Are you paying more for effective drugs and less for less effective drugs? Probably not…
It seems the discussion surrounding cancer drug costs is
never ending and never changing. Patients and doctors complain, articles are
written, and drug prices continue to go up—rapidly.
Peter B.
Bach, a Director at Memorial Sloan Kettering Cancer Center, recently
published an article in the Harvard
Business Review proposing a new way to define drug pricing. We suggest you
read the whole article.
In a nutshell, Dr. Bach proposes that patients and insurance
companies pay for drugs based on how well they actually work (better quality of
life, modest side effects, and longer lifespan). More effective drugs would
continue to demand high costs and less effective drugs would cost less. Sounds
reasonable doesn’t it?
This, of course, is easier said than done. It costs drug
companies just as much to develop a drug whether or not it is effective or even
if it duplicates what another drug does.
Many cancer drugs now retail for $100,000 a year or much
more. The prices are going up every year whether that drug is working for you
or not. So it seems logical not to pay incredibly high prices for a drug that
does little to keep you alive or symptom free.
Some drugs work better for some people than others. How do
you price those drugs? Who decides how ‘effective’ a drug is? Should it be the
patient, doctor, or drug company? What if you take two or three drugs? How do
you determine which is most effective or least effective? How do you measure
the impact of drug side effects? There are many questions to answer before
something like this could ever happen. And drug companies are still free to
charge whatever they decide will be accepted by the market.
This is something to think about. It may be just fantasy. Watch
for future research and articles about “paying for value.”
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To put a smile on your face see Larry's latest cartoon.
To learn more about clinical trials, take a look at our book.
(c) 2012 Tom Beer and Larry Axmaker
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