The quest for saving money ran into a blockade:
A group of cancer doctors focused on bringing down the cost of treatments by testing whether lower — and cheaper — doses are effective thought they had found a prime candidate in a blood cancer drug called Imbruvica that typically costs $148,000 a year.
The science behind Imbruvica suggested that it could work at lower doses, and early clinical evidence indicated that patients with chronic lymphocytic leukemia might do just as well on one or two pills a day after completing an initial round of treatment at three pills per day.
The researchers at the Value in Cancer Care Consortium, a nonprofit focused on cutting treatment costs for some of the most expensive drugs, set out to test whether the lower dose was just as effective — and could save patients money.
Then they learned of a new pricing strategy by Janssen and Pharmacyclics, the companies that sell Imbruvica through a partnership. Within the next three months, the companies will stop making the original 140-milligram capsule, a spokeswoman confirmed. They will instead offer tablets in four strengths — each of which has the same flat price of about $400, or triple the original cost of the pill. [WaPo]
Naturally, the researchers were outraged. Kevin Drum thinks it’s unwarranted:
I can’t believe I’m defending a pharmaceutical company, but what did these oncologists expect? Everyone knows that the price of drugs like Imbruvica doesn’t depend on the cost of actually manufacturing the stuff. Whether it costs a penny a pill or $100 a pill is irrelevant. These drugs are priced to recover their R&D costs based on the number of patients who are likely to use them. If the number of pills required was any kind of factor at all, they’d manufacture them in 10-milligram sizes and make people buy 14 or 28 of them.
First, let’s note that Kevin is mis-characterizing the purpose of general pharma pricing. The purpose is to recover the R&D costs on both successful and unsuccessful drugs, and to make a profit – generally a big profit. (They also hope for lucrative “off-label” applications as well, but that’s another story.)
It’s a fascinating question, though. We’re accustomed to considering the physical properties of a tangible product to define the price of that product, but in this case it’s nearly all about the intellectual effort that went into the R&D process. And, if the pharma company was being completely honest and not just jerking these scientists around, it wouldn’t be using the price-per-pill model at all. That pricing scheme is an example of the rapidly-becoming-discredited medical services for a fee model in which medical supplies, procedures, professionals, and, most importantly, corporate entities are disconnected from the primary purpose of medicine: to correct defects in the human body[1].
I would like to see the pharma companies cease dispensing their illness solutions in separate pills, priced-per, and instead put a price on the entire treatment, regardless of the actual number of pills involved. I recognize that this doesn’t fit perfectly, since many severe illnesses, by definition, are not yet resolvable, so you’d have to label the ‘solution’ as something else reflecting the true purpose of the treatment, whether it’s pain alleviation or life lengthening. But you get the point.
And there should be some sort of consequence if the treatment doesn’t work. Boy, the devil would live in those details, wouldn’t it?
1Yeah, we could have a marvelous argument over that as well. Just think of the controversy within the deaf community over restoration of hearing. Or the requests from high functioning autistic folks that they be labeled neuro-atypical, vs the rest of us neurotypical sorts. It’s not a cut and dried topic.
