A reader quotes me reacting to Huyler:
“Blood money?” “Evil act?” I have to say I find that rhetoric appalling.
Wow, Andrew, you really started to move to the right lately. So you think $1,000 versus $10 is not blood money? Basically what you are saying is that it is OK for US to finance this whole drug business because based on all recently published facts we pay the most, double in most cases, than the rest of the world. So we are financing this with huge deficits and 30M+ uninsured who cannot get any of these life-saving drugs. And to you it just requires re-balancing? These prices make no sense.
And many drugs are not invented in the US by “starving” PhDs and CEOs; many come from Europe, and they still cost a whole lot more here. This is not about re-balancing. This is about our healthcare system that stinks and makes no sense. And you seem to defend it.
I wrote back: “I’ve always had this position. I’d be dead without the evil drug companies.” The reader follows up:
I certainly can appreciate the struggle you have been dealing with. I myself suffer from multiple sclerosis, and while MS is not as deadly as HIV, I have been taking three big drugs over the last 12 years and all of them cost at least $25K a year.
And then I look at prices in Europe, and they are half that. And two out of three came from Europe. This is why I strongly believe our healthcare system finances the world and CEOs bonuses, which are not that small. We are the only ones who continue to pay astronomical prices.
Are the companies evil? I did not say it. But what they do to the USA is evil. We basically have Medicare for the rest of the world and pay for the difference. And everyone but regular citizens make money. In return we get high insurance premiums. There is absolutely no relationship between prices here and Europe.
Another reader, who “works in consulting in health economic modeling,” also goes back and forth with me:
You say that Dr. Huyler’s outrage at the $1,000 a day pricetag is unjustified and that this revenue supplies future drug development. While I have mixed feelings on this argument (pharma companies throw out this response every time, I don’t know whether I believe it anymore), I have another question for you: what is a fair price? It’s currently $1,000 a day; what about $2,000? $10,000?
You get my point. Assigning a “fair price” requires assessing the value of the product, which I don’t see in these articles. And I believe this is something the UK health system gets right; the National Institute for Health and Care Excellence (NICE) performs reviews of pharmaceuticals and their potential value. The panels of experts review the data, including how cost-effective the drug is, and arrive at a decision whether to recommend the drug. The FDA, on the other hand, only considers whether the drug is effective.
And how innovative is Britain’s drug sector? The engine for innovation is in the US private sector. The reader responds to those points:
Are these companies located solely in the US? No, they’re all multi-national. Yes, the original research to find it was done in the US (New Jersey, I believe), but how much of these profits go back to that specific step of the drug development process?
You also avoided the key question: why is it $1,000/day, other than “because they can charge that”? Without digging too deeply, it looks like California did something along those lines (pdf):
For many comparisons with the previous standard of care, we estimate that the incremental cost required to achieve one additional SVR [Sustained virologic response] with newer treatment regimens is greater than $300,000. While the cost per additional SVR” is not a common measure of cost‐effectiveness in the literature, the costs per SVR generated in this analysis are generally higher than those previously published for telaprevir versus PR ($189,000),118 alternative regimens of PR versus standard PR therapy ($17,000‐$24,000),119 and even highly active antiretroviral therapy in HIV patients ($1,000‐$79,000)
Another quotes me:
“But the trade-off is that the innovation that occurs outside the NIH – and the bulk of all drug research is done by the pharmaceutical industry – would inevitably suffer.” You are repeating “factoids” that you have apparently encountered somewhere – factoids that are dead wrong. I’m in the drug industry, so don’t dismiss me as a crank.
The reality is that much of the seminal work that leads to breakthrough drugs is not done by the drug industry but rather research supported by NIH. Just one example that is especially relevant to you – AIDS drugs. The fundamental work that resulted in the discovery of these drugs and their eventual development by companies such as Merck and Abbott was actually funded by the NIH. Where the US government screwed up was giving sweetheart deals so that drug companies that ended up doing the clinical development that resulted in a successful filing to the FDA. The US taxpayer should have gotten more in return.
Yes, the fundamental basic research was done by the NIH. But you think we’d have the variety and sophistication and constantly innovating treatments without the private sector’s profit incentive? Another combines two threads:
In this post, you say, “But the trade-off is that the innovation that occurs outside the NIH – and the bulk of all drug research is done by the pharmaceutical industry – would inevitably suffer.” But in a post also published that morning, you quote Madrick as saying:
Similarly, [economist Robert] Gordon called the National Institutes of Health a useful government ‘backstop’ to the apparently far more important work done by pharmaceutical companies. But Mazzucato cites research to show that the NIH was responsible for some 75 percent of the major original breakthroughs known as new molecular entities between 1993 and 2004.
So which is it? I warrant that NIH does little drug development work, which is quite expensive, but in terms of basic research and background work, NIH does the lion’s share (and removes a lot of the risk) for Pharma … and then government foots the bill for the massive costs of new pharmaceuticals.
Again: major original breakthroughs do not equal specific treatments for specific drugs through clinical trials to FDA approval. Both the NIH and the US private sector matter. Another adds:
The public interest doesn’t end with NIH’s basic research. Pharma ends up wasting R&D talent and money on heartburn or hair-loss that could otherwise go to cancer or diabetes research. If the US took the social good into account when negotiating a fair margin, we could use our considerable market clout to incentivize companies to produce far more cures for diseases like Hep C, and less in the way of new-and-improved Viagra, or some twisted-molecule version of Lipitor that has virtually the same clinical outcomes.
I think expecting the market to do all of this is as foolish as expecting the government to distort the market and get better results. I know I have a bias here, but it is the bias of someone with a major health challenge. This system has performed miracles in a manner not seen elsewhere in the developed world. I don’t want to change it much.
The Dish 