Memorial Sloan Kettering Cancer Center has developed an interactive calculator that measures how we might integrate values and outcomes into how we price drugs. What would industry be able to charge if the outcomes were linked to adverse events like side effects or extra life benefits? Look at the DrugAbacus graphic below. I would prefer a population metric such as mortality rates--discussed here, but I like how the model encourages consideration of the metrics that influence cost in cancer care.
When the value of a year of life is set at $120,000, with a toxicity discount that subtracts 15% off that level, the abacus price for many of the drugs is lower than the actual market price. A few have significant gaps at those settings, including Amgen Inc.’s Blincyto, approved by the U.S. Food and Drug Administration in December for the treatment of a rare type of leukemia. The market price for Blincyto is listed on Dr. Bach’s site as $64,260 a month, but the suggested abacus price is just $12,612.
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‘Currently cancer drug prices aren't linked to the benefit they provide. They’re currently priced on what the market can bear, which is an unsustainable system.’
—Daniel Goldstein, a medical oncologist at Winship Cancer Institute of Emory University
The interactive chart allows you to select the modifiable price components such as mechanism of action (novelty multiplier), toxicity, dollar per year, population burden of disease (blocked by pop-up). The grey bubble is the price of the drug at launch. If the DrugAbacus calculation predicts a lower price than the launch price the bubble is red or green if the cost is calculated above the launch price.
Value might cover quite a few ideas
- How much do patients benefit from the treatment?
- How difficult are the treatment’s side effects?
- Is the treatment for a rare disease?
- Does the treatment address a large public health burden?
- Is the treatment using a novel or new mechanism?
- Did the treatment cost a lot to discover or develop?
Be curious. Ask the questions...
"We live in an era in which, if you're willing to quint, all of human knowledge is accessible on smartphone, but the bias against curiosity still infuses our culture"--Brian Glazer |
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Thoughtful discussions about content development and outcomes analytics that apply the principles and frameworks of health policy and economics to persistent and perplexing health and health care problems