Monthly Archives: July 2015

New drugs for Hepatitis-C – Cost-effective but too costly?

Until a few years ago, people infected with the Hepatitis-C virus (HCV) were in a bad way.  Treatments were available, but they included interferon which had nasty side effects.  Most patients experienced fatigue, headache, and muscle aches. A third or more had nausea, fever, depression, irritability and insomnia.  Even worse, cure rates averaged under 60%.

But then there was a major clinical breakthrough.  Gilead Sciences introduced a new drug –Sovaldi (sofosbuvir) – that provided cure rates of 95%.  While most patients had to take Sovaldi with interferon, many could be treated with an interferon-free regimen that avoided most side effects.  A year or so later Gilead introduced an improved product – Harvoni – that consisted of sofosbuvir and ledipasvir.  With Harvoni almost all HCV could be cured by a single 12-week, interferon-free regimen.  What a drug – ultra-high cure rates and minimal side effects.

But, as with most things in life, there was a down side.  The drugs are expensive.  The list price for the recommended 12-week treatment is $84,000 for Sovaldi or $94,500 for Harvoni.

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How do retail pharmacies make money?

Retail pharmacies, despite the fact that they face high competition, low reimbursement rates, and limited-to-no control over their pricing, continue to be profitable.  Census data  quoted in the Drug Channels blog indicate that gross margins in retail pharmacies have actually increased over the last few years.  Data from the NCPA Digest indicates that most independent pharmacies continue to be profitable. But how do they do it?  My calculations, using publicly available sources, indicate that pharmacies are probably taking a loss on most prescriptions that they dispense.

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DrugAbacus – a tool for estimating the value of cancer drugs

Do cancer drugs provide good value or are they overpriced?  Last week’s post discussed the value framework introduced by ASCO for evaluating the value of cancer drugs.  This week we will look at another approach to estimating  the value of cancer drugs – the DrugAbacus interactive tool  developed by Sloan Memorial Kettering Cancer Center.    According to a recent Wall Street Journal article, Dr. Peter Bach developed DrugAbacus “to get drug makers, insurers, doctors and patients talking about the factors that should determine price” and to develop “a value-driven system for pricing cancer drugs”.  A screenshot of the tool is shown below.

drugabacus screenshot

 

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