Pacific Standard is running a story that raises the issue of medical costs compared to the diseases they cure.
In the article they point out that a cure for Hepatitis C (HepC) with a new battery of drugs can be had in as little as 12 weeks for a lifetime cure.
For the first time, highly effective regimens were available without interferon. Treatment courses that used to last nearly a year have now been reduced to just 12 weeks in most cases. Side effects are so low that some patients who took these medications in research studies thought they were being given a placebo. Cure rates are now in the 90 to 95 percent range—not suppression, not control, not maintenance, but the cure of hepatitis C. This is a watershed moment for the over three million Americans, and many more millions abroad, who are infected.
The article explains that prior treatments could take almost a year, and had a cure rate hovering around 50%. Because of this, insurance companies usually refused to pay for the older drugs until the HepC became debilitating, and eventually degenerated into cirrhosis or cancer.
(About 80% of those exposed to the HepC virus develop a chronic infection, and experience minimal or no symptoms during the initial few decades of the infection).
Insurance companies will pay $11,000/month for cancer treatments, even for terminal patients, but balked at the price for the prior HepC treatments: the bill was around $70,000 for the 50% cure rate.
The new treatments, with 90-95% effectiveness could cost $84,000 per patient for the 12 week course.
(Note, that the actual cost study (pdf) quotes a range of $88,000 to $175,000, but PSmag often chooses their citations for effect rather than accuracy. Most patients would not require more than a single course.).
Since most patients are asymptomatic for decades, the study suggests, and the article asks, if the treatment cost is justifiable (in insurance company think), as opposed to waiting and treating the resultant cirrhosis or cancer.
Not addressed by either the study or the article is why does this course of pills (1 per day for 84 days) cost $1000 per pill. What percentage of that amount is recovery of legitimate developmental expenses and actual production costs? What percent is profit?
Also not addressed is how much does a 17-year patent window encourage this level of pricing. Could longer patent protection be (contractually) traded for cheaper pricing? Would shorter patent protection allow recovery of developmental costs? How fast will that price drop when competitors have their products approved?
(Score: 2) by takyon on Thursday October 30 2014, @04:24AM
The article says that the insurance companies have balked at the price of the old treatments as well as the newer, more effective treatments. That wasn't clear from the summary.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 3, Insightful) by davester666 on Thursday October 30 2014, @08:21AM
To further clarify the position of the insurance companies: "the insurance companies have balked at the price of everything."
(Score: 2) by bzipitidoo on Thursday October 30 2014, @11:50AM
And well anyone should balk at the price of medical care in the US. The medical community has charged prices ranging from outrageous to fantastically insane. Time magazine had an article, Bitter Pill, about this, and talked of these "chargemasters", which the medical community uses to hold price data in obscurity and secrecy. They prefer not to give reasons for the prices they set. They also try not to be up front about prices, hoping the subject doesn't come up, even as they ask patients to sign a blank check, promising to take full responsibility for all prices charged if insurance refuses to pay. If the patient asks, they give a variety of excuses why they won't tell patients any price information at all beforehand. Patients have to press them hard to get numbers. Evil telecoms monopolies only wish they could gouge customers like that.
I recently had a CAT scan. It wasn't full body, just the abdomen. I read that a CAT scan should cost about $250. The hospital asked for $9107.20. I am not sure of the exact number as it's bundled with everything else, but my Obamacare insurance cut them down to a still very high amount of about $2100, of which I owe 100%. Now I have to figure out my next move. Maybe if I wait a few weeks, then ask nicely the hospital will quote me a much lower price to settle accounts? Maybe I can haggle? Maybe I should hire a specialist to haggle for me?
(Score: 2) by fadrian on Friday October 31 2014, @01:01AM
This will be fixed the way it always is. The drug companies and insurance companies, via back channels, will negotiate a "reasonable" price. The drug company needs the money from the insurance company (more, rather than less quickly, because patents are a wasting asset) and the insurance company eventually has to buy the technology to reduce LT costs. The whole thing will be modeled financially and gamed politically by the parties. Expect playing of the game "chicken" for a while, followed by the drug company lowering costs while the insurance companies start allowing use of the drug for some patients so they can gauge the financial impacts and benefits that might accrue from using the drugs.
Eventually, either the "market" will determine the price, or the drug will be orphaned until its patent expires and the requisite post-patent game-playing is done with.
There are two sad things about this. First, the drug companies are the only ones who have to budge in this game. Supposedly, if enough people are affected by this and the insurers don't want to pay, the government has enough power to "broker" the negotiations. However, even that process is fraught with uncertainty and political thuggery. So it is quite possible that this drug will be orphaned for the next two decades. Which leads to the second sad thing.
In the end, this will not stop use of this drug by those who can pay. So we see the use of the patent as yet another tool for the rich vs. the poor in the class warfare that currently grips the nation.
That is all.
(Score: 4, Interesting) by physicsmajor on Thursday October 30 2014, @04:34AM
Patents are intended to protect innovation when there are, to quote the old adage, "many ways to skin a cat." For many medical therapies, this ends up just not working. The main reason really boils down to this (car analogy incoming).
Intended Patent: Specific method to make a car turn more efficiently. There are other methods to make a car turn, which are out of scope. This method wasn't obvious. It has some gains and may even be optimal.
Broken Patent: Obfuscated patent which "claims" the method of changing the direction of any moving object, which may or may not be carrying passengers.
If that isn't clear enough to anyone, consider if Edison patented "method and process to produce light from electricity" rather than his specific bulb.
In both cases, the former is a proper invention. It deserves protection, market use, and it will succeed or fail based on its merit. The latter is an attempt to corner an entire sector at once, crowding out all competition. It is reprehensible, it stands against the entire spirit of the system, and it should never have been granted.
Most software patents are of the second type. So are most drug patents.
Handing a corporation a monopoly over a flat-out cure for most patients should require stringent regulation of the corporation. Full stop. If those pills can be produced for $120 each, a three order of magnitude markup should mean a Congressional inquiry. I think this should be the case for all such government-granted monopolies, including telecoms and ISPs. Full yearly audits of finances, expenses, and an allowed margin which - if exceeded - the remainder must be re-invested into the infrastructure, not into management bonuses.
The flip side of the coin here is that - with proper oversight and management - the protection for cures could last longer, which means the significant R&D costs could be absorbed over a longer period. But this is only permissible in a hypothetical "15% margin" corp.
(Score: 1) by Whoever on Thursday October 30 2014, @04:50AM
Alternative cures (to avoid patents) run into another problem: the ethics of testing. How do you ethically give someone an untested drug, which may or may not work, when there is an existing drug that is known to work?
(Score: 2) by aristarchus on Thursday October 30 2014, @05:47AM
When you are not submitting to extortion? (There are some things that no one should make money off of: some of these are: Grandparents, war, medicine, death, education, government.)
(Score: 1, Interesting) by Anonymous Coward on Thursday October 30 2014, @09:40AM
I disagree.
Production of medicine would be a perfect fit for the free market if that market were not distorted by patents.
Now what about the price of research? Well, simple: Split the research from the production. That is, the one who researches it is not the one who produces it. The research gets publicly funded because public health is a public interest (a lot of it is publicly funded anyway). The results of that research should in return be free for everyone to use (currently the public pays most of the research, but a corporation gets the patent).
Let the free market work where it works best (without distorting it with patents), and publicly fund only the part for which the market doesn't work well.
(Score: 0) by Anonymous Coward on Thursday October 30 2014, @01:02PM
The public/politicians are just as short-sighted as businesses but without the profit incentive doing of high-risk high-payout research. How well does the public fund this type of research now?
(Score: 3, Insightful) by starcraftsicko on Thursday October 30 2014, @07:55PM
Which public? Funds Who? How?
The public has been divided into segments which are sometimes enclosed by lines on a map (USA, Russia, China, Czechland, Slovakia) and sometimes not (Catalan, Kurdistan, Sunniland, Tibet). These people, and others, do not get along. They are not interested in funding the public health of the other. And each will have reasons why another should pick up more of the bill if thrown together.
Yours is an example of an idea that could work in theory except for the need to apply it to humans.
This post was created with recycled electrons.
(Score: 2) by frojack on Thursday October 30 2014, @09:11PM
Now what about the price of research? Well, simple: Split the research from the production.
In this case, the ones who researched it were in fact the ones who produce it. There are two or three companies involved in the new drug regimen. They worked together and combined their patents and produced a triple-drug approach. Each of then had research and production costs to recover.
There are also other companies which may have products in this area hit the market in the first quarter of 2015. So these companies don't necessarily have a long term lock.
(Remember that HepC is almost always asymptomatic for DECADES. Patients and insurance companies can afford to wait 17 years till the patents expire. In my view, I believe that is exactly the message they are sending to the drug producers).
At the current prices virtually NOBODY can afford this treatment. The economist in me believes that had they cut the price in 4, down to 22K, I suspect they would get 1000 times the sales, simply because insurance would then cover it. So unless production costs are really that high, the price is simply unjustified both on economic and moral grounds.
No, you are mistaken. I've always had this sig.
(Score: 2) by kaszz on Thursday October 30 2014, @10:25AM
Because they help to produce a cure that is affordable for a lot of people?
(Score: 0) by Anonymous Coward on Thursday October 30 2014, @05:57AM
Hepatitis C is spread by dirty drug needles, sex, and dirty medical equipment, similar to HIV. Low tech methods can keep the disease from spreading.
(Score: 2) by GreatAuntAnesthesia on Thursday October 30 2014, @10:06AM
Yeah, and teen pregnancy can be avoided by kids not having sex. Let's restrict all sex education to "just don't do it" and see how that turns out...
Prevention is great and all, but at some point you have to accept that some people will give in to their urges and make bad life choices, and you have to have a plan to deal with the consequences, for the good of everyone. A good plan attacks the problem from all angles at once, not just the one that happens to suit one group's idea of moral behaviour. Yes, condoms and clean needles and reducing drug use and discouraging irresponsible sexual behaviour can and should be used against HepC, but they cannot be the only weapons.
But yeah, now we have a relatively quick and very effective cure for HepC, we can start down the road to eradicating it: Next step is to somehow identify all those people who don't realise they are infected and get them treated (and educated).
(Score: 2) by kaszz on Thursday October 30 2014, @10:23AM
Aha, don't do hospitals. Now I got it! ;-)
(Score: 2, Informative) by curunir_wolf on Thursday October 30 2014, @04:58PM
Most software patents are of the second type. So are most drug patents.
I don't think that's accurate. All the drug patents I have seen specify a very specific chemical composition. It doesn't even state the purpose for the compound or what it treats, because the patent comes before the efficacy studies required for FDA approval, and some drugs can be used for treatments not even envisioned at first (when doctors discover this, they write what is called an off-label prescription, which is prescribing a drug for as a treatment outside of FDA's approval).
The only variation I've seen to that is companies patenting a coating, for instance, for a drug that is losing patent protection. AstraZeneca did that for Prilosec, which lost its patent. To keep the price high, they used the same drug with a patented coating ingredient and called it Nexium. The active ingredient is the same, but their marketing claims the coating makes it better for heartburn. And, of course, the profits keep rolling in.
I am a crackpot
(Score: 2) by Aiwendil on Thursday October 30 2014, @10:15AM
It is right there in the summary.. as per the summary the symptoms are minor for the first couple of decades (ie: 20+ years) and the patent lasts 17 years. This basically tells the insurance company that it would be a lot cheaper to just wait for the generic version that will appear in 17 years and start the treatment then.
And this is when one assumes that "couple of" means "2", if it means more than it makes even less sense to pay now.
(Score: 1) by jmorris on Thursday October 30 2014, @05:50PM
Lets be even more impolite. Lets find out if I can get downmodded for unPC thoughts here as fast as the other place. :)
Go read the Wik article on HepC and see why the insurance companies do not want to pay. This is a disease that should not even exist. I really can't see how it ever propagated itself above replacement levels before the advent of 20th Century medicine and the IV drug abuse that rode in as a side effect. Well they stopped the innocent from getting this thing via the medical route decades ago with the exception of the poorest of the 3rd world who don't count. They ain't ever paying for any of these treatments, that is just a fact. Even after they become generic drugs they can't afford them, they got it because of hospitals that can't even afford the clean needles we give out for free to druggies here in the first world.
So now lets look at what an insurance company is looking at, shall we?
1. People who have had this thing for decades and aren't obviously sick. Why do they want to pay out upward of a 100K again? They aren't obviously sick, they almost certainly had it long before they were covered by their current policy and will very likely not exhibit serious symptoms before they have moved to another, quite likely by retiring and moving to Medicare.
2. People who have had it for decades and are now sick. Insurance is a gamble and they lost. Oh well, it is a numbers game and they will make it up on volume.
3. A new case. Again, go look at the Wiki article. The only transmissions left in the developed world are in lowlife IV drug users who can't afford or are two dumb to get the free needles. (And a really small number with really unsafe/unsanitary sexual practices.) If they are insured at the point of diagnosis, who cares! They are on a course almost certain to destroy their ability to hold a job that includes medical insurance long before they exhibit the sort of symptoms that would require treatment.
(Score: 0) by Anonymous Coward on Thursday October 30 2014, @02:51PM
You're forgetting the biggest slice, advertising. Way bigger than production or even development. Like by a factor of 4.
It's sickening, literally.