Friday, April 26, 2013

Doctors getting on the cost bandwagon

I have long been whined commented on the high price of medications. I find the high price of new medications combined with the laughable rationale given by the drug manufacturers ridiculous.

Not to put a dollar value on a human life, but a drug that costs upwards of $10,000 per month and may extend life only a few months, is crazy. You can say that few actually pay the full price but we all pay the prices in the form of higher insurance premiums.

A group of more than 100 doctors, mostly oncologists, from fifteen countries, have banded together to blast the high cost of cancer care.

"The doctors and researchers, who specialize in the potentially deadly blood cancer chronic myeloid leukemia, contend in a commentary published online by a medical journal Thursday that the prices of drugs used to treat that disease are astronomical, unsustainable, and perhaps even immoral.

They suggested that charging a high price for a medicine needed to keep someone alive is profiteering, akin to jacking up the prices of essential goods after a natural disaster."

I like the word 'profiteering' for this price gouging. I mean, how do you justify these prices? If you do a cost benefit analysis as a typical business model, the company pays researchers for years to come up with the drugs. If you say 10 researchers at $100,000 (for easy math) and ten assistant researchers at $50,000 plus $500,000 in equipment for ten years, that would work out to $2 million a year or $20 million total. I know my math is not perfect but you get the idea. Even if I am off by a scale of 10 and the costs are $200 million for ten years of research. 

Then take a drug that costs $10,000 per month being taken by 5000 patients that is (pause while I find a calculator) $50 million per month in income. Or in four measly months, they have made back their $200 million. 

And even if my costs are off by another factor of ten and we are looking at total costs of $2 billion, they would still get their money back in forty months, or just over three years. Or if the drug is taken by 10,000 patients, they would get their money back in 20 months, or just over 1.5 years.

But I have digressed WAY OFF track. My point is I can't find any justification for the pharma industry's claims of high costs. And now the doctors are claiming them to be profiteering as well. Maybe we need a congressional inquiry - no that would be all sorts of waste of government dollars - but we do need something to make this price gouging end.

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