[FoRK] Accidental theorist lost, wanted back

J. Andrew Rogers andrew at ceruleansystems.com
Thu Jul 16 18:03:29 PDT 2009


On Jul 16, 2009, at 4:41 PM, Stephen Williams wrote:
>
> I would go for a system where specialty, very expensive drugs have a  
> reasonable base price and a monthly payment if they are successful  
> (anti-cancer, etc.).  If and when it doesn't work, the drug  
> companies do not profit (as much).


Eh?  Have you thought through the economics of this?  The profits on  
pharmaceuticals as a class are far from being so spectacular that the  
cost of something like this could be buried.

Suppose you do have an anti-cancer drug, which like most anti-cancer  
drugs only has a modest success rate, let's say 20% for the sake of  
argument.  You have just cut the pool of people amortizing the very  
high development costs by a factor of *five*, correspondingly  
increasing the drug cost to the survivors by a factor of five.  Maybe  
with your "reasonable" base price it only costs the survivors four  
times as much as it would have cost if the costs had been evenly  
distributed over cancer patients.

And what about those cases where the anti-cancer drug may or may not  
work well but the person survives due to an alternative therapy?  What  
constitutes a failure such that the pharmaceutical company doesn't get  
paid.

Most drugs, particularly the specialty expensive ones, rarely have  
anything even approaching a 100% success rate.  All you've done is  
greatly increase the cost that must be absorbed by the people for whom  
it works.

This just looks like a way to increase the risk for pharma companies  
even more.

J. Andrew Rogers



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