University of Pennsylvania who has studied the cost-effectiveness of stents.
"The problem was that doctors tended to use stents almost all the time," Groeneveld said.
A couple of years ago, Consumer Reports put coronary stents at No. 5 on its list of the 10 most overused tests and treatments.
Last year, the Senate Finance Committee investigated the case of a Maryland doctor who implanted nearly 600 potentially medically unnecessary stents from 2007 through mid-2009. After the hospital barred him from practicing, Senate investigators obtained documents that revealed Abbott Labs had hired him to "promote and prepare safety reports on its stents in China and Japan."
Those studies and investigations have been credited for slowing the number of stent procedures each year. Pricing pressures have helped reduce total sales worldwide to about $5 billion, vs. more than $6 billion in 2006.
Meanwhile, device companies are racing to market with the latest and greatest versions of their stents, even though there's little clinical evidence that they will improve health outcomes in a meaingful way.
"They are not game-changers," Groeneveld said. "As a former engineer, I admire the technical innovation, but as someone who studies health care policy and is worried about the financial stability of Medicare, I know that we can't afford to keep spending billions of dollars on innovations that provide marginal benefits."
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