JAMA Forum: We cannot all have it all–The economic limits of pharmaceutical innovation

My latest JAMA Forum post is out. Here’s an excerpt:

A $1 million pill that extended life by 10 years would be considered cost-effective, but to provide it to every American would require an expenditure that is equivalent to more than 1000 years of US drug spending. It would be both painful and difficult to deny such a pill to patients who could not afford it. But alternative methods of rationing are perhaps even less palatable. Such are the financial, political, and cultural limits of our ability to manage spending for expensive, effective medicine.

In fact, we may have already have reached the point of confronting the fact that we cannot all have it all. New, expensive drugs for hepatitis C—Viekera Pak, Sovaldi, and Harvoni—severely stress budget-constrained programs like Medicaid and the Veterans Health Administration. Even at the steep discounts those programs receive, these treatments—though cost-effective—are indicated for such large populations that their aggregate cost would overwhelm budgeted resources. The day that life-extending $1 million “miracle” pill arrives (or the precision-medicine equivalent of a collection of drugs), we may look back on the current hepatitis C treatment funding problems nostalgically. As innovation continues, drug pricing and budgeting problems will only get worse.

Go read the rest.


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