10 ms·
> “We estimate the cost to manufacture a dose would be about $4,000,” she says. That’s compared to a cost of around $50,000 to alter a patient’s cells and retur
by mediocrejoker 10y ago
> “We estimate the cost to manufacture a dose would be about $4,000,” she says. That’s compared to a cost of around $50,000 to alter a patient’s cells and return them.
> Either type of treatment is likely to cost insurers half a million dollars or more if they reach the market.
Can someone more familiar with the pharmaceutical industry explain this?
- L_Rahman 10y agoI can explain the first quote. In a universal donor scenario, the T-cells are engineered, error corrected and tested once. From there, they can be multiplied pretty cheaply. Most of the cost is in the initial engineering. In a patient cell scenario, each individual patient's cells must be engineered, tested and delivered. This is obviously much more expensive. A very crude computer science analogy would be the difference between scaling up a load balanced application relative to adding a new server from bare metal without automated scripts. Why the treatment would cost half a millions dollars at the market is outside of my purview, so I'm eager to get an explanation as well.
- omegaworks 10y agoPrivate insurers are too fragmented and small to negotiate a reasonable price for treatment. They lack the leverage that something like a national single-payer system would have.
- replicatorblog 10y agoThe largest insurer in the US covers more people than the NHS. The second and third largest insurers rival other continental health services.
- omegaworks 10y agoPlease offer an alternative rationale for why they aren't as effective. I'm trying to understand why US healthcare is so broken.
- refurb 10y agoIt's easy. The UK can say "no" to paying for certain drugs. They take some political flak for it, but overall they've been able to keep spending down. Even mention not paying for something in the US and holy hell happens. Even Medicare and Medicaid can't say no for the most part. If American's want cheaper healthcare they are going to have to get used to having less of it and not get all the fancy new technology right away.
- woofyman 10y agoInsurance companies only pay for what they consider usual and customary.
- omegaworks 10y ago>It's easy. No, clearly it's not. I work for a startup that's delivering health services. Insurance companies have a very high bar for what they cover. They are very conservative about covering new therapies. There's a lot of snake oil in medicine (acupuncture, homeopathy) and they don't want to pay for what doesn't keep their members healthy.
- refurb 10y agoIt's not easy to execute, but it's easy to figure out one of the key drivers of increased costs in the US. Compare drug coverage in the US vs. Canada or the UK. New drugs are often covered immediately post-FDA approval in the US. Heck, look at Exondys 51 for Duchenne's. The FDA barely approved it and pretty much every US insurer is paying for it. That doesn't happen in other countries. A great example is the diabetes drug called Jardiance. It has better efficacy than older drugs and every US insurer covers it. It's not covered in many Canadian provinces.
- gozur88 10y agoIf by that you mean they can't dictate the price of drugs, sure. But that has more to do with not being an arm of the state than being "fragmented and small".
- omegaworks 10y agoThe CHS and NHS are able to negotiate drug prices even though they can't coerce US companies with force.
- gozur88 10y ago"You give us this price or we don't use your drug" isn't coercion?
- omegaworks 10y agoThe drug company can walk away from the negotiation. Either party can say no. That's the difference between coercion and negotiation.
- gozur88 10y agoThe difference is governments don't have competition. If you play hardball with a drug company in the US, one of the reasons they can walk away is there are other insurance companys to which they can sell their drugs. And insurance companies can't throw drug company officers in jail.
- omegaworks 10y ago> The difference is governments don't have competition. There are many governments in the world. If one government plays hardball with a drug company, drug company can go find a different government, or negotiate with private insurers in that same country. Yes, private insurers exist even in countries that provide basic healthcare to all their citizens. [0] > And insurance companies can't throw drug company officers in jail. Show me where this has happened. This scaremongering and black-ops has nothing to do with the practice of negotiating price. There are many people that wish Martin Shkreli went to jail for gouging AIDS patients, but that's not happening. 0. http://thehealthcareblog.com/blog/2012/01/16/the-awkward-world-of-private-insurance-in-the-uk/ http://thehealthcareblog.com/blog/2012/01/16/the-awkward-wor...
- blisterpeanuts 10y agoMostly profit to pay back the investors for billions of dollars in research and development, and baked in liability insurance. Some of it also goes to pay for the R&D of other drugs that never make it to market.
- omegaworks 10y agoThis is propaganda. Spending on research and development at private pharmaceutical companies is dramatically eclipsed by marketing and sales spend. https://www.google.com/amp/s/www.washingtonpost.com/amphtml/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/?client=safari https://www.google.com/amp/s/www.washingtonpost.com/amphtml/...
- refurb 10y agoYes, but sales and marketing has a positive ROI. If you spend $100M on sales and marketing, you'll get $150M back (for example). Otherwise, why would you do it? So if pharma companies cut out all of their sales and marketing, they'd have even less revenue than they do today. And that would lower R&D spend.
- woofyman 10y agoWhy do drugs need marketing?
- maxerickson 10y agoThe treatment also requires a bone marrow transplant (which requires destroying the patient's immune system). It's a lot of medical care.
- strainer 10y agoAre you sure? I don't find that claim in the articles or report. The bone marrow procedures seem performed in the context of the chemotherapy treatment - which failed in combination. They dont seem to indicate how necessary or unnecessary that combination was to this treatments success here.
- maxerickson 10y agoThe "Subject 1" and "Subject 2" sections of the paper both speak of persistent malignancy in bone marrow.
- strainer 10y agoI have not the experience to read this report with any confidence, but your comments are so far too brief to convince me that you have. Fig 2 in the report includes a chart which appears to indicate a bone marrow reading clearing in response to application of allo-SCT. How do you ascertain that this treatment does not in itself improve malignancy in bone marrow?
- maxerickson 10y agoThese “off-the-shelf” CAR T cells were then used to treat two infants with relapsed refractory acute lymphocytic leukemia and bridge them to allogeneic stem cell transplantation. I don't have much knowledge of the subject but a stem cell/bone marrow transplant seems to be a common treatment in aggressive cases of leukemia.
- nsgi 10y agoThe cost of $4,000 doesn't take into account R&D costs, which must be recuperated in the drug's price.
- vkou 10y agoIt also doesn't take into account marketing costs, which also must be recuperated in the drug's price, and are much bigger then the R&D costs...
- maxerickson 10y agoYou think that is also true for leukemia drugs/treatments?
- refurb 10y agoNobody invests in marketing unless the ROI is >100%. The marketing activity funds itself unless somebody screwed up.
- vkou 10y agoYes, of course. However, consider this dillema. You can sell 1 million pills, at a cost of $5 each. That's a 5 million profit. Or, you could spend 80 million in marketing, and sell 2 million pills, at the cost of $43 each. That's a 6 million profit. This is absolutely not beneficial to the first million customers. Also, consider that the United States is the only country in the world that allows direct-to-customer medical marketing... Which is one of the reasons why the cost of healthcare is so damn high.
- refurb 10y agoThis is absolutely not beneficial to the first million customers. Drug companies don't increase the price to pay for marketing. Prices are set based on what the market can bear. A small drug company that decides not to spend a lot on marketing is going to charge the same as a big company that does spend on marketing. How the math works is as follows: $5/pill; 1 million pills sold with no marketing = $5M profit $5/pill; 2 million pills sold with $3M in marketing spend = $7M in profit (66% ROI on marketing spend).
- JunkDNA 10y agoBecause it's not about how expensive it is to actually make the drug. To use a software analogy, Oracle doesn't price their database software by what it costs in bandwidth for you to come to their site and download the latest version. Or in the days of shrink-wrapped software, the cost of software was far from the cost of the materials (cardboard and discs). Books similarly aren't priced based on the cost of printing and distribution. The cost is directly related to recouping R&D costs as well as the clinical trials. In addition, with these therapies specifically, you actually have pay lots of highly trained people to administer them in the first place.
- D-Coder 10y agoIn some cases (and you left out marketing, which often exceeds the R&D costs). In other cases, the cost is directly related to 10% less than other treatments. Or to whatever the CEO thinks he can screw out of patients. See: Shkreli; Epipen.
- JunkDNA 10y agoI disagree with your statement "in some cases". It's "most cases" and where it is not, those are the ones that get the attention and screaming headlines. Shrekli is in the news precisely because this behavior is not normal. But generally, much like other goods, drugs are priced based on how much the consumer values them. I will also add, that for really big ticket things like oncology drugs, I believe every company offers payment assistance programs which often have very high income cutoffs that provide co-pay help or outright free drugs when insurance doesn't cover it. Marketing is a red-herring. Sales and marketing should bring in more money than you spend on them or they're not worth doing. They exist to drive money This makes the company more profitable in the near term than R&D expenditure which can take decades to materialize.
- stonemetal 10y agoOne dose costs $4,000. A full treatment is more than one dose. That sounds like over 100 doses if all you do is pop some pills. If I had to guess it probably isn't 100 doses but you have to do other things like stay in a hospital during the course of treatment, other tests, or something else that adds to the price tag. AKA the price tag on a service is usually much more than the cost of goods sold.