The Skewed Values of Drug Prices

The eye-popping pricing strategies for two pharmaceuticals have been big news lately. First, the cost of a weekly progesterone injection, designed to prevent premature births in at-risk pregnant women, jumped from about $20 per shot to $1,500 per shot.

What happened? The active ingredient of the shot had been compounded by pharmacies as needed by physician request to prevent premature births in the past, while the FDA quietly looked the other way. But in February, the FDA officially approved KV Pharmaceutical's version of the shot, Makena, and KV Pharmaceutical decided to raise the price - a lot.

It was a stunning move for a product whose development was partially funded by taxpayers through the National Institutes of Health, and whose approval had been fast-tracked and supported by the FDA's Orphan Drug Act, according to a recent FDA statement. In response to public outcry, KV Pharmaceutical later dropped the price to $690 per dose. 

Then, on March 30, Medicare announced (in a preliminary decision still in the comment phase) that it would cover the $93,000 price tag of Dendron Corporation's prostate cancer vaccine Provenge, which extends life for a few months in cancer patients.

Dendron's website currently runs an ad for Provenge called "Jonathan's story." In the ad, the patient says "fighting my cancer could mean meeting my new granddaughter, who is due in a few months."  But ironically, current health care policy pits infant health against health care for the elderly.

Is it wise to pay for medication that could extend a long life a few months longer, while allowing companies to create financial barriers to accessing medicine that could help an infant get a healthy start on life? It isn't if you look at health care as a tool to extend healthy years of life, a view that is currently shifting kidney allocation rules, as I've blogged before. In an opinion piece in the Washington Post this weekend, a prostate cancer survivor points out a similar resource allocation problem with Provenge:

One thing I can assure you is that I would never ask Medicare to pay $93,000 for a treatment to extend my life four months. However, I would ask Medicare officials this: if Provenge is prescribed to me as a possible treatment and I turn it down, could I put the savings into a college fund trust account for my grandchildren? I feel the country would benefit much more from educating three of its citizens than from keeping me around another four months. I have a hunch Medicare's answer would be no. 

We need to ask what society owes to two vulnerable populations - pregnant young women at risk of preterm delivery, and terminally ill older men. Rather than pittting ACOG against the AARP, we should step back and ask what is a reasonable amount of funds to invest in protecting each of these populations. And what is a fair and ethical price to charge for the medications they need?