What is the fairest price for a medical drug?

QALYs (0.00 / 0)

I think QALYs are a fantastic concept. The controversy over QALYs could be considered a frontier of the debate of utilitarianism actually.

Honestly, though, I can't think of any better way to decide the value of drugs than with a well-done QALY system.

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by: theduffman @ Fri Aug 22, 2008 at 19:28:03 PM CDT

Cost-effectiveness (0.00 / 0)

I'm not sure what the best way is to determine drug prices (that question might involve some nontrivial economic theory and empirical data), but I do think cost-effectiveness should (as always) be the major concern. (This view is itself controversial and perhaps not widely held.)

My reaction to the 30,000-pound figure is to think about the numerous Third-world health interventions that can save lives for around $1,000 each. Some studies have found certain population-based health interventions to cost just a few US dollars per DALY.

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by: Alan Dawrst @ Fri Aug 22, 2008 at 23:22:46 PM CDT

third world DALYs (0.00 / 0)

While saving 3rd world DALYs through health spending is important, it does have disadvantages:

> sending health dollars overseas is establishing worldwide socialism. On a per-dollar basis, more value can be achieved in poorer populations. We already know that. But excluded from the figure is our understanding of incentive.
> portions of the 3rd world are overpopulated and structurally defective. Health spending may not provide long-term help in the same way that education will.
> national populations of the western world largely believe in charity starting at home. However, the western world believes in a lot of things and I guess it's a challenge to sway them otherwise.

In fact, this little analysis has forced me to rethink my emphasis on QALYs... They're a very good thing, and I reject the idea that they're nasty because they dehumanise. However, I acknowledge that I don't know how well they will cover long term effects.

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by: theduffman @ Sat Aug 23, 2008 at 08:37:44 AM CDT

[ Parent ]

Free market capitalism (0.00 / 0)

The QALYs are interesting, but the heart of the matter is: if you make a drug and I want it and I'm willing to pay a certain price for it, and you're happy with that price, that should be the price.

It may not be a popular thing to defend, but drug companies make products that, for the most part, we need. If we don't need them, we want them. They won't make them if they don't make a profit. The best research scientists in the world don't work without being paid.

That being said, there's no reason that true free market capitalism leads to the current situation we have today. Au contraire. Multi-national companies are able to get drugs approved due to connections and lobbying national governments, while small competitors don't even have a hope of trying in the first place even if they have a good drug.

Let's say there's a better drug than this kidney treatment out there, which will give you two more years of life at half the price. It's not developed by Glaxo or Merck, but me. Even though it's better and consumers want it, I wouldn't have a hope of getting it approved by the NHS or the FDA or anyone else. I wouldn't have the money to meet the regulations even if clinical trial results are outstanding, and I would probably have to sell it to one of the large companies. That's not a competitive market. There's virtually no reason or incentive for a new company to come along.

The problem with the situation as described in the Economist is we have a middleman getting into the equation of "do you have a drug for a price I'm willing to buy it at"? The NHS may not want to buy it, but I may want to buy it on my own or buy it through private insurance. When that has happened, the NHS has denied care to those who receive non-NHS-approved drugs even if the patient or private insurance is paying for the drugs, as in, they must leave the NHS hospital and their NHS doctor and go to private care altogether.

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by: midnightsun @ Tue Nov 25, 2008 at 17:26:56 PM CST

Re: Free market capitalism (0.00 / 0)

So long as there's more than one company producing a drug for each condition and no cartel, it's still competitive. There doesn't need to be incentive for a new company. There just needs to be incentive to be better than the other companies.

It's not just getting the drug approved. Making drugs is a pretty hit-and-miss thing. Every once in a while you get one that works. Of those, every oncein a while you get one without horrible side-effects. Even if you took the FDA out of the equation, you'd still probably have to sell it to a big company, and doing so would still be very problematic. Considering the insurence companies would have to know what drugs they could buy, it's likely that one or two privite versions of the FDA would form.

Does anyone know what FDA-approval costs compared to R&D? I think they should probably weaken the FDA, but without knowing that, I don't know how important that is.

I think they should change the system to make price-descrimination easier. If they can make a drug for a few cents, they should be able to sell it for that little to people who can only pay that much, without preventing them from recouping the costs of R&D by selling it for more to richer people.

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by: DanielLC @ Fri Dec 26, 2008 at 11:56:13 AM CST

[ Parent ]

Further References (0.00 / 0)

• Wikipedia: QALY
• Wikipedia: DALY
• WHO: DALY
• Bandolier: QALY
  

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by: Douglas.Reay @ Fri Jan 23, 2009 at 06:55:39 AM CST