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Senior Member
Join Date: Sep 2005
Location: france
Posts: 1,648
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for unregistered, who couldn't see the complete article, it appeared in full elsewhere on the site so I just copied and pasted it, so here it is in full:
What price for health and drugs?
By Alex Berenson The New York Times
WEDNESDAY, FEBRUARY 15, 2006
NEW YORK Doctors are excited about the prospect of Avastin, a drug already widely used for colon cancer, as a crucial new treatment for breast and lung cancer. But many are cringing at the price the maker, Genentech, plans to charge for it: about $100,000 a year.
That price, about double the current level as a colon cancer treatment, would raise Avastin to an annual cost typically found only for medicines used to treat rare diseases that affect small numbers of patients. But Avastin, already a billion-dollar drug, has a potential patient pool of hundreds of thousands of people - which is why analysts say its U.S. sales could grow nearly sevenfold to $7 billion by 2009.
But doctors warn that some cancer patients are already being priced out of the Avastin market. Even some patients with medical insurance are hesitating before agreeing to the treatment, doctors say, because out-of-pocket co-payments for the drug could easily run $10,000 to $20,000 a year.
Until now, drug makers have typically defended high prices by noting the cost of developing new medicines. But executives at Genentech and its majority owner, Roche, are now using a separate argument - citing the inherent value of life-sustaining therapies. If society wants the benefits, they say, it must be ready to spend more for treatments like Avastin and another of the company's cancer drugs, Herceptin, which sells for $40,000 a year.
"As we look at Avastin and Herceptin pricing, right now the health economics hold up, and therefore I don't see any reason to be touching them," said William Burns, the chief executive of Roche's pharmaceutical division and a member of Genentech's board. "The pressure on society to use strong and good products is there."
Studies show that Avastin can prolong the lives of patients with late-stage breast and lung cancer by several months when the drug is combined with existing therapies. Genentech expects to seek government approval this year to sell it specifically for those diseases.
But even now, doctors who are prescribing Avastin for some breast and lung cancer cases are finding its cost beyond the means of some patients. "Avastin is a superb drug, but its cost is already discouraging patients and doctors from using it," said Dr. David Johnson, who heads the cancer unit at Vanderbilt University in Nashville, Tennessee. "I wish it were one-tenth the cost, and if it were I would be giving it to almost everybody."
With colon cancer, a year of Avastin treatment costs about $50,000. But the drug will be used at higher doses for lung and breast cancer, and Genentech does not plan to reduce the unit price, even though the additional cost of producing a higher dose is minimal.
Because Genentech is a leading developer of cancer therapies, some doctors also fear that the company's pricing plans for Avastin - around $8,800 a month - may encourage other companies to charge more for their own oncology drugs. That could potentially drive up the overall cost of cancer treatment to unsustainable levels, they say.
Right now, one of the few cancer drugs with a higher monthly price than the level planned for Avastin is Erbitux. The drug, used for colon cancer, sells for $9,600 monthly but is not as widely prescribed as Avastin and is typically used only as a last-resort treatment for a few months.
Dr. Susan Desmond-Hellmann, the president of product development of Genentech, which is based in California, said the company had set Avastin's price based on "the value of innovation, and the value of new therapies."
Genentech intends to file an application this year with the U.S. Food and Drug Administration to expand the Avastin label to include treatment for breast and lung cancer. While nothing prevents doctors from prescribing Avastin for those diseases now, FDA approval would let the company promote and advertise the drug it for such treatments and make insurers more likely to pay for treatments.
For now, insurers are deciding case by case whether to cover Avastin for breast and lung cancer, and in many instances they are rejecting coverage or at least delaying decisions.
In those cases, patients must sign a waiver agreeing to reimburse the hospital for the price of treatment if the insurer will not agree to do so. And some patients are afraid to sign the waivers, Bunn said.
So far, insurers are generally covering Avastin's use in colon cancer, and they say they will probably cover its government-approved use with other cancers.
Avastin is used mainly in cases of late-stage colon cancer, a disease that affects about 50,000 people a year in the United States alone. On average, patients take the drug for 11 months and their lives are extended an 5 months compared with other treatments.
Genentech and Roche are also testing Avastin for use in earlier stages of colon cancer and lung and breast cancer. Genentech and doctors hope that if the drug is used earlier in treatment it can extend lives much longer - although that would require patients' finding the means to pay for it longer, too.
This week Roche stopped recruiting patients for one clinical trial that included Avastin, while researchers try to explain the deaths of several patients. But doctors generally view Avastin as one of the safest cancer treatments. About 200 clinical trials including Avastin are taking place worldwide.
With Avastin's expanded use, analysts expect the drug's sales to soar to $7 billion in the United States alone by 2009, compared with $1.1 billion last year. Over the same period, Genentech's overall profit is forecast to triple to $4 billion in 2009. Sales, which were $6.6 billion in 2005, are expected to climb to $18 billion.
"They are certainly blazing new ground with the price of the drug," said Geoffrey Porges, an industry analyst at Sanford Bernstein.
Yet the high prices are especially discouraging for patients who have been told that the new drugs may have only marginal benefits for them.
Ellis Minrath, who has pancreatic cancer, said he had chosen not to take Tarceva, a drug from Genentech that is approved for lung cancer and has shown promise in pancreatic cancer. He did so after learning that it would cost him about $1,000 a month in co-payments, even though he is covered by Medicare.
"If anybody came out and said, 'This is the stuff. You want to get well, find a way to buy it,' that would be one thing," said Minrath, who is 87. "But that isn't the case. The forecast of how much it's going to do is not that wonderful."
But Desmond-Hellmann, the Genentech product development chief, said she would recommend Minrath be treated with Tarceva. "I don't think any patient should go without a Genentech drug for an inability to pay," she said.
"If this is about money, that would disturb me."
NEW YORK Doctors are excited about the prospect of Avastin, a drug already widely used for colon cancer, as a crucial new treatment for breast and lung cancer. But many are cringing at the price the maker, Genentech, plans to charge for it: about $100,000 a year.
That price, about double the current level as a colon cancer treatment, would raise Avastin to an annual cost typically found only for medicines used to treat rare diseases that affect small numbers of patients. But Avastin, already a billion-dollar drug, has a potential patient pool of hundreds of thousands of people - which is why analysts say its U.S. sales could grow nearly sevenfold to $7 billion by 2009.
But doctors warn that some cancer patients are already being priced out of the Avastin market. Even some patients with medical insurance are hesitating before agreeing to the treatment, doctors say, because out-of-pocket co-payments for the drug could easily run $10,000 to $20,000 a year.
Until now, drug makers have typically defended high prices by noting the cost of developing new medicines. But executives at Genentech and its majority owner, Roche, are now using a separate argument - citing the inherent value of life-sustaining therapies. If society wants the benefits, they say, it must be ready to spend more for treatments like Avastin and another of the company's cancer drugs, Herceptin, which sells for $40,000 a year.
"As we look at Avastin and Herceptin pricing, right now the health economics hold up, and therefore I don't see any reason to be touching them," said William Burns, the chief executive of Roche's pharmaceutical division and a member of Genentech's board. "The pressure on society to use strong and good products is there."
Studies show that Avastin can prolong the lives of patients with late-stage breast and lung cancer by several months when the drug is combined with existing therapies. Genentech expects to seek government approval this year to sell it specifically for those diseases.
But even now, doctors who are prescribing Avastin for some breast and lung cancer cases are finding its cost beyond the means of some patients. "Avastin is a superb drug, but its cost is already discouraging patients and doctors from using it," said Dr. David Johnson, who heads the cancer unit at Vanderbilt University in Nashville, Tennessee. "I wish it were one-tenth the cost, and if it were I would be giving it to almost everybody."
With colon cancer, a year of Avastin treatment costs about $50,000. But the drug will be used at higher doses for lung and breast cancer, and Genentech does not plan to reduce the unit price, even though the additional cost of producing a higher dose is minimal.
Because Genentech is a leading developer of cancer therapies, some doctors also fear that the company's pricing plans for Avastin - around $8,800 a month - may encourage other companies to charge more for their own oncology drugs. That could potentially drive up the overall cost of cancer treatment to unsustainable levels, they say.
Right now, one of the few cancer drugs with a higher monthly price than the level planned for Avastin is Erbitux. The drug, used for colon cancer, sells for $9,600 monthly but is not as widely prescribed as Avastin and is typically used only as a last-resort treatment for a few months.
Dr. Susan Desmond-Hellmann, the president of product development of Genentech, which is based in California, said the company had set Avastin's price based on "the value of innovation, and the value of new therapies."
Genentech intends to file an application this year with the U.S. Food and Drug Administration to expand the Avastin label to include treatment for breast and lung cancer. While nothing prevents doctors from prescribing Avastin for those diseases now, FDA approval would let the company promote and advertise the drug it for such treatments and make insurers more likely to pay for treatments.
For now, insurers are deciding case by case whether to cover Avastin for breast and lung cancer, and in many instances they are rejecting coverage or at least delaying decisions.
In those cases, patients must sign a waiver agreeing to reimburse the hospital for the price of treatment if the insurer will not agree to do so. And some patients are afraid to sign the waivers, Bunn said.
So far, insurers are generally covering Avastin's use in colon cancer, and they say they will probably cover its government-approved use with other cancers.
Avastin is used mainly in cases of late-stage colon cancer, a disease that affects about 50,000 people a year in the United States alone. On average, patients take the drug for 11 months and their lives are extended an 5 months compared with other treatments.
Genentech and Roche are also testing Avastin for use in earlier stages of colon cancer and lung and breast cancer. Genentech and doctors hope that if the drug is used earlier in treatment it can extend lives much longer - although that would require patients' finding the means to pay for it longer, too.
This week Roche stopped recruiting patients for one clinical trial that included Avastin, while researchers try to explain the deaths of several patients. But doctors generally view Avastin as one of the safest cancer treatments. About 200 clinical trials including Avastin are taking place worldwide.
With Avastin's expanded use, analysts expect the drug's sales to soar to $7 billion in the United States alone by 2009, compared with $1.1 billion last year. Over the same period, Genentech's overall profit is forecast to triple to $4 billion in 2009. Sales, which were $6.6 billion in 2005, are expected to climb to $18 billion.
"They are certainly blazing new ground with the price of the drug," said Geoffrey Porges, an industry analyst at Sanford Bernstein.
Yet the high prices are especially discouraging for patients who have been told that the new drugs may have only marginal benefits for them.
Ellis Minrath, who has pancreatic cancer, said he had chosen not to take Tarceva, a drug from Genentech that is approved for lung cancer and has shown promise in pancreatic cancer. He did so after learning that it would cost him about $1,000 a month in co-payments, even though he is covered by Medicare.
"If anybody came out and said, 'This is the stuff. You want to get well, find a way to buy it,' that would be one thing," said Minrath, who is 87. "But that isn't the case. The forecast of how much it's going to do is not that wonderful."
But Desmond-Hellmann, the Genentech product development chief, said she would recommend Minrath be treated with Tarceva. "I don't think any patient should go without a Genentech drug for an inability to pay," she said.
"If this is about money, that would disturb me."
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