As large, complex and difficult to manage as our health care system has become, it reflects our national values, explains Scott Friedman, a Buffalo-based lawyer who specializes in helping businesses – many of them health-related – operate more efficiently.
“It’s a complicated system, and it’s trying to strike a balance between what’s reasonable and realistic, and who pays for expensive treatments,” said Friedman, chairman and CEO of Lippes Mathias Wexler Friedman.
From the firm’s offices – perched on the 16th and 17th floors of Fountain Plaza, overlooking the Buffalo Niagara Medical Campus – Friedman represents companies that range from startups to multibillion-dollar outfits, including a host of family-owned businesses eager to nurture and pass along their good fortunes to loved ones.
His clients include Roswell Park Cancer Institute doctors at work on a promising cancer vaccine, as well a medical device company looking to prevent blood clots.
Friedman, 58, a Williamsville native, holds law degrees from Washington University in St. Louis and the University of Pennsylvania in Philadelphia. He was working in a large Philly firm in 1985 when his father, Dr. Irwin Friedman, learned from four of his primary care patients that their granddaughter, Lisa Pastor, also from Williamsville, was at nursing school in the City of Brotherly Love. A date was arranged. “Eight weeks later, we were engaged,” Friedman said. “We were married four months later.” He and his wife have four adult daughters, Samantha Olsen, Eliza, Julia Jensen and Madeline.
Q. Why are medical devices and pharmaceuticals so expensive?
Part of the answer is that it’s expensive to get these devices and pharmaceuticals approved by the FDA. The typical new pharmaceutical, to get cleared to go on the market, costs tens of millions of dollars. There’s millions of dollars often spent on testing a new drug in the laboratory and then maybe in animals, then doing all sorts of experiments to make sure the new pharmaceutical is working and is safe. The FDA has a staged approach to making sure that a new technology or new pharmaceutical actually works in a safe way and improves health care. There are a variety of different processes to get a new device or drug approved but It’s often the case that it has to go through three different phases. Each phase has risks to a company that it won’t move forward. A lot of new drugs just don’t work or they turn out to work but not materially better than what’s on the market, or they prove to be unsafe or there are complications. So the process to go from phase to phase to phase is increasingly risky and increasingly expensive. The FDA wants large patient populations. If there’s a new drug that cures cancer in one patient, that doesn’t mean in the next 99 patients it’s going to have the same result, so there’s a focus on validity and efficacy. It’s a huge investment and the companies need to pay for the investment.
That’s one answer. The second answer is that the economics between third-party payers, the insurance companies, the providers, the hospital systems, the patients, the pharmaceutical companies is complicated. It’s a business, and sometimes it’s a question of negotiating leverage and competition in the marketplace. Sometimes parties try to extract the most value they can in a capitalist economy.
Q. Why do Americans pay considerably more for some medications than people in Canada and other parts of the world?
Because other parts of the world are socialistic. Some countries, like Denmark and Scandinavian countries, do provide for robust and free health care and free education but there’s a trade-off with an economy that runs like that as opposed to the United States economy, which is free market and entrepreneurial. It’s capitalism.
Q. So countries that run like ours develop most of the medical devices and new drugs, right?
Absolutely. We have a culture of innovation that is fueled by a capitalistic spirit and the free market.
Next week in Refresh: Scott Friedman talks about healthy workplace practices for long-term success.
Q. And what you’re saying is that people who are taking medications here are investing in the overall health of those across the globe.
Absolutely. There are new initiatives out of Roswell Park Cancer Institute and the University at Buffalo, where they’re taking new devices and new pharmaceuticals and translating them to places around the world. Roswell has a place in Lagos, Nigeria. People come to Buffalo to be trained by neurosurgeons at Gates Vascular Center. We pioneered endovascular neurosurgery here in Buffalo with Dr. Nick Hopkins and his team. We really do have a lot of innovation here in Buffalo and Western New York and it’s an exciting time to be living and working here.
Q. Americans spend the most per capita of any country for health care, roughly $3,000 more than the second highest spending nation, Norway. Why? We don’t necessarily have the best outcomes here.
I’m not necessarily an expert on this subject but for what it’s worth I’ll offer my perspective. We place a premium on going the extra mile for our sick. If it means we’re going to spend an extra $100,000 to give someone an opportunity to make it through a difficult illness or disease then it tends to be our country’s culture to spend that money, as opposed to making an economic decision. ... It’s a philosophical, social, business calculus around money versus quantity and quality of life. In this country, I believe we focus on quantity and quality of life more than the dollars and cents.
There’s a market out there that involves a lot of different participants and as a country we try to continue to thoughtfully reconcile differing interests. A lot of efforts on health care reform are designed to smartly, thoughtfully, humanely reconcile those differing interests. I think most people have good intentions and I think people and organizations want to be helpful. It’s just complicated.
Q. What changes do you expect to see in the next decade on the medical campus?
Since I grew up in Buffalo and came back in 1986, in 2016 there’s never been a more exciting time to live in Buffalo. I don’t know that I often look decades out but if I were allow myself to do that, I would see great centers of teaching, great centers of health care – Roswell Park, Buffalo General, Children’s Hospital – and I would see these startups moving from nascent ideas and concepts on a white board to bricks-and-mortar businesses that generate great jobs and continue reasons to invest in Buffalo and for other companies to come to Buffalo, and more people to relocate, work and live here.
Q. Any medical device or medication breakthroughs you expect to come out of Buffalo in the foreseeable future?
One of the most exciting opportunities is a new cancer vaccine that was invented by Dr. Robert Fenstermaker, the chief of neurosurgery at Roswell Park, and Dr. Mike Ciesielski. Mike and Robert patented a cancer vaccine and I helped the two of them form a company called Mimivax LLC that licensed the vaccine out of Roswell Park. Their cancer vaccine is now being used in a very deadly form of cancer, glioblastoma, a brain cancer. They had great results preclinical and in a phase one clinical trial. They have two individuals who show no evidence of cancer at this point. The company is continuing to advance and is in a phase two clinical trial that is being completed at Roswell and the Cleveland Clinic and Dana-Farber Cancer Institute in Boston. It’s a vaccine that could potentially be used not just in glioblastoma but in lung cancer, prostate cancer, ovarian cancer and multiple myeloma. The potential addressable market is $5 to $10 billion. Given the success of the clinical results to date, it’s going to be interesting to see where that goes. (Johns Hopkins Kimmel Comprehensive Cancer Center and Duke University Medical Center are in similar trials.)
Read a National Cancer Institute update on glioblastoma immunotherapy here
There’s another company on the medical device side, StimMed LLC. It turns out one of the major health issues in the world today is blood clotting. More people die of pulmonary embolisms than car crashes every year. I’ve been working with Dr. Jim Czyrny and Dr. Robert Kaplan, who patented a device called the StimSock, which is an electrical stimulator. The patent is using electrical stimulation on the bottom of the foot that with just a minimal amount of stimulation causes the toes to twist. The twitching of the toes enhances the body’s natural physiology and promotes blood flow. The FDA in April cleared the device to be sold for the purpose of enhancing blood flow in the legs of healthy patients.
We’re moving forward with commercialization of the StimSock here in Buffalo. We think it will be available in early 2017.
Twitter: @BNrefresh, ScottBScanlon