ASCO to address costs of new drugs at annual meeting

The increasing costs associated with new drugs for the treatment of cancer is going to be a key item on the agenda at the annual meeting of the American Society for Clinical Oncology that opens in Chicago today.

Some readers may be interested in commentary on this topic on the Bloomberg web site today — even though it isn’t prostate cancer specific. Presenters at the ASCO meeting who  review clinical results for certain studies have been told to examine the value of the treatments as well. Additionally, education sessions focusing on value will look at the cost issue from the perspective of patients, insurers, the drug industry and other countries with more cost constraints.

This is a complex and difficult subject for us to deal with as a society. The US biopharmaceutical industry has long been one of the most prolific and profitable of the scientific industries that developed in the early to mid-20th Century. It has given us a vast range of new drugs over the past 100 years that can effectively treat everything from a runny nose to testicular cancer, but there are very real questions today about the cost-effectiveness of new drugs that only add months of life for some people who take them, and whether we can afford the costs that we are being asked to pay for such agents.

The “New” Prostate Cancer InfoLink is pleased to see ASCO start to take on this difficult challenge … but we aren’t expecting easy answes to a very complex set of problems.

5 Responses

  1. The topic of high drug costs has been very much in the news lately. One thing to keep in mind is that the health insurance industry has launched a full court media blitz on this through their industry trade group called America’s Health Insurance Plans or AHIP.

    The health insurance industry is very, very disingenuous on this topic. I have owned a number of health insurance stocks over the last 10 years (such as United Health and WellPoint). These companies have been incredibly profitable. For example, since 2002, United Health has risen in value 454%. The average large American company (as represented by the S&P 500) has risen in value about 172%. So, profits for large health insurers have risen about three times as fast as the average large company. And this is in spite of the rapidly rising price of medical goods and services. Normally, when the price of a company’s inputs are quickly rising, profits are squeezed because it is difficult to pass all these costs along to the customers. But somehow, insurance companies have been able to actually increase profits quarter after quarter. Of course they have done this by rapidly raising premiums while finding ways to limit coverage. Most good insurance policies carry a maximum out-of-pocket annual limit. That used to mean that once you had paid out that amount, everything was covered 100%. Thus providing real protection against catastrophic cost. These insurers have found ways around this (such as that mentioned in the referenced article, where co-pays aren’t subject to the maximum out of pocket). The insurance industry is interested in one thing, which is their bottom line. Take a look at their website, under the issues and advocacy tabs. They have initiated hundreds of articles and news stories bemoaning the cost of drugs and the effects on the public, Medicaid, Medicare, the federal debt, and on and on. Never a mention of the real concern of the industry trade group: insurance company profits.

    I’m not saying there aren’t issues here that need to be looked at in a thoughtful way. But, as far as the discussion taking placed in the media, it is heavily tainted by industry lobby groups posing as concerned citizens.

    (I own stock in some of these insurers because they are very profitable. But I don’t like these guys at all … as you may be able to discern. I’m actually considering putting them on the very short list of industries I won’t touch such as tobacco companies and payday lenders.)

  2. Dear Doug:

    Ah the joys of for-profit health-care systems.


    It’s not just new drugs that are expensive. The 28-day prescriptions I used to get for the specialty drug thalidomide cost my insurer several thousand dollars each month as recently as the past few years. I’m thinking that drug has been around since the 50s when it caused all those birth defects in the UK, Canada and Europe, and at that time it was being marketed as a sleep aid. I kind of doubt it cost thousands for a 28-day supply for that purpose. I’m suspecting it costs just pennies to make. Granted, the special controls now needed to prevent birth defects add some cost, and perhaps the heavy litigation from long ago may still add cost, but I’m really curious.

  4. Jim:

    Some years ago the manufacturer of thalidomide here in the USA (Celgene) was very public about the fact that the company was raising the price of thalidomide over time as a business strategy to help underwrite the research needed to bring second- and third-generation products like lenalidomide (Revlimid) and pomalidomide to market. The ethics and morality of such business strategies are open to discussion, but no one can criticize Celgene for not having been transparent about why they did this over time. Their then-CEO gave a long interview about this to the Wall Street Journal.

    Many other companies have done the same thing over time (e.g., Novartis in the marketing of Gleevec).

  5. In a press release today, United Health announced they are raising their dividend by 34% and repurchasing about 10% of their outstanding shares for $8 billion. No mention in the press release that they are struggling to afford to pay for drugs for the company’s paying customers.

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