What Should Drug Makers Really Charge

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One of Americas top cancer treatment centers is challenging the pharmaceutical industry to adopt a more logical approach to drug pricing.
Memorial Sloan-Kettering Cancer Center in New York has developed an interactive calculator that compares the cost of more than 50 cancer medicines with what the prices would be if they were attached to the factors such as the side effects the medicines will have, and the time frame of extended life they provide for patients. In various cases, the website determines a price that is lower than the drug market value.
The project, is being headed by Peter Bach, a physician and director of the hospital’s Center for Health Policy and Outcomes, is the most current salvo from physicians and others against the rising cost of cancer medicines, which increasingly carry price tags of $100,000 or higher per patient for a year or a course of treatment. A colleague of Dr. Bach’s at Memorial Sloan Kettering recently went off highlighting the fact that cancer medicine prices as excessive in a speech prior to thousands of cancer doctors at a meeting in Chicago.
In an interview, Dr. Bach stated prices for various new cancer drugs do not reflect their value to doctors and patients.“Right now, manufacturers have total price control, and total control of prices has led to irrational pricing behaviors,” he stated.
To model what he identifies as “value based” pricing, Dr. Bach developed the “DrugAbacus” research tool, which he assumes will get drug makers, insurers, physicians and patients discussing the factors that should determine price.

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