Inside medicine : High drug costs

02/28/2013 12:00 AM

02/27/2013 1:07 PM

We have a problem that no one seems willing to discuss. The costs of medications are going through the roof.

Take for example cancer medicines. Let's say we want to treat metastatic melanoma – a skin cancer.

The cost of medication alone is $120,000 for four treatments, which might extend life a few months. We're at the point where the majority of new cancer drugs cost at least $20,000 for a 12-week course, and often people need multiple courses and multiple drugs.

Because most metastatic cancers are incurable, people rarely use just one or even the best drug, as they might with an infection. They typically cycle through all available drugs until they reach the end of their lives. So, unlike with antibiotics or antidepressants, there is no competition among manufacturers – everyone's drug will eventually be used. These expensive treatments lead to personal bankruptcies and rapidly rising health care costs.

Why are drug prices so high? Not surprisingly, there are two sides of the issue. The pharmaceutical industry claims drug development, manufacturing and research costs are what lead to sky-high prices. Cancer drugs do cost more to bring to market, but their profits are much greater, and the government provides drug companies with large incentives to make cancer treatments highly profitable.

The other side points out that cancer drug makers have a monopoly on treatments, that company profits are sky-high, and that doctors gravitate toward prescribing expensive newer drugs even though these drugs often have few advantages over older, more established drugs.

There is also concern that in approving new drugs, the FDA does not consider or evaluate what is called "cost-effectiveness" – that is, is the high price of a drug worth its cost?

How much are we willing to pay for an extra month or two of life (which is often the benefit of newer drugs compared with older ones)? I don't have an answer, but we clearly need to have these discussions. Who should decide what a month is worth? Should it be the doctors? Insurers? Patients? If patients, then should everyone get any treatment they desire regardless of the cost or the proven effectiveness?

There is one other policy that drives up medication costs. Despite the fact that the federal government pays for nearly half of all health care, Congress, pushed by a powerful pharmaceutical lobby, has prohibited the government from engaging in competitive price negotiations with manufacturers to get the lowest drug prices.

If the government wants to purchase toilet seats, pens or cars, they require a bidding process to let the marketplace control costs. This is not allowed to happen with drugs. Bidding for drugs saves private American insurance companies and foreign countries billions, but our federal government is forbidden from bidding. Nearly every other Western nation allows its government to engage in competitive bidding – perhaps this is a major reason why the United States has the highest drug prices in the world – even for drugs that were developed and manufactured right here in the U.S.

There are many examples where manufacturers listed drugs for high prices only to be told by foreign governments that if they want to sell their drugs in that country they must lower the price. And they lower it.

It is time for this country to get tough on drug pricing and allow for competitive bidding, and provide data to doctors on a drug's cost- effectiveness. It is also time for us to have some difficult discussions about how much we are willing to pay for the cost of care at the end of life.

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