> Either type of treatment is likely to cost insurers half a million dollars or more if they reach the market.
Can someone more familiar with the pharmaceutical industry explain this?
Books similarly aren't priced based on the cost of printing and distribution.
The cost is directly related to recouping R&D costs as well as the clinical trials. In addition, with these therapies specifically, you actually have pay lots of highly trained people to administer them in the first place.
Marketing is a red-herring. Sales and marketing should bring in more money than you spend on them or they're not worth doing. They exist to drive money This makes the company more profitable in the near term than R&D expenditure which can take decades to materialize.
In a universal donor scenario, the T-cells are engineered, error corrected and tested once. From there, they can be multiplied pretty cheaply. Most of the cost is in the initial engineering.
In a patient cell scenario, each individual patient's cells must be engineered, tested and delivered. This is obviously much more expensive.
A very crude computer science analogy would be the difference between scaling up a load balanced application relative to adding a new server from bare metal without automated scripts.
Why the treatment would cost half a millions dollars at the market is outside of my purview, so I'm eager to get an explanation as well.
Some of it also goes to pay for the R&D of other drugs that never make it to market.
https://www.google.com/amp/s/www.washingtonpost.com/amphtml/...
So if pharma companies cut out all of their sales and marketing, they'd have even less revenue than they do today. And that would lower R&D spend.
I don't have much knowledge of the subject but a stem cell/bone marrow transplant seems to be a common treatment in aggressive cases of leukemia.
Even mention not paying for something in the US and holy hell happens. Even Medicare and Medicaid can't say no for the most part.
If American's want cheaper healthcare they are going to have to get used to having less of it and not get all the fancy new technology right away.
No, clearly it's not.
I work for a startup that's delivering health services. Insurance companies have a very high bar for what they cover.
They are very conservative about covering new therapies. There's a lot of snake oil in medicine (acupuncture, homeopathy) and they don't want to pay for what doesn't keep their members healthy.
Compare drug coverage in the US vs. Canada or the UK. New drugs are often covered immediately post-FDA approval in the US. Heck, look at Exondys 51 for Duchenne's. The FDA barely approved it and pretty much every US insurer is paying for it. That doesn't happen in other countries.
A great example is the diabetes drug called Jardiance. It has better efficacy than older drugs and every US insurer covers it. It's not covered in many Canadian provinces.
And insurance companies can't throw drug company officers in jail.
There are many governments in the world. If one government plays hardball with a drug company, drug company can go find a different government, or negotiate with private insurers in that same country. Yes, private insurers exist even in countries that provide basic healthcare to all their citizens. [0]
> And insurance companies can't throw drug company officers in jail.
Show me where this has happened. This scaremongering and black-ops has nothing to do with the practice of negotiating price. There are many people that wish Martin Shkreli went to jail for gouging AIDS patients, but that's not happening.
0. http://thehealthcareblog.com/blog/2012/01/16/the-awkward-wor...
Most drugs never make it past phase 3 trials, so fail in R&D before marketing.
Gilead didn't need a lot of marketing for its HepC cure to become a blockbuster and propel them to be the 6th biggest pharma.
DTC is also illegal in all countries except the US and NZ, so it's not even possible to spend that much. Sunshine Act in various countries, China putting execs in jail, etc. The world has moved on.
You can sell 1 million pills, at a cost of $5 each. That's a 5 million profit. Or, you could spend 80 million in marketing, and sell 2 million pills, at the cost of $43 each. That's a 6 million profit.
This is absolutely not beneficial to the first million customers.
Also, consider that the United States is the only country in the world that allows direct-to-customer medical marketing... Which is one of the reasons why the cost of healthcare is so damn high.
Drug companies don't increase the price to pay for marketing. Prices are set based on what the market can bear. A small drug company that decides not to spend a lot on marketing is going to charge the same as a big company that does spend on marketing.
How the math works is as follows:
$5/pill; 1 million pills sold with no marketing = $5M profit
$5/pill; 2 million pills sold with $3M in marketing spend = $7M in profit (66% ROI on marketing spend).
AKA the price tag on a service is usually much more than the cost of goods sold.