The Cost of Living (just a little longer)

New York magazine has an extensive article of the cost of new cancer drugs. The example they use is Zaltrap, which the FDA approved for treatment of advanced colon cancer, for patients in whom more standard treatments have failed. Studies show that several months of treatment with Zaltrap can extend a patient's survival for an average of 42 days. The cost is $11,000 a month. That is only for the drug itself; it does not include the cost of administering it intravenously, the cost of hospitalization, or the cost of drugs to combat side effects. The effectiveness of Zaltrap is equivalent to Avastin, another drug of last resort, which costs half as much.

The FDA cannot take cost into consideration when it approves new drugs -only safety and effectiveness. When doctors take cost into consideration when prescribing treatment for their patients, they are lambasted for being cold-hearted. And it is extremely difficult for families to weigh cost-effectiveness when confronted with a dying loved one. But is extending the life of a terminal patient for six weeks of bedridden illness worth bankrupting the family -or our health care system? Gastrointestinal oncologist Leonard Saltz of Memorial Sloan-Kettering Cancer Center says the time has come in which we have to consider such questions.    

“There is a number in people’s minds,” he says. “If you say to people, ‘I have a drug that extends life by one day at a billion dollars; shouldn’t we as a society pay for it?,’ I’m pretty confident most people would say no. If I say, ‘I have a drug that extends life by three years at a cost of $1.50,’ I’m pretty confident everybody would say, ‘Of course!’ Somewhere in there is a number, a tipping point, where we say, ‘No, we can’t.’ Right now, we’re unwilling as a society to explore where that point is. And I would argue that we have to. Wherever it may be, we have to find it.”  

The pharmaceutical industry defends its pricing by citing the enormous cost of bringing a new drug to the market. But if the newest drugs for cancer provide so little benefit, wouldn't that research money be better spent to develop new vaccines or antibiotics or drugs that benefit a larger number of patients? Maybe, but terminal cancer patients are more willing to agree to extremely expensive treatments. There's a lot of food for thought in the article by Stephen S. Hall. -via Metafilter

(Image credit: Remie Geoffroi)


Another factor to keep in mind is often-rare 'orphan diseases'. In many cases drugs that have a good chance of treating those diseases are found but not brought to the market for a variety of reasons. However at least one company discovered that because drug prices were not regulated as most medical treatments, they could identify and bring those drugs to market. In one case I know of, the drug costs over $100,000 per year per patient, but saves the lives of those 100 or so people in the world who have the disease. This drug was originally found or created by a major drug company but was never marketed. A startup (founded by a person whose daughter had the disease) licensed it and brought it to market. In the 20 years since it has grown to $1Billion per year company, specializing in drugs like this. And the daughter is still alive and a productive member of society.

These numbers are closer to the point of flexion. Not many people contribute $100,000 per year of productivity to the economy, but many people would pay that to keep their child alive.
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A few years ago I was diagnosed with aplastic anemia that was idiopathic in its causes. I fell into a cross-convergence of sociological, genotypical, and phenotypical categories in which contracting the illness shouldn't have happened, but it did. Luckily I was blessed with a top-of-the-line insurance plan and health care providers who had helped me donate bone marrow in the not so distant past and were willing to work with me. As it was my diagnosis and treatment fell well past the seven figure mark to keep me alive if the expenses of all paying parties is combined. I don't know that I am remotely that valuable (certainly in econometric terms or earning potential - there is a reason professors have patches on their elbows) nor that I will be able to ever contribute value to society comparable to what was spent to keep me alive, but I am eternally grateful for it and, perhaps as important, I think my family and friends and students are as well. What I'm trying to get at here is that trying to weigh costs, benefits, and risk according to a wealth vs. life calculus is a false dialectic, Attempting to balance the two cannot, under any circumstance, yield results that inform our choices ethically or economically in any objective sense. Just my two cents.
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Economics has to inform our health care decision making because there is a finite amount of money available. People will make different decisions depending on how much of the cost is directly paid by their family or is to be shared (or funded completely) by other sources including insurance and government.
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