Saturday, February 23, 2013

New Breast Cancer Drug but at What Cost

The FDA approved Kadcyla for late stage breast cancer treatment. This is a good thing. Its about time.  And it will save many women's lives.

But I have a real problem with the financials behind it. A month's treatment costs $9800 or $117,600 annually, which apparently is about twice the costs of Herceptin. These costs will mostly be covered by insurance - and we wonder why insurance premiums are going up.

Immunogen, who developed it, expects to receive a $10.5 million pay off plus royalties of 3-5% of the expected world wide sales of $2 billion (with a b). To my tiny math brain, that means they get $60,000,000 (that's 60 million if you are having problems with all the zeros).

It will be marketed by Genentech who I assume will take in the rest of the profit after coming up with snazzy packaging and fancy ads. I have no idea what Genetech's manufacturing and promotional costs will be but I am sure their profits will exceed that of Immunogen.

But that's okay because the insurance companies will probably cover most of it - which is why our medical costs keep increasing so rapidly.

Going back to when I blogged about pricing and how it is determined by marketing people, I am sure the whopping price tag was set by marketers (those evil people) who wanted it to be high end, represent a last chance for women to extend their lives, and if its expensive it must work really, really, really well.

But at least it is finally available for the women who need it who will gladly pay any price to extend their lives. Call me cynical, but maybe I am.

1 comment:

Anonymous said...

Hi, the latest issue of Time magazine has an article about health care costs you will want to read.
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/11/


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