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What They Are Saying about the Value of New Innovative Medicines

Robert Zirkelbach
Robert Zirkelbach September 29, 2014

What They Are Saying about the Value of New Innovative Medicines.

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It’s not every day that a new treatment becomes available that is able to cure 90 percent of the patients.

Yet that is exactly what has happened with new and forthcoming medicines to treat hepatitis C.

Rather than celebrate this remarkable achievement, some have chosen to focus exclusively on the price of the medicine while ignoring the long-term value it provides to patients and the health care system broadly. 

researcherToo often this debate ignores the fact that developing new medicines is an incredibly difficult, long, and costly process. It takes on average 10 to 15 years and $2.6 billion to bring a new medicine to patients. And because of the complicated nature of biology, most drugs that are tested never make it to market. Researchers screen tens of thousands of potential new medicines, and of those that reach clinical trials, only one in six will receive FDA approval. 

Importantly, the current debate about prescription drug costs is coming at a time of historically low health care cost growth. For example, the federal government recently lowered their projections for future prescription drug spending. The government projects that prescription drug spending will grow at the same rate as overall health care spending and continue to account for less than 10 percent of total health care spending through the next decade – the same percentage as it was in 1960.

Prescription drug spending has remained consistent despite biopharmaceutical companies bringing more than 400 new medicines to patients over the past 15 years. And these estimates are coming at time when biopharmaceutical companies are developing new and forthcoming medicines to treat hepatitis C, melanoma, Alzheimer’s, and many other debilitating diseases.

Don’t just take it from us. Hear what experts from around the country have been saying about the value and cost of new innovative medicines:

  • “…if we only look at the per-pill cost we have blinders on. We have to think about the impact on the health-delivery system overall - and if a more expensive new drug reduces symptoms to the extent that patients aren’t hospitalized as much, then that has enormous economic impact."      – Elliott Antman, professor of medicine at Harvard Medical School and president of the American Heart Association, told Reuters.
  • "Would I rather be spending $600,000 for a liver transplant and living a restricted life afterwards, or would I rather pay $80,000 up front and guarantee I never have to go through that? In that context, it doesn't look like such a bad deal." – Dana Goldman, executive director of University of Southern California's Schaeffer Center for Health Policy and Economics, told Vox.
  • “You can’t just go for the least expensive. You have to think about what is best for patients.” –Dr. Brian K. Solow, chief medical officer of OptumRx, which is owned by the UnitedHealth Group, told the New York Times.
  • “My  virus is now undetectable. I was so sick for so long. Now I’ve got a new life.” – Laurel Welch, a retired nurse who received treatment for a disease she had for 25 years, told the Boston Globe 
  • "It becomes a policy question, of what we're willing to trade for less innovation. We have to be very careful because the benefits to innovation are huge. And this is really the hardest question we have in health economics is this efficiency dilemma." – Craig Garthwaite, a health economist at Northwestern University's Kellogg School of Management, told Vox.
  • “Overall, I think [new treatments for hepatitis C] will provide to be cost effective relative to what we were already doing with these patients, so it’s actually a bad example for the anti-technologist to pick because it does cure the disease.” – Uwe Reinhardt, Princeton University Professor

Topics: Hepatitis C