Pricing Human Lives…And The Drugs That Save Them
By Ed Miseta, Chief Editor, Clinical Leader
What is the life of a child worth? $1 million? $10 million? What about the value of a prescription drug that is necessary to save that life? $100? $1,000? If we believe a human life is worth millions, is it fair to say that a price of $10,000 to save it is reasonable? What if the price rises to $100,000?
As professionals in the pharma industry, this is the type of question we seem to be faced with on a daily basis. Some items are easy to put a price on. Most of the products we use on a daily basis have a price determined by the manufacturing cost plus a profit markup. When you talk about a drug that took 14 years and billions of dollars to produce, the question of price becomes a bit more difficult. That conversation is complicated further when the product in question can ease human pain and suffering, or perhaps even prolong a life.
I remember one of my economics professors once telling me that only an economist would argue that a zero percent infant mortality rate is a bad thing. No, economists do not want children to die. But economists do know, probably better than anyone else, that every decision has both costs and benefits, and both must be considered when making a decision. If we can reduce the infant mortality rate to zero by paying $1 per child, I’m sure everyone would agree we should. But what if the cost is $10 million per child? Would anyone argue that we should still do it, regardless of the cost?
For most products, the purchase decision is easily made by the consumer. The buyer decides whether or not the value they receive from a product is worth the price. That decision is made more difficult when the product is considered a necessity, such as gasoline, electricity, food, or prescription drugs. In pharma, the decision is further complicated by the fact that the user is not the one paying the bill, and will oftentimes not even know the cost of the medicines they are taking. For most prescription drug users, the cost is simply the co-pay they have to fork over. The rest is covered by an insurance company.
What Is A Life Worth?
I’m always intrigued by people who argue that you cannot put a price on human life and that any action that will save lives should and must be undertaken. For those folks, it’s as if scarcity doesn’t exist. While it sounds like a noble idea, it is clearly not what we do. We know, for example, that lowering the interstate speed limit from 70 miles per hour to 55 will save lives. Although we did that at one time, many states have now increased the rate to 70. We know more people will die, but the benefit of drivers arriving at destinations quicker must outweigh the additional lives that will be lost. Clearly we can and do put a price on lives.
One article I found online attempted to determine the cost of a human life. Turns out the Office of Management and Budget puts the value of a human life at between $7 million and $9 million. The Environmental Protection agency has set the value of a human life at $9.1 million, while the FDA has set it at $7.9 million. The Department of Transportation quotes a figure of $6 million. The World Health Organization even got in the value game, placing the value of an extra year of life at $50,000 to $150,000, depending on your country of residence.
Seeing this information leads to an even more interesting question: If a human life is worth $8 million, how much should we be willing to pay to protect it? $8 million? $1 million? $10,000? Consider this: There was a credible threat of terrorist activity over this past July 4th holiday. If New York City felt it was reasonable to spend just $100 to protect each of the multi-million dollar lives of its inhabitants, if would have had to spend over $8 billion on the effort. Hardly a cost-effective expenditure.
Placing The Blame
This brings us back to the topic of the cost of prescription drugs. No one is ever willing to put a price on the life of a sibling, spouse, or child, noting the value of such lives is incalculable. Until, of course, a new and expensive treatment is needed to save that individuals life. Then, it seems, price is an easy topic to broach. Suddenly we are fine with arguing over the $1,000 price tag of a life-saving drug for someone whose life was worth $8 million just seconds prior. Spend $10,000 to save $8 million? Seems like a no brainer to me.
The main problem, of course, is drug prices and insurance companies. Some life-saving drugs are so expensive as to be out of reach to most low and middle class workers. Most folks are also happy with their insurance companies as long as they are picking up the tab for medicines. It is only when those same companies refuse to pay for a treatment that people turn on them.
Of course when the price of a medicine is out of reach, and the insurance company refuses to pay, someone will suffer. When that happens, we have to put the blame somewhere. Unfortunately, the “greedy” company that just invested 10 years and billions of dollars to produce the medicine will often be a convenient target for patients and the media. According to them, the treatment should be sold for a more manageable $20 per month, no matter that it required an investment of billions.
Are Clinical Trial Professionals The Solution?
There a few facts we can all agree on. The first is that people are living longer. The incidence of disease is also more prevalent in older citizens than younger ones. Finally, the great scientific minds in our pharma and biotech companies are discovering new medicines every day that were not available just a few short years ago. Unfortunately, the cost of discovery is more expensive than it has ever been.
It’s time for everyone to stop blaming the life science companies for the cost of drug discovery, and the resulting high prices of medicines. We have to collectively recognize that some drugs will be incredibly expensive to manufacture, and will require a costly price in exchange. Scarcity, as well as supply and demand, will exist regardless of how desperately a medicine is needed. Individuals, governments, and even insurance companies all have a limited amount of money to spend. Therefore, we need to make sure our healthcare dollars are being used in the most beneficial manner.
So how do we start to make better informed decisions on medicines? First, I think we have to make the distinction between whether the drug will cure a disease and/or save a life (such as Sovaldi) versus one that will alleviate symptoms or simply prolong a life by a certain amount of time (i.e. many cancer treatments). If the drug is merely prolonging life for a patient, we should also be looking at the quality and quantity of the additional life being provided (for example, a healthy, pain free existence versus living under the pain and sickness of a chemotherapy regimen). The age and health of the patient should also be considered. After looking at all of these factors, we can make better decisions about the benefits of treatments and the prices that should or shouldn’t be paid. I’m sure this will inevitably cause some to scream about death panels, but in any medical situation, difficult decisions have to be made.
While I am always a proponent of life, any patient of legal age and of sound mind, who is terminal and in an incredible amount of pain, must be able to have a say in their treatment options, and even whether or not they choose to receive treatment at all. Living wills would go a long way towards helping doctors make decisions regarding treatments, and need to be promoted. If we can remind people about organ donation every time they renew their driver’s license, there should be an easier way to stress to them the importance of having a living will as well.
Finally, I think we can better harness the information we have available from trials. The people who might be in the best position to understand the effectiveness of a drug, its impact on a patient’s life, the quality of life the patients are experiencing, and even the impact on family members are the clinical research professionals themselves. They work with patients on a daily basis, have conversations with them, and obtain quality of life information that doesn’t necessarily make it into reports and databases.
I don’t know who will eventually be responsible for the difficult decisions that will need to be made regarding quality of life and what medicines should be covered, but if patients, doctors, the government, and insurance companies will all be participating in that discussion, I hope clinical research professionals will be as well.
I recently saw that Vertex Pharmaceuticals received FDA approval on a drug that is designed to counteract the underlying genetic defect that causes cystic fibrosis. This is a drug that could make Vertex profitable, which is welcome news to a company that has lost billions over its 26 year existence. The cost of the drug? $259,000 per year. Unfortunately, the decisions we will have to make in the future will not get any easier.