Readers Write: How much Is 3-4 months of life worth?

Yuval Rosenberg and Michael Rainey, writing in the Fiscal Times say House Speaker” Nancy Pelosi’s bill to reduce prescription drug prices would save Medicare $345 billion from 2023 through 2029, according to a preliminary analysis by the nonpartisan Congressional office Budget Office.

This analysis looked only at one provision of the legislation: Its requirement that the federal government negotiate drug prices with the manufacturer of at least 25 of the most expensive prescription drugs and apply these negotiated prices to the private market as well.

 A separate analysis issued by actuaries at the Centers for Medicare and Medicaid Services found that the bill would lower U.S. spending on health care by $481 billion over a decade, including  $158 billion saved by households as a result of lower premiums and out of pocket costs, according to The Hill.

The article goes on to indicate that at the same time, a different CBO analysis also found that the legislation would have wide-ranging effects on the drug market- both in the U.S. and internationally-and would reduce pharmaceutical companies’ revenues.

As a result, manufacturers would cut spending on research and development, which would lead to fewer new drugs being introduced over time.

Cassandra Nemzoff and Kalipso Chalkidou, writing in the Center For Global Development, point out that the U.S. Council of Economic Advisers issued a white paper on drug pricing implying that other rich countries should stop “free-riding” off American innovation by negotiating drug prices to unfairly low levels after the U.S. fronts the research and development costs.

In an election year, prescription drug prices become a major issue for the candidates to argue over and at the same time, allow the public to see how little some of them actually know about the subject. 

President Trump has his plan which centers on an “international price index” model. This proposal focuses on one part of Medicare, Part B, which covers drugs administered to patients by physicians compared to part D, which is nearly five times larger and covers drugs dispensed by pharmacies.

The president’s plan, projected to save $17.2 billion over five years would introduce an experimental plan to be tested in half the country with three approaches aimed at reducing the price of patent drugs by:  (1) externally referencing prices to 16 other high-income countries (2) introducing private vendors to aggregate volumes for negotiated discounts (3) separating the cost of drugs from physician compensation.

There will be objections to any and all parts of the president’s plan but it seems to offer some opportunities to build upon.

The biggest objection could be the plan while having the potential to reduce prices would only affect a small proportion of the $457 billion annual total since part B is only a piece of the puzzle.

The average American probably would not even see a saving when they have to pay for their drugs since only drugs covered by Part B Medicare are involved and most of us are covered under part D.

Nemzoff and Chalkidou make clear the differences in our system with others also from high-income countries such as the UK, Australia, Norway, Canada and New Zealand.

These countries set what they call a “willingness to pay” for a given unit of health, often defined as a “QALY” in the U.S., or quality of life. 

In short,  some countries base their allowable costs to be based on how much the patient could benefit in terms of an added life years, or quality of those life years versus other countries such as Germany, Japan and France that do their payments based on proven clinical value added to a patient’s life. 

Our system of healthcare is broken up into many pieces across both public and private sectors. Unlike its European and Canadian counterparts, Medicare is not allowed to negotiate prices, but the people in congress who voted for this rule may be thinking of changing their mind soon, and public and private payers alike must abide by market-distorting regulations such as covering all cancer products with FDA approval at the manufacturers asking price.

If your loved one has cancer and the new drug only promises three or four more months of life to your loved one, how much is that worth to you?

There is pressure on the EU and other markets including some lower-middle-income countries to pay more than they ought to be given the incremental benefits conferred by  this latest innovation, 

“Faced with increasing demand for innovative treatments, but lacking the bargaining power and the capacity to evaluate the value of these new treatments in their own setting, lower middle-income countries can succumb to pressure to introduce overly expensive, intensive treatments like South Africa recently did with a new breast cancer treatment in a system that has neither the capacity to screen. diagnose, intervene early  nor to provide adequate palliative care for advanced cases, the treatment was approved at too high a price,

Nemzoff and Chalkidou write that President Trump announced a proposal to bring down drug prices, but until the U.S. corrects the structural flaws in its own healthcare system, these efforts are bound to fall short.

I do not necessarily agree with the authors in their opinion as to what is a flaw in the system in the U.S. The authors claim we spend a disproportionate focus on the more profitable disease burden of the American patients.

This leaves a significant gap in global research and development investments for neglected diseases-those more prevalent in poor countries that do not attract pharmaceutical investments such as malaria, tuberculosis and diarrheal diseases. That is not a flaw in my opinion.

Why should my money be spent on diseases that are not “heavy hitters” in our country? 

Bert Drachtman

Great Neck

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