5 ms·

Pricing based on value provided to the customer makes a lot of sense for phones and web apps and cheetos. But how much do you value being alive? The "value" of

by drewrv 10y ago

Pricing based on value provided to the customer makes a lot of sense for phones and web apps and cheetos. But how much do you value being alive? The "value" of a lifesaving drug is essentially unbounded, most people will pay anything to stay alive. That's one of the reasons healthcare is an edge case where the typical rules of capitalism don't work. So yes, it is unfair to have some industries price their products based on "value".

koolba 10y ago
> Pricing based on value provided to the customer makes a lot of sense for phones and web apps and cheetos. > But how much do you value being alive? The "value" of a lifesaving drug is essentially unbounded, most people will pay anything to stay alive. That's one of the reasons healthcare is an edge case where the typical rules of capitalism don't work. > So yes, it is unfair to have some industries price their products based on "value". The problem with that logic is that taken to the extreme it means that everyone is entitled to every possible treatment, regardless of cost, and the rest of society must be the one that bears it. If a treatment exists to extend the life of a terminally ill person for 1 more day at a cost of $100K should the rest of us pay for it? How about $1M? The numbers are purposely ridiculous but it's not that far out of reality. At some point you need to draw the line and make the (not fun) decision of what's in and what's out. I'm convinced the bulk of this could be solved with some common sense planning: - Create an opt-in single payer plan at the federal level - Use the existing Medicare booking codes for identification and list prices for covered treatments (prices to be paid to service providers) - Service providers could opt in or out of the plans but couldn't do so on a per patient basis (i.e. similar to Medicare) - Only include medication and treatments that are out of patent protection - Only include medication that has at least N providers (was going to put three but may not exist for all generics) Anything else would be purely out of pocket and not covered by the plan. Fyi, that last one means that if we started today, you'd have access to everything up to approximately 1997. I'm not a doctor and honestly don't know much about the medical field, but I'm pretty sure that pre-1997 medications should cover the vast majority of healthcare use cases.
- allenz 10y ago
  Everyone knows single-payer would be great, but practically speaking we don't have the votes :( I'd also propose a ban on drug marketing, which would reduce about half the costs.[1] I don't think that excluding monopoly drugs will work. First, the industry has made significant progress in the past two decades, so for most major diseases, the leading treatment was patented within the last 20 years. Second, drug companies have little incentive to make direct competitors, and R&D effort is better allocated in areas with unmet medical need. Third, unpatented cures are already cheap, so by market size, almost all drugs are monopolies. Over a third of the $333B pharmaceutical market[2] can be attributed to: - Antibody drugs, $100B revenue and growing, almost all after 1997. E.g. Herceptin for HER2+ breast cancer, Humira for arthritis, Avastin for many cancers.[3,4] - The cure for Hepatitis C is patented until 2028, and currently has $20B revenue.[5,6] Disclaimer: I've worked in the industry. [1] http://blogs.sciencemag.org/pipeline/archives/2013/05/23/another_look_at_marketing_vs_rd_in_pharma http://blogs.sciencemag.org/pipeline/archives/2013/05/23/ano... [2] http://trade.gov/topmarkets/pdf/Pharmaceuticals_Executive_Summary.pdf http://trade.gov/topmarkets/pdf/Pharmaceuticals_Executive_Su... [3] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4622599/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4622599/ [4] http://www.prnewswire.com/news-releases/antibodies-market-north-americas-revenue-share-to-reach-44-in-2016-587799911.html http://www.prnewswire.com/news-releases/antibodies-market-no... [5] http://www.pharmacompass.com/patent-expiry-expiration/sofosbuvir http://www.pharmacompass.com/patent-expiry-expiration/sofosb... [6] http://www.pharmacompass.com/radio-compass-blog/top-drugs-by-sales-revenue-in-2015-who-sold-the-biggest-blockbuster-drugs http://www.pharmacompass.com/radio-compass-blog/top-drugs-by...
  - koolba 10y ago
    I'm not saying there aren't any great advances. I'm saying it's an easy line to draw. That's vs picking and choosing what modern treatments are included. The HepC treatment, while remarkably effective, would bankrupt most healthcare programs if they were forced to pay the retail price.
refurb 10y ago
Go talk to the NHS. They value a year of healthy human life at 30,000 GBPs. And if you take your idea to the extreme, then every person should have access to every type of medical care regardless of the value offered?
- drewrv 10y ago
  Every society rations medical care, it's a finite resource. Sure, bureaucrats in some countries do a cost benefit analysis with human lives. That's unfortunate, but I believe it's better than what we do in the US. Here we ration medical care by patient wealth, which strikes me as dystopian.
- huxley 10y ago
  Most people won't know what you're referencing. https://www.channel4.com/news/drugs-life-breast-cancer-nice-20-000-a-year-of-life-nhs https://www.channel4.com/news/drugs-life-breast-cancer-nice-... https://www.nice.org.uk/news/article/kadcyla-too-expensive-for-routine-funding-on-nhs https://www.nice.org.uk/news/article/kadcyla-too-expensive-f... NICE (National Institute for Health and Care Excellence) sets the guidance on the QALY (Quality Adjusted Life Year) at between 20000-50000GBP for a year's worth of a single drug treatment. Of the drugs that they approve for coverage the annual regimen has to be under a threshold of 50000GBP or it may not be covered by the NHS. But that 20000-50000GBP is per drug per person, someone could be on multiple drugs and treatments simultaneously for much more than that and they'll be covered.
n00b101 10y ago
> But how much do you value being alive? "the U.S. Office of Management and Budget puts the value of a human life in the range of $7 million to $9 million" [1] [1] https://www.theglobalist.com/the-cost-of-a-human-life-statistically-speaking/ https://www.theglobalist.com/the-cost-of-a-human-life-statis...

by drewrv 10y ago

koolba 10y ago

> Pricing based on value provided to the customer makes a lot of sense for phones and web apps and cheetos. > But how much do you value being alive? The "value" of a lifesaving drug is essentially unbounded, most people will pay anything to stay alive. That's one of the reasons healthcare is an edge case where the typical rules of capitalism don't work. > So yes, it is unfair to have some industries price their products based on "value". The problem with that logic is that taken to the extreme it means that everyone is entitled to every possible treatment, regardless of cost, and the rest of society must be the one that bears it. If a treatment exists to extend the life of a terminally ill person for 1 more day at a cost of $100K should the rest of us pay for it? How about $1M? The numbers are purposely ridiculous but it's not that far out of reality. At some point you need to draw the line and make the (not fun) decision of what's in and what's out. I'm convinced the bulk of this could be solved with some common sense planning: - Create an opt-in single payer plan at the federal level - Use the existing Medicare booking codes for identification and list prices for covered treatments (prices to be paid to service providers) - Service providers could opt in or out of the plans but couldn't do so on a per patient basis (i.e. similar to Medicare) - Only include medication and treatments that are out of patent protection - Only include medication that has at least N providers (was going to put three but may not exist for all generics) Anything else would be purely out of pocket and not covered by the plan. Fyi, that last one means that if we started today, you'd have access to everything up to approximately 1997. I'm not a doctor and honestly don't know much about the medical field, but I'm pretty sure that pre-1997 medications should cover the vast majority of healthcare use cases.

allenz 10y ago
Everyone knows single-payer would be great, but practically speaking we don't have the votes :( I'd also propose a ban on drug marketing, which would reduce about half the costs.[1] I don't think that excluding monopoly drugs will work. First, the industry has made significant progress in the past two decades, so for most major diseases, the leading treatment was patented within the last 20 years. Second, drug companies have little incentive to make direct competitors, and R&D effort is better allocated in areas with unmet medical need. Third, unpatented cures are already cheap, so by market size, almost all drugs are monopolies. Over a third of the $333B pharmaceutical market[2] can be attributed to: - Antibody drugs, $100B revenue and growing, almost all after 1997. E.g. Herceptin for HER2+ breast cancer, Humira for arthritis, Avastin for many cancers.[3,4] - The cure for Hepatitis C is patented until 2028, and currently has $20B revenue.[5,6] Disclaimer: I've worked in the industry. [1] http://blogs.sciencemag.org/pipeline/archives/2013/05/23/another_look_at_marketing_vs_rd_in_pharma http://blogs.sciencemag.org/pipeline/archives/2013/05/23/ano... [2] http://trade.gov/topmarkets/pdf/Pharmaceuticals_Executive_Summary.pdf http://trade.gov/topmarkets/pdf/Pharmaceuticals_Executive_Su... [3] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4622599/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4622599/ [4] http://www.prnewswire.com/news-releases/antibodies-market-north-americas-revenue-share-to-reach-44-in-2016-587799911.html http://www.prnewswire.com/news-releases/antibodies-market-no... [5] http://www.pharmacompass.com/patent-expiry-expiration/sofosbuvir http://www.pharmacompass.com/patent-expiry-expiration/sofosb... [6] http://www.pharmacompass.com/radio-compass-blog/top-drugs-by-sales-revenue-in-2015-who-sold-the-biggest-blockbuster-drugs http://www.pharmacompass.com/radio-compass-blog/top-drugs-by...
- koolba 10y ago
  I'm not saying there aren't any great advances. I'm saying it's an easy line to draw. That's vs picking and choosing what modern treatments are included. The HepC treatment, while remarkably effective, would bankrupt most healthcare programs if they were forced to pay the retail price.

refurb 10y ago

Go talk to the NHS. They value a year of healthy human life at 30,000 GBPs. And if you take your idea to the extreme, then every person should have access to every type of medical care regardless of the value offered?

drewrv 10y ago
Every society rations medical care, it's a finite resource. Sure, bureaucrats in some countries do a cost benefit analysis with human lives. That's unfortunate, but I believe it's better than what we do in the US. Here we ration medical care by patient wealth, which strikes me as dystopian.
huxley 10y ago
Most people won't know what you're referencing. https://www.channel4.com/news/drugs-life-breast-cancer-nice-20-000-a-year-of-life-nhs https://www.channel4.com/news/drugs-life-breast-cancer-nice-... https://www.nice.org.uk/news/article/kadcyla-too-expensive-for-routine-funding-on-nhs https://www.nice.org.uk/news/article/kadcyla-too-expensive-f... NICE (National Institute for Health and Care Excellence) sets the guidance on the QALY (Quality Adjusted Life Year) at between 20000-50000GBP for a year's worth of a single drug treatment. Of the drugs that they approve for coverage the annual regimen has to be under a threshold of 50000GBP or it may not be covered by the NHS. But that 20000-50000GBP is per drug per person, someone could be on multiple drugs and treatments simultaneously for much more than that and they'll be covered.

n00b101 10y ago

> But how much do you value being alive? "the U.S. Office of Management and Budget puts the value of a human life in the range of $7 million to $9 million" [1] [1] https://www.theglobalist.com/the-cost-of-a-human-life-statistically-speaking/ https://www.theglobalist.com/the-cost-of-a-human-life-statis...