<?xml version="1.0" encoding="UTF-8"?><rss version="2.0"
	xmlns:content="http://purl.org/rss/1.0/modules/content/"
	xmlns:dc="http://purl.org/dc/elements/1.1/"
	xmlns:atom="http://www.w3.org/2005/Atom"
	xmlns:sy="http://purl.org/rss/1.0/modules/syndication/"
		>
<channel>
	<title>Comments on: BIOTECH: A Road Toward Value-Based Pricing</title>
	<atom:link href="http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/feed/" rel="self" type="application/rss+xml" />
	<link>http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/</link>
	<description>The Policy Journal of the Health Sphere</description>
	<lastBuildDate>Fri, 20 Nov 2009 20:04:42 -0500</lastBuildDate>
	
	<sy:updatePeriod>hourly</sy:updatePeriod>
	<sy:updateFrequency>1</sy:updateFrequency>
		<item>
		<title>By: mgoozner</title>
		<link>http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/comment-page-1/#comment-136</link>
		<dc:creator>mgoozner</dc:creator>
		<pubDate>Fri, 03 Nov 2006 02:34:46 +0000</pubDate>
		<guid isPermaLink="false">http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/#comment-136</guid>
		<description>How would a novelist describe the cancer patient&#039;s quality-of-life during that quality-adjusted life year purchased for $55,000?

Do not take this as a defense of the former eastern bloc, but there are actually plenty of examples of state-sponsored innovations that have had a tremendous impact on public health: We&#039;re watching the emergence of artemisinin-combination therapy for malaria, a product of an initial collaboration between Mao Tse-Tung and Ho Chi Minh and the traditional Chinese medicine doctors they set in motion at the height of Mao&#039;s cultural revolution. Go figure. How about penicillin? If the federal lab in Peoria, Ill. hadn&#039;t come up with a method for mass fermentation, it wouldn&#039;t have reached the troops before the end of WWII. Want to talk about biotech? Read the first chapter of my book, &quot;The $800 Million Pill,&quot; and I defy you to say that Amgen&#039;s price for Epogen has anything to do with a) the cost of development; b) an incentive needed for further innovation; or c) the value it adds to patients&#039; lives.

I had a few moments this evening to drop in on this new blog to see what folks had to say on this interesting subject, and I was sad to see that the health care economists who fuss over this topic never seem to grapple with two, mutually exclusive realitiies.

First, the historical driving forces in significant medical innovation are the mutually reinforcing combination of human need (think of the AIDS crisis) and investigator drive (think of Brian Drucker and the development of Gleevec), nurtured by scientific serendipity and leavened by the difficulties of the tasks at hand (think of Alzheimer&#039;s . . . what does it cost to develop a good AZ drug? Why, the answer is simple. Infinity. Why? Because we don&#039;t know how to do it and any amount of money divided by zero is infinity).

The competing reality is that the private sector responds to a completely different set of signals, which are quite legitimately set by capital markets (the supply side) and health care provider markets (the demand side). I would humbly submit that neither market sends appropriate signals for maximizing health. I am sure the sophisticated readers of this blog know the arguments of contrarians like myself, ranging from the critique of me-too drugs to the hyper-marketing of minimalist improvements (read the oct.19 NEJM for the latest installment, on Xigris). Suffice it to say for now that even while the private sector as currently organized and responding to market signals as they currently exist does occasionally deliver innovation, it delivers just as much if not more waste. Any discussion of biotech drug pricing (and health care pricing generally) that doesn&#039;t take into account those realities will find itself on the outside looking in at the coming debate over how to create a sustainable health care system for all Americans.</description>
		<content:encoded><![CDATA[<p>How would a novelist describe the cancer patient&#8217;s quality-of-life during that quality-adjusted life year purchased for $55,000?</p>
<p>Do not take this as a defense of the former eastern bloc, but there are actually plenty of examples of state-sponsored innovations that have had a tremendous impact on public health: We&#8217;re watching the emergence of artemisinin-combination therapy for malaria, a product of an initial collaboration between Mao Tse-Tung and Ho Chi Minh and the traditional Chinese medicine doctors they set in motion at the height of Mao&#8217;s cultural revolution. Go figure. How about penicillin? If the federal lab in Peoria, Ill. hadn&#8217;t come up with a method for mass fermentation, it wouldn&#8217;t have reached the troops before the end of WWII. Want to talk about biotech? Read the first chapter of my book, &#8220;The $800 Million Pill,&#8221; and I defy you to say that Amgen&#8217;s price for Epogen has anything to do with a) the cost of development; b) an incentive needed for further innovation; or c) the value it adds to patients&#8217; lives.</p>
<p>I had a few moments this evening to drop in on this new blog to see what folks had to say on this interesting subject, and I was sad to see that the health care economists who fuss over this topic never seem to grapple with two, mutually exclusive realitiies.</p>
<p>First, the historical driving forces in significant medical innovation are the mutually reinforcing combination of human need (think of the AIDS crisis) and investigator drive (think of Brian Drucker and the development of Gleevec), nurtured by scientific serendipity and leavened by the difficulties of the tasks at hand (think of Alzheimer&#8217;s . . . what does it cost to develop a good AZ drug? Why, the answer is simple. Infinity. Why? Because we don&#8217;t know how to do it and any amount of money divided by zero is infinity).</p>
<p>The competing reality is that the private sector responds to a completely different set of signals, which are quite legitimately set by capital markets (the supply side) and health care provider markets (the demand side). I would humbly submit that neither market sends appropriate signals for maximizing health. I am sure the sophisticated readers of this blog know the arguments of contrarians like myself, ranging from the critique of me-too drugs to the hyper-marketing of minimalist improvements (read the oct.19 NEJM for the latest installment, on Xigris). Suffice it to say for now that even while the private sector as currently organized and responding to market signals as they currently exist does occasionally deliver innovation, it delivers just as much if not more waste. Any discussion of biotech drug pricing (and health care pricing generally) that doesn&#8217;t take into account those realities will find itself on the outside looking in at the coming debate over how to create a sustainable health care system for all Americans.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: LFBaltrucki</title>
		<link>http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/comment-page-1/#comment-113</link>
		<dc:creator>LFBaltrucki</dc:creator>
		<pubDate>Fri, 27 Oct 2006 13:05:04 +0000</pubDate>
		<guid isPermaLink="false">http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/#comment-113</guid>
		<description>(Along the same lines as what Neil Gardner has shared)

As a nation and as a society, in addition to the specific issues under discussion we also need to answer some of the more fundamental questions.  

Examples: What diseases can be completely prevented? (i.e. primary prevention) and What diseases can be detected at early subclinical stages and effectively arrested such that they do not progess? (i.e. secondary prevention).  

I submit that the wealth of basic science knowledge that we have have about disease at the molecular and cellular level, mostly publically-funded, (but not held in the public&#039;s trust) can be transformed into interventions that are directed at earlier stages of diseases. But who will be responsible for redirecting the resources and efforts along these lines and towards what we, the people, actually need? Big Pharma/Biotech? I don&#039;t think so.  Governmental Labs/Agencies as currently configured (up until now this occurs only in exceptional cases rather than being part of a concerted effort).

This may not be the most appropriate forum (on this particular blog) to state this, but there is a fundamental conflict between our nation&#039;s plan for healthy peolple and the business development strategies of Big Pharma/Biotech, and the time for an honest and open discussion about this issue is long overdue.   

As a pathologist I have been involved in cancer diagnosis for over 20 years. Also with a strong family history of colon cancer I am heavily invested in preventing colon cancer in myself and other family members.  We get all of our &quot;medicine&quot; to prevent colon cancer from Wal-Mart and Costco (or similar stores).  The evidence that supports the benefits of these vitamins and supplements has been derived from clinical trials that were funded completely by the government (NCI&#039;s Division of Cancer Prevention) which is currently getting less than 5% of the total NCI budget.  Thanks to this research, the chances of my family members actually getting colon cancer have been substantially reduced. 

What are the areas that we need to be working on right now?   Just to start out, let&#039;s make two lists; one developed by the best and brightest minds in goverment biomedical research and health care the other developed by Big Pharma/Biotech.  There would need to be Congressional oversight of the process by which appropriations for research funding were matched to national health priorities.  Priority areas where government and industry could work together would be identified. Oversight of the entire process would need to be more intensive and more inclusive than it is now.

Our current strategy, (treating diseases that are fully established with newer and more xpensive) biologicals for marginal/incremental benefits, WILL NOT take us where we need to go.</description>
		<content:encoded><![CDATA[<p>(Along the same lines as what Neil Gardner has shared)</p>
<p>As a nation and as a society, in addition to the specific issues under discussion we also need to answer some of the more fundamental questions.  </p>
<p>Examples: What diseases can be completely prevented? (i.e. primary prevention) and What diseases can be detected at early subclinical stages and effectively arrested such that they do not progess? (i.e. secondary prevention).  </p>
<p>I submit that the wealth of basic science knowledge that we have have about disease at the molecular and cellular level, mostly publically-funded, (but not held in the public&#8217;s trust) can be transformed into interventions that are directed at earlier stages of diseases. But who will be responsible for redirecting the resources and efforts along these lines and towards what we, the people, actually need? Big Pharma/Biotech? I don&#8217;t think so.  Governmental Labs/Agencies as currently configured (up until now this occurs only in exceptional cases rather than being part of a concerted effort).</p>
<p>This may not be the most appropriate forum (on this particular blog) to state this, but there is a fundamental conflict between our nation&#8217;s plan for healthy peolple and the business development strategies of Big Pharma/Biotech, and the time for an honest and open discussion about this issue is long overdue.   </p>
<p>As a pathologist I have been involved in cancer diagnosis for over 20 years. Also with a strong family history of colon cancer I am heavily invested in preventing colon cancer in myself and other family members.  We get all of our &#8220;medicine&#8221; to prevent colon cancer from Wal-Mart and Costco (or similar stores).  The evidence that supports the benefits of these vitamins and supplements has been derived from clinical trials that were funded completely by the government (NCI&#8217;s Division of Cancer Prevention) which is currently getting less than 5% of the total NCI budget.  Thanks to this research, the chances of my family members actually getting colon cancer have been substantially reduced. </p>
<p>What are the areas that we need to be working on right now?   Just to start out, let&#8217;s make two lists; one developed by the best and brightest minds in goverment biomedical research and health care the other developed by Big Pharma/Biotech.  There would need to be Congressional oversight of the process by which appropriations for research funding were matched to national health priorities.  Priority areas where government and industry could work together would be identified. Oversight of the entire process would need to be more intensive and more inclusive than it is now.</p>
<p>Our current strategy, (treating diseases that are fully established with newer and more xpensive) biologicals for marginal/incremental benefits, WILL NOT take us where we need to go.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Neil Gardner</title>
		<link>http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/comment-page-1/#comment-111</link>
		<dc:creator>Neil Gardner</dc:creator>
		<pubDate>Thu, 26 Oct 2006 12:31:57 +0000</pubDate>
		<guid isPermaLink="false">http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/#comment-111</guid>
		<description>When I read this discussion about the top of the foodchain drug discovery process and/or selling/pricing ideas, I see an analogy coming forth.  That analogy is buying a super sports car to drive on roads that only allow safe driving at 35 MPH.  

You all know the IOM report ( http://www.iom.edu/Object.File/Master/4/117/ToErr-8pager.pdf ) listing medical errors as one of the leading casues of death in America.  You do also realize that our current system has 47 million uninsured showing a death spiral insurance paradigm coming forth to threaten everyone&#039;s ability to  eventually afford health care!  In light of this, just what should we be talking first about around here: the needed infrastructure to drive at all, or the latest sports cars??</description>
		<content:encoded><![CDATA[<p>When I read this discussion about the top of the foodchain drug discovery process and/or selling/pricing ideas, I see an analogy coming forth.  That analogy is buying a super sports car to drive on roads that only allow safe driving at 35 MPH.  </p>
<p>You all know the IOM report ( <a href="http://www.iom.edu/Object.File/Master/4/117/ToErr-8pager.pdf" rel="nofollow">http://www.iom.edu/Object.File/Master/4/117/ToErr-8pager.pdf</a> ) listing medical errors as one of the leading casues of death in America.  You do also realize that our current system has 47 million uninsured showing a death spiral insurance paradigm coming forth to threaten everyone&#8217;s ability to  eventually afford health care!  In light of this, just what should we be talking first about around here: the needed infrastructure to drive at all, or the latest sports cars??</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: James C. Robinson</title>
		<link>http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/comment-page-1/#comment-109</link>
		<dc:creator>James C. Robinson</dc:creator>
		<pubDate>Wed, 25 Oct 2006 23:03:35 +0000</pubDate>
		<guid isPermaLink="false">http://healthaffairs.org/blog/2006/10/25/biotech-a-road-toward-value-based-pricing/#comment-109</guid>
		<description>Comparing the cost effectiveness of a new biologic against the range of costs and QALYs already covered, or against some cost-per-QALY benchmark (as done in Britain) is interesting and good public policy.  But here the issue is price, not &quot;cost&quot; in the immediate sense.  Biotech companies have discretion (some call it strategy, to prove they have an MBA) to set the price regardless of cost (or rather, price must cover incremental costs of manufacturing and distribution but need only make some contribution to covering research and development costs).  This discretion can be used to come in at any cost-per-QALY level desired.  For example, Genentech&#039;s recent price cap for Avastin ($55,000 per patient per year) is close to the maximum cost-per-QALY guideline that is used in Britain.  This does not get really at the &quot;cost effectiveness&quot; of the drug but does perhaps provide an (arbitrary) lid to product prices.  Or not?</description>
		<content:encoded><![CDATA[<p>Comparing the cost effectiveness of a new biologic against the range of costs and QALYs already covered, or against some cost-per-QALY benchmark (as done in Britain) is interesting and good public policy.  But here the issue is price, not &#8220;cost&#8221; in the immediate sense.  Biotech companies have discretion (some call it strategy, to prove they have an MBA) to set the price regardless of cost (or rather, price must cover incremental costs of manufacturing and distribution but need only make some contribution to covering research and development costs).  This discretion can be used to come in at any cost-per-QALY level desired.  For example, Genentech&#8217;s recent price cap for Avastin ($55,000 per patient per year) is close to the maximum cost-per-QALY guideline that is used in Britain.  This does not get really at the &#8220;cost effectiveness&#8221; of the drug but does perhaps provide an (arbitrary) lid to product prices.  Or not?</p>
]]></content:encoded>
	</item>
</channel>
</rss>
