Tuesday, January 24, 2012

The Over-the-Top Prices for Cancer Drugs

Our pal Merrill Goozner of GoozNews blog just posted this article in the Fiscal Times:

Gooz goes into the current problems caused by the high cost of new cancer drugs, relating facts such as:

  • 84% of oncologists report that treatment recommmendations are modified due to the patient's out-of-pocket costs

  • Despite decreasing incidence of cancer, the National Cancer Institute projects a 27% rise in the cost of treating the 29 most common cancers by 2020
Typical price tags:

  • Johnson & Johnson's Zytiga extends life in advanced prostate cancer by 5-16 months, costing $44,000 per year

  • Bristol-Myers Squibb's Yervoy improves 1-year survival rate in metastatic melanoma from 25% to 46%, costing $120,000 for a 4-month treatment course
Gooz notes that neither the Republican nor the Democratic proposals for health care system changes address in any serious way what to do about this problem.

Back in HOOKED, I discussed the high price of some cancer drugs, noting that these prices were determined by one factor only--what the company figures it can squeeze out of the market. The price has nothing to do with either manufacturing costs or research costs--in this area, the bulk of the research on breakthrough molecules continues to be done in academic and not industry labs.

Until now, the industry has figured that a patient with advanced cancer would pay any amount for even a few more months of life, especially if newer drugs, as many promise, are much less burdened with side effects than old-style chemotherapy. Gooz's account shows that even if the patient has good insurance, the out-of-pocket copays may be so high that the patient and family decide that it's just not worth it. So as much as people want to sound off about "government death panels," here we have rationing of cancer care based on the private marketplace.

You could make the claim that when a new cancer drug might extend life by only a few months, and a patient decides they'd rather leave that much money to their grandkids rather than buy the medicine, it's a perfectly rational choice, and a good system that allows it to be made. I worry however that when the drug offers more substantial benefits than that, it seems less fair that the luck of the draw that is today's health insurance system might determine whether the drug is affordable. On the other hand, I have steadfastly proclaimed in this blog that there's no good, solid "ethical" answer to how much drugs should cost.

One point to note in pasing that as Gooz interviewed industry experts about why these drugs cost so much, one answer that came back is that the companies are trying to recoup their losses from so many blockbuster drugs like Lipitor all going off patent at about the same time, and that if you want to get this money back from cancer patients (there are reportedly about 887 new cancer drugs in some state of development), then you have to get as much of it as you can up front, because unlike patients taking Lipitor, these folks won't be around for that long. So the longer-term solution is likely to be refining the drugs and identifying the really promising compounds that truly keep these patients alive for a long time.

1 comment:

Alternative cancer treatment said...

I always say that cancer is a disease for rich people. Due to the high priced type of medicines that doctors are giving, I think cancer patients should also start believing to alternative cancer treatments. This is just my own point of view and I think it is effective and healthy.