Tuesday, May 22, 2007

Yeah, I guess it works, but how much does it cost?

My dad always told me money doesn't grow on trees, and now it looks like the US government and private payors are starting to take his advice.

The issue of comparative cost-effectiveness isn't new. But the recent attention on that very issue is new, at least in the US. Under an undivided Republican administration for the last six years and change, this was an argument for university professors, think tanks, and policy wonks. Now, with Democrats in control of Congress and the very real possibility of a Democratic president in January 2009, Big Pharma and large biotechs are thinking seriously about how to ready for the coming storm.

How does an expensive new drug compare to one that has been generic for the last decade? How much money is a month of survival worth to a cancer patient? $50,000? $100,000? How can you put a price on it?

Results from the large CATIE study on antipsychotics really jumpstarted the debate. Pending results from an NIH head-to-head trial of Genentech's Lucentis vs. Avastin will take it to another level.

I have heard from a number of large biopharma manufacturers in the last week that they are starting to think about the issue of comparative cost-effectiveness during Phase I trials. Phase I trials!!!??? Boy, that's early. The drug is barely being put into humans and is a New York minute from being tested in mice.

The RPM Report has been following this issue for some time (check our archives) and a more in-depth look will appear in our June issue. There have been a number of developments in this area, newly created academic centers, and proposals on the table on how to evaluate cost vs. outcome improvement. So look out for it.

Is your company thinking about this? Or is this an inside-the-beltway kerfuffle? As always, your comments are welcome. Just leave your name, company affiliation, and email. Kidding.

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