Healthcare Regulation

A year ago I went to the angel venture forum in Washington, D.C. Startups pitched their companies to investors. There were two rooms, one for Biotech/Life Sciences companies and one for everyone else. I sat in on a few of the pitches from the biotech/life sciences guys. Several of them spoke about current regulation in the healthcare industry, but more importantly the coming regulation in the industry. This regulation provides opportunity to get a slice of the pie. For example, one startup specialized in electronic documents for specific category of wounds. Very niche, but the ability to obtain large contracts. The reason they were pursuing this venture, was because by 2014 all hospitals were be required to keep certain patients documents exclusively in electronic format.

I also watched Peter Thiel say, "given current FDA regulations, the cure for Polio would not pass if it were being introduced today." Slightly paraphrased quote. He also noted that many of the profits from BigPharma come from a handful of medicines. New breakthrough and medicines are hard to introduce to the public. They have to go through multiple clinical trials/human testing. Of course, this is regulated because it involves life and health. This made me think, are we over regulated? Is regulation an opportunity or a hinderance on society?

I really don't know the answer but I did do some research on the healthcare industry and the regulations it abides by.

Our present regulatory structure is not uniform or consistent. Regulations are developed and enforced by the federal, state and local governments as well as private organizations. Usually, they are not coordinated, many healthcare professionals feel that they spend more time with compliance rather than their work.

To understand how complex it can get, lets look at an example, marketing a new drug. The first step is, pharmaceutical companies must obtain a patent from the Patent and Trademark Office. Then it must receive permission from the FDA to perform clinical trials. After the trials, an advisory committee of scientists review the results. Permission to market the drug is granted by a New Drug Approval (NDA), which the company must abide by its restrictions. The manufacturer of the drug needs to get a PBM (Private Pharmacy Benefit Management Company) to administer reimbursement plans for selling the drug. The drug cannot be sold still, unless it is prescribed by a physician and distributed by a licensed pharmacy, both of which are influenced by many more regulations. As you can see, it is complicated and requires lots of time (years).

Think for yourself: What are the regulations that need to be overcome by those who want to practice medicine? (School, exams, residencies, programs, etc.)

Does regulation make our healthcare system inefficient and limit progress? Or does it support and drive progress? I think these are important questions to think about.