Barry Werth's fine report in Technology Review describes not just the astonishing prices that new drugs can command, but explains how and when the high prices are justified - or not.
Kalydeco is the first effective treatment for symptoms of cystic fibrosis and is priced at $294,000/yr. Despite the massive cost, Kalydeco is being accepted by doctors and insurers because it really helps patients, and, perhaps, because only 2400 patients qualify for treatment.
Zaltrap is a me-too drug for treating metastatic colorectal cancer. It was priced at about $100,000 for a course of treatment - definitely on the high end for new cancer drugs, but not that different from Avastin.
For that kind of money, you'd expect pretty good performance. But Avastin and Zaltrap only increases survival for 6 weeks over standard chemotherapy, which is why Avastin has been rejected repeatedly for use in the UK for failing to meet the test of cost-effectiveness.
Despite its high cost and marginal performance, Avastin racked up nearly $6B in sales last year. That's because in the US, Medicare and Medicaid are required to pay for all FDA-cleared treatments. The FDA only considers safety and effectiveness, and gives no consideration as to whether a new drug provides a meaningful benefit over existing drugs.
FDA clearance is thus effectively a hunting license, allowing marketing departments to create a demand that overwhelms any objections based on cost. And when it comes to cancer, our willingness to pay has been unbounded. Paying $50-100K for an advanced chemotherapy regimen that extends survival by a couple of months is completely normal.
For antibiotics the economics are much different. Consider fidaxomicin, recently approved for treatment of C. difficile associated diarrhea. CDAD kills 14,000 Americans every year - not as many as colorectal cancer (50,000/year) - but no small number. Existing antibiotics, such as vancomycin, have a good global cure rate of some 66%, and fidaxomicin improves this to about 76%.
The cost? Vancomycin treatment is typically about $1200, and fidaxomicin raises this to $2800. In other words, for the cost of two weeks of cancer chemotherapy treatment you can get an antibiotic that will cure you of CDAD 75% of the time. And presumably not die.
The costs to develop a cancer chemo therapeutic are not markedly less than to develop an antibiotic. So is it any wonder that the cancer pipeline is full of drugs with marginal additional effectiveness? If you were the CEO of a pharma company, would you put your resources into developing a drug that you can charge $100K for, or one that you can only get $2500 for?
Antibiotics are simply too cheap for our own good.
Posted with Blogsy