Double Drug Jeopardy

From the archives:

(17 February 2006) I'll be honest with you: I really don't know what to think about drug companies. I'll give them some credit, since unlike many of their peers they produce a product that is useful to society and has important humanitarian implications. I want to like them--I really do--but when I read about things like this, it becomes pretty difficult.

On 15 February, The New York Times published a detailed account in its business section on the exorbitant prices some pharmaceutical companies are willing to charge for their therapies. The report focused on Avastin, a drug produced by Genentech for treatment of colon cancer. The drug is now being prescribed for breast and lung cancer, but a year of Avastin treatment for these conditions can cost $100,000. Ouch.

Surely this steep price tag must mean that Avastin is just a really expensive drug to produce, or maybe Genentech just wants to recoup the money it spent to develop it. Right?


Until now, drug makers have typically defended high prices by noting the cost of developing new medicines. But executives at Genentech and its majority owner, Roche, are now using a separate argument -- citing the inherent value of life-sustaining therapies.

If society wants the benefits, they say, it must be ready to spend more for treatments like Avastin and another of the company's cancer drugs, Herceptin, which sells for $40,000 a year.

"As we look at Avastin and Herceptin pricing, right now the health economics hold up, and therefore I don't see any reason to be touching them," said William M. Burns, the chief executive of Roche's pharmaceutical division and a member of Genentech's board. "The pressure on society to use strong and good products is there."

In other words, "If you don't want to die, you'd better pay up... bitch."

The New York Times elaborates extensively on Genentech's "aggressive" pricing schemes. At one point, the article mentions the specific example of a patient named Ellis Minrath, who has decided not to take Genentech's drug Tarceva for his pancreatic cancer because it would cost him $1,000 a month (even after Medicare has paid the rest of the bill). In its bid for my Most Absurd Quote of the Week Award, the drugmaker responds:

But Dr. Desmond-Hellmann, the Genentech product development chief, said she would recommend that Mr. Minrath be treated with Tarceva. "I don't think any patient should go without a Genentech drug for an inability to pay," she said. "If this is about money, that would disturb me."

Yes, and it should also disturb anyone else reading this, but we're not the ones charging the exorbitant fees!

Adding another layer to the debacle is the fact that Genentech has only tested Avastin for breast cancer or lung cancer treatment at a dose double that prescribed for colon cancer. Despite calls from physicians to test lower amounts, Genentech has resisted:

The higher cost of using Avastin in breast and lung cancer, compared with colon cancer, is a result of cancer drugs' being priced on the basis of weight. In colon cancer, Genentech tested Avastin at a dose of 5 milligrams of the drug per kilogram -- or 2.2 pounds -- of the patient's body weight. But in lung and breast cancer, the company tested the drug at a dose of 10 milligrams per kilogram of body weight.

Because the actual cost of producing Avastin is a fraction of what Genentech charges for it, some analysts and doctors had expected the company to lower Avastin's price per milligram for use in lung and breast cancer.

Dr. Leonard Saltz, an oncologist at Memorial Sloan-Kettering Cancer Center in New York, noted that Genentech had not tested the Avastin at the dose level for colon cancer in large-scale trials of lung and breast cancer. As a result, no one really knows whether the lower dose might turn out to be equally effective in lung and breast cancer, he said. Besides costing less, he said, a lower dose might have fewer side effects.

"There are no meaningful data to allow us to address that question," he said.

The whole point of medical science is to improve the quality of people's lives, but I don't think anyone considers financial ruin to be such a desirable outcome. Genentech is in a real position to address this by either charging less for Avastin or testing lower doses of the drug (regardless, still making a healthy profit). Especially since this second option could have the added bonus of reducing side effects, the lack of tests at a lower dose is upsetting. In science, all knowledge is good knowledge, so it's time for Genentech to get on the ball here.

The pharmaceutical industry is one of the most heavily subsidized sectors of the American economy, supported by taxpayers through billions of dollars of federally funded biomedical research in universities and research centers across the nation. People overwhelmingly support this cause, though, for good reason. They believe in the promise of modern medicine to improve people's lives, and they are willing to pay for it. In return for their initial financial support, though, these people should expect to enjoy fair access to the treatments that they have in part funded. Charging inflated fees for these drugs is equivalent to making patients pay for them twice and is neither fair nor honest.


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I have a simple solution.

Ban them from selling that medicine.

Where was the world before this? Make it the same afterwards. No greed. No medicine.

By Bart Black (not verified) on 29 Jul 2006 #permalink

I have a simple solution for you. Get rid of patents and allow free competition in selling drugs. As for the viability of drug research without patents, read Against Intellectual Monopoly by David Levine and Michelle Boldrin.