Wednesday, November 30, 2011

Fixing the Pharms

Whether you love or loathe pharmaceutical companies, it's clear that we have a problem with pharmaceutical delivery in the U.S.

First of all, some drugs are inexplicably expensive. There's the $93,000 prostrate cancer drug Provenge, for example,  which I've blogged about in the past ("The Skewed Values of Drug Prices"). A more recent example is Anascorp, an orphan drug (used to treat rare diseases) approved by the FDA in August to treat scorpion stings. Anascorp has been used in Mexico for many years, at a cost of $100 per dose, but in the U.S. it now costs  $12,000 per dose, according to a recent Kaiser Health News blog post on the topic ("Treating a Scorpion Sting: $100 in Mexico or $12,000 in U.S."). Blog author Jenny Gold points out that patients need up to five doses of the anti-venom to recover.

It's not fair, however, to blame the cost entirely on the manufacturer, Rare Disease Therapeutics. Gold writes that hospitals in Arizona purchase Anascorp for about $3,700 per dose, then mark up the price to cover their own costs, including the cost of providing care for uninsured patients. It's a long and tangled journey from a $100 dose to a $12,000 dose, and one that does not serve patients well.

More common drugs aren't faring much better, however. There is currently a shortage of generic injectable drugs used to treat cancer and other serious medical problems, an issue covered earlier this month by another Kaiser Health News blog post ("Drug Shortages Affect More Than half a Million Cancer Patients").

The problem has become so acute that it triggered a presidential smackdown, a.k.a. an executive order, in October that demands FDA action and includes Justice Department investigations of possible price gouging.  There are many reasons for these drug shortages, such as a shortage of raw materials needed to make the drugs, and a limited number of manufacturers, who drop production of the drugs if they are not profitable enough or if they have problems with the manufacturing process (as sometimes happens with vaccines).

What's the cure for all this? Don't get sick, silly. But failing that, as we all do from time to time, it seems clear to me that the government needs to flex its muscle with the pharmaceutical companies that bring both great good and great expense to health care.

Taxpayer-funded research should not lead to drugs that taxpayers cannot afford when they need them. The pursuit of blockbuster drugs - those that earn $1 billion or more per year in revenues -  should not undermine the development of less profitable, equally necessary treatments for other diseases. Government incentives and regulations should ensure that a wide range of manufacturers are providing the medications that Americans need.