Comment by MontagFTB
3 years ago
> The medication was given every three weeks for six months and cost about $11,000 per dose.
That’s an $88,000 treatment for the medication alone. Given the apparent success of the drug, is it expected for the price to drop as the volume of patients spike?
Something I saw in drug pricing conferences is that there is a push to price drugs according to how much personal and social benefit they provide and how much a person would be willing to pay to extend their life or resolve a condition. An extreme example for that model, if a drug allow a kid to survive and have a productive life it can be priced millions whereas a palliative drug could be much cheaper.
This has nothing to do with research and cost of development anymore (if it even ever did).
But so two patients in different financial circumstances would both pay basically as much as they are able for a life-saving treatment, arriving at very different amounts, right?
- that sounds a lot like ransom?
- I think if they adopt a policy of price-discrimination to the point of literally taking you for all (or most) of what you're worth (or projected to be worth), we should turn around and apply the same reasoning to corporate tax rates.
I met a researcher once who was doing what appeared to be groundbreaking research on cancer care. He had this beautiful, tear-jerker story about losing his wife that cast a rosy, altruistic hue on his research. When he was asked what the device would cost, he cheerily replied "whatever the market will bear." That's always stuck with me -- the problem with American healthcare is the American interpretation of capitalism. Dude was living off of government research grants.
That's not the problem, that's the reason almost all medical development happens in America.
Rich people from all around the world travel to American hospitals if they have serious health problems, not to public hospitals even in rich countries like Norway. Public healthcare works (poorly) as a way to distribute existing treatment, but is worthless at incentivizing development. Really, the entire world is unfairly parasitizing on Americans to fund medical research.
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> That's always stuck with me -- the problem with American healthcare is the American interpretation of capitalism. Dude was living off of government research grants.
Do the drug companies in Europe do any different though?
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> That's always stuck with me -- the problem with American healthcare is the American interpretation of capitalism.
What should it cost instead?
> Dude was living off of government research grants.
Let's imagine his work comes to fruition. The drug is expensive but efficacious - is this not a good thing? Should the government have not helped fund this drug because now it's expensive?
The alternative is a world without that drug and without as much incentive to produce the drug. I'm not sure that's a good trade.
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This is why although I’ve almost got enough money to retire (~20x yearly expenses) but I’ll keep on working for another decade or two. All of these whiz-bang new treatments are going to be expensive. The most expensive medical procedure right now is a heart transplant at about $1M. Then there’s the $10k/mo for a nursing home
The other thing you can do is setup a trust for yourself so that you're broke on paper long before the trust runs out of money. I don't know if it's ethical but it's legal.
What's unethical is a system that completely drains a person's wealth for getting sick.
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spend a decade of your life to possibly save a few years later? If you are “investing” your time for someone else, perhaps you could just give them your time directly instead?
Is that the real price of a nursing home in the US? Who can afford that?
Yes - that's not unreasonable for a full time care facility for something like dementia or Alzheimer's in the US (it's below what we paid for my grandmothers).
If you're lucky - they have long term care insurance, and that covers most of the expenses for approx 2 to 10 years (depending on how old the insurance is - it's getting harder to find long plans, and they're all getting significantly more expensive as it turns out more folks needed them).
Otherwise... you spend everything, and then your kids pay.
We split my grandmothers down the middle - my mom's had insurance, we covered my dad's.
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You either have enough to pay or you pay until all your assets are exhausted to $0 and then Medicaid takes over.
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It's the type of nursing home. If you are in an "assisted living" home, it is less. As a data point, maybe $5800/mo in CA, which includes food and various social programs.
Yes it sounds crazy but when i was kid i worked as waiter at a nursing home and heard it cost 8k a month. That was nearly 20 years ago.
Pay lots of money to spend more of your life dying
If you need a heart transplant, are you planning to self-pay that?
I have health insurance but I don’t trust some company to not dither when time counts
No, the prices for drugs don't follow the same fundamentals that a normal economic market does.
If you want to learn more about pricing in healthcare the "Pricing, Value, and Ethics" lectures for this course is really interesting.
https://openlearninglibrary.mit.edu/courses/course-v1:MITx+1...
Could you explain that a bit? How does that interact with this?
https://www.fda.gov/about-fda/center-drug-evaluation-and-res...
After you file for a drug patent it takes 3-4 years to get approved. You also have to run clinical trials of various sorts, which take years, and then you need widespread marketing campaigns to ensure that doctors are aware of the new treatment. A rough rule of thumb is that it takes about 10 years from the point of filing the patent before you can actually bring the drug to market.
Drug patents are good for 20 years from the filing date, so you have about 10 years to recoup all of your costs, recoup the necessary fraction of your amortized R&D expenses on drugs that didn't go anywhere, and hopefully turn some profit, before your patent expires and generic manufacturers undercut you.
The result is that cutting edge drugs are extremely expensive for the decade or so after they first become available while the patent holder uses their patent-provided monopoly to set prices at the maximum that insurance companies and government health providers will pay. Your link is discussing the period of time after the patent expires and generic manufacturers get into the game, but the drug being discussed here with its $88,000 treatment cost is still in the patent-protected cost-recouping stage, where it's not subject to normal market principles of supply and demand because the supply side is a temporary monopoly.
dodobirdlord's explanation is solid. Basically your link describes "generic" versions of a drug (aka a "brand" drug) with an expired patent. For new drugs they don't have competition like a normal market does because of these patents. To give a summary of the section of the course I linked the market forces for "brand" drugs is the willingness for payers (insurance companies/ governments) to pay.
Chemotherapy for 3-4 months is around $200,000 - $400,000.
You will not see a price reduction, if it doesn't require chemotherapy or significantly reduces the number of rounds of chemotherapy, this drug will cost $150k+ for full treatment.
All of this assumes side effects are better than chemotherapy. Given chemotherapy care plans are some of the most arduous, it will be hard to be worse than chemo.
> Chemotherapy for 3-4 months is around $200,000 - $400,000.
Is that the american price or the "other developed countries" price?
Price is only slightly related to production costs. It’s much more about all the work that goes into getting something like this from basic science to trials to approval (and all the other drugs that fail along the way).
In the current model, pharma only stays in business by recouping all of the during the patent protected period of any drug that makes it to market.
Generally drugs that cure a condition cost MORE than the pre-existing treatments while under patent protection with no viable competitors. There’s only one source and you’d rather cure the disease with a pill so you’ll pay more.
Market dynamics don’t come into play when there’s only one. If competitors appear or after patents expire it may get cheap, but the cost early on will have no relation at all to production costs.
It's cheaper than other chemos..my mom has breast cancer and her chemo according to insurance cost 65k per infusion every 3 weeks.
That's *insane*. Here in Scotland each dose costs the NHS at most a couple of hundred quid, plus about that again to administer. None of that is paid by the patient.
It is crazy what the incentives do in the US.
It is a bit like car insurance here, which keeps rising because insurance companies keep edging the cost of a claim upwards (courtesy cars at extortionate rates, repair, ...) because there's no insentive to keep costs down or not profiteer.
With the NHS's buying power for drugs, they can get a little bit nearer a sensible margin from the supplier rather than the insane US costs underwritten by inflationary insurance.
I would actually expect the opposite. If the drug is approved then the price would go up several times.
Probably not. That's an average-to-low price for a monoclonal antibody in the US, and many people with chronic (non-cancer) conditions pay that price every few weeks to remain healthy under something like a health-as-a-subscription model.
This price won't drop, it isn't common enough and still in clinical trials.