Cancer Drugs: Value for the Money?. In the Pipeline:

And while we're talking oncology, here's a piece from Luke Timmerman at Xconomy that brings up a lot of tough questions. We've talked about some of these before around here, but everyone who works in oncology drug discovery is going to hear them again: How much should a new cancer therapy cost? Who's going to pay for it? Are patients (and their insurance companies) getting value for their money?

I wouldn?t go so far as to say we need a draconian system to discourage drug developers from creating new products. Drug prices are rising fast, but there are a lot of other factors contributing to increased healthcare spending. Drug companies can, and should, be able to recoup the investments they make in the form of high drug prices. But if you?re going to charge a high price for a drug, I think a company needs to have a much stronger value proposition than ?Hey, we shrank tumors in half for 20 percent of patients. Now hand over your $100,000.? It needs to be more like, ?Hey, my drug has an 80 percent chance of helping people with this genetic profile, and those people can expect to live an extra year, with high quality of life.? Now you?re starting to really talk about $100,000 of value.

Sadly, drug companies tend to be more interested in satisfying the short-term profit desires of their investors than they are in truly delivering cost-effective care to patients. . .

Well, it's like this: we realize that people want inexpensive drugs that work great. But we have an awful time delivering anything like that. As I've said before here, we keep swinging for those fences and missing. That's why these drugs come out, the ones that only extend life span for a limited amount of time: every one of those are drugs that people had higher hopes for, but that's how they performed in the real world, so out they come onto the market to do as best they can. And if they're only going into a small patient population, then the pricing gets set accordingly.

So we have two trend lines that are trying to intersect: the amount of money one can hope to recoup from a new cancer medication, and the amount of money that it takes to find one. They haven't quite crossed, not yet, but they're on course to. If it were less costly to develop these things, or if they delivered more value in the end, we could push them back apart. Will either of those be realized in time to help?

Source: http://pipeline.corante.com/archives/2012/07/30/cancer_drugs_value_for_the_money.php

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