Pricing and Pharmacoeconomics

Last week’s (April 12th) blog post was an overview of the highly idiosyncratic nature of the pharmaceutical marketplace and the pricing of pharmaceuticals. Today’s The New York Times carried a front page story by Andrew Pollack, The New York Times biotechnology industry reporter, about how doctors may increasingly be influenced by treatment costs when advising patients.1 Interestingly, while the focus of the article is on the general impact of health care costs on physicians’ decision-making, other than a passing mention of MRIs, the only other examples of cost are drawn from the world of pharmaceuticals– Avastin vs. Lucentis for macular degeneration, Aloxi for chemotherapy-related vomiting and, everyone’s favorite target of late, Solvadi for Hepatitis C. Pollack’s article also discusses the decision by some physician groups, such as the American Cardiology Society (ACS), to rate the value (that is economic value) of treatments in their joint clinical practice guidelines and performance standards. The article notes that the ACS committee that wrote the new policy recommended using QALYs (quality adjusted life years, a widely used standard in health economics) as a principal metric in measuring a treatment’s cost effectiveness. So, given the continuing public attention to pharmaceutical prices, this week I will briefly discuss pharmacoeconomics, which should have, but only in some cases does have, an effect on pharmaceutical prices.
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