Since the robot’s introduction, academic medical centers (university hospitals) train their surgical residents almost exclusively in its use. Gone or going are the more traditional methods. Unless patient expectations change or expanded competition is permitted, this will ensure that the manufacturer sees a large revenue stream for decades to come.
The result: This device will drive up health care costs significantly in the future, while clinical outcomes remain relatively unchanged.
Minimally Different Drugs Launched At Maximum Prices
Even when a new product is essentially the same as an old one, manufacturers use their patent protections and market control to drive up revenues. A great example is an injectable drug for a medical problem called “wet macular degeneration.”
Manufactured by Genentech, Avastin is an FDA-approved drug for cancer treatment. It slows the growth of new blood vessels that feed a tumor.
A while back, a thoughtful group of ophthalmologists recognized that if this drug could limit blood-vessel proliferation to stop tumor growth, it might also be useful in slowing the overgrowth of blood vessels inside the back of the eye – the cause of wet macular degeneration.
These physicians tried injecting a very small dose of Avastin at about $60 per treatment with excellent clinical results.
But here’s where it gets interesting. Genentech recognized the same opportunity at about the same time. And instead of recommending Avastin as an effective treatment, Genentech created Lucentis, a new drug with a biologically active component identical to Avastin.
Once Genentech received FDA approval, it priced Lucentis at $2,300 a dose, never showing that it was superior to Avastin at $60 a treatment.
Ophthalmologists across the country were outraged. Adding insult to injury, Genentech tried to embargo sales of Avastin for non-oncology practices. Not surprisingly, when the National Eye Institute tested Lucentis against Avastin, it found essentially no difference for a drug priced 40 times higher.
Change Is Possible, Not Easy
There are legitimate reasons why some drugs and devices are very expensive. But it’s common for manufacturers to hike up prices even when the magnitude of improvement is minimal.
If we’re serious as a nation about making health care more affordable while increasing quality outcomes, we’ll need to rein in these practices.
We can begin by demanding that drug companies disclose the true cost of development as part of the FDA approval process. Regulatory agencies could then use that information to evaluate the appropriateness of the price.
The FDA could also require all new agents and devices to be tested against existing approaches so that pricing and incremental value can be measured. Finally, we can make all of this information available and transparent to patients, so they can make the best decisions for themselves.
Health Care Is Different From Retail, Needs To Be Treated As Such
Outside of health care, people can choose whether to pay inflated prices for a patent-protected technology or minimally better products. But patients don’t have that same choice – at least not without facing potentially serious health consequences.
No doubt, patent protection for drugs and devices needs to protect the company and the investments it has made. But their economic gain must be balanced against a certain level of social responsibility. Unfortunately, that balance doesn’t exist today and change will be hard to accomplish in this current political environment.
Elected officials receive large campaign contributions from “Big Pharma,” preventing legislative change. Hospitals hype new technologies to attract more patients, even when the benefit is marginal and cost is exceedingly high. And at the first sign of resistance, drug companies spend millions on direct-to-patient advertising while continuing to wine and dine doctors (even with the implementation of the Sunshine Act, which is designed to prevent these practices).