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Data Science For Cheaper Medicines

Sundeep Pattem, a 2010 USC Viterbi Ph.D. graduate, conducts data analysis to find ways in which to improve the American healthcare system.
By: Natalia Velez
November 23, 2015 —

Sundeep Pattem conducts data analysis to find ways to improve the American healthcare system.
(Illustration: Suha Park)
How many brand-name psychotherapeutic drugs are being prescribed in the U.S versus their generic forms? Data analysis could play an important role in answering this and other questions that could help policy makers improve the American healthcare system.

USC Viterbi alumnus Sundeep Pattem has taken an initial step in this direction by studying publicly available healthcare data to determine where there are opportunities for the government to reduce costs. His latest research looks specifically at Medicare’s drug prescription data for 2013, which, he said, accounted for $103 billion.

By studying how many times a drug was prescribed, how much each prescription costs and considering state-wise comparisons by drug class and generic versus brand-name prescription rates, Pattem was able to detect several illuminating trends in the data and possible causes for rising costs.

“Currently, America’s yearly healthcare costs are about 17 percent of GDP,” Pattem said. “It is also well known that there are many areas of health care where money is being spent inefficiently. ”

According to the study, several opportunities exist for saving money without compromising healthcare quality. One of them is to prevent over prescription of expensive brandname drugs when equivalent and cheaper generics are available. According to Pattem’s research, these tendencies vary by state and drug class.

In addition, just as in every other field, peer influences are very powerful and they play an important role in medical prescription practices. Physicians very likely prescribe the same drugs as their colleagues. Pattem recommends a nuanced approach to physician awareness and policymaking that can take advantage of these findings.

“If we showed physicians in New Jersey and Hawaii that, as a group, they prescribe brand-name central nervous system agents at a rate 2.5 times greater than in Washington and Oregon, they would have to think about it differently,” Pattem said. “If physicians in West Virginia knew that they have the highest rates of brand-name prescriptions for metabolic drugs, but the lowest for psychotherapeutic drugs, how would they respond?”

Finally, companies market their branded versions of drugs as being new and different. These products are usually more expensive than their generic equivalents, even when they are just as effective. This has a direct effect on what is known as ‘patient-driven demand.’ When people are exposed to drug ads that refer to the condition they have, they are influenced by the company’s marketing efforts and will be more likely to ask their doctors to prescribe them that exact brand name.

“Generally, people tend to believe that expensive versions of drugs are more effective than cheaper ones,” Pattem said . “Marketing is really successful in getting that message across.”

For this reason, Pattem believes that regulations on the kind of advertising permitted and the claims made about the effectiveness of drugs must be considered. In addition, the training that physicians receive should include ways to effectively deal with such demands from patients.

In September of this year, Pattem presented his work at the Data for Good Exchange conference, a venue that connects data scientists with the public sector so that they can see the benefits of applied data science. Currently, he is a fellow with the California Department of Justice, working on the Open Justice platform and other innovative uses of big data to improve law enforcement.

“I am really delighted to see Sundeep apply his Ph.D. training to do data analytics for a socially important cause,” said Bhaskar Krishnamachari, a USC Viterbi associate professor who advised Pattem during his doctoral studies. “I hope policymakers take notice of his striking findings that indicate that significant cost savings are possible in public healthcare.”