What Price Technology? At NYT Health Confab, It’s a Loaded Question

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the readiness of genomic testing and the premise of reduced costs in the future.

“I have to take exception to the notion that genetic diagnosis will lower costs,” said Drucy Borowitz, director of the Cystic Fibrosis Center at Women & Children’s Hospital in Buffalo, NY. “And it’s less clear than it’s ever been what’s a disease-causing mutation and what isn’t.”

Jeff Croke, a primary care doctor at the Palo Alto (CA) Medical Foundation, said he’s excited about pharmacogenetics but doesn’t trust the results of genetic tests.

Topol replied that ever-lower sequencing costs will lead to more people having their genomes sequenced, which in turn will fill in the links of gene variants to diseases. And if more tests are designed to link drugs’ effectiveness to people’s genetic profiles, there would be less money wasted on prescribing expensive drugs for people who won’t respond to them.

Studies have shown the effectiveness of many drugs can be profoundly influenced by a patient’s genetic makeup. These response rates vary, from a roughly 75 percent effectiveness for statins (prescribed to lower cholesterol) to roughly 25 percent for beta blockers (used to manage an irregular heartbeat) to 20 percent for cancer drugs.

Topol and others contend that sequencing a patient’s genome would help doctors dentify the drugs that would be most effective for patients with particular genetic variants.

Drug pricing was another major topic of conversation at the conference, with the hepatitis C (HCV) treatment sofusbuvir (Sovaldi) from Gilead Sciences serving as the poster child for exorbitant pricing. Gilead, which has taken a public beating from Congressman Henry Waxman and others, announced in December that sofusbuvir would cost $84,000 a year.

Marilyn Tavenner

Marilyn Tavenner

In the first Q&A session of the day, an audience member asked Marilyn Tavenner, administrator of the U.S. Centers for Medicare & Medicaid Services, about Sovaldi’s price. “Well, it didn’t take us long to get to that conversation,” she said wryly.

Later, William Haseltine, a legendary researcher and biopharma entrepreneur who now runs a nonprofit dedicated to healthcare access, delivered a withering assessment of his former industry peers: “I think [prices] are outrageous, and they can’t be justified by R&D costs,” which is a common explanation the industry and its supporters provide.

“It’s a failing business,” he said. “And when you’re failing there are two things you can do. If you have a monopoly market you can up your price. Or you can look for a tax break like Pfizer just did,” a reference to Pfizer’s aborted attempt to buy London-based AstraZeneca and gain tax advantages by moving headquarters overseas.

Gilead and Sovaldi took more pounding at the end of the day from two top health and public policy executives. Kaiser Permanente’s Sharon Levine, director and senior adviser for public policy, pharmacy and professional development, said that if Kaiser gave Sovaldi to every HCV patient in its care, “it would double our total expenditure on [all] drugs for the year.”

But don’t just bash Gilead, said Bach of Memorial Sloan Kettering. “Solvaldi is the natural consequence of what we’ve allowed to occur in this country,” he said, and pointed to the illogic of oncology pricing. “I could show you drugs that are highly toxic and minimally effective and others that work great, and you couldn’t tell the difference based on the price.”

To top it off, the Times’ Rosenthal, who was the main moderator of the day, said she invited representatives from the pharma industry to speak at the conference. None accepted, she said.

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2 responses to “What Price Technology? At NYT Health Confab, It’s a Loaded Question”

  1. Ryan says:

    Great to see you lead with Bach’s car model-year insurance analogy. That one quick line of his was the star of the show for me, yesterday.

    Turns out there is someone who has made a very robust proposal in this vein: Russell Korobkin of UCLA law school.

    I’ll save the specifics, but he proposes something called “Relative Value Health Insurance”, and it is a way to address the issue of consumer demand, risk tolerance, and bounded rationality all in one neat package.

    A link to a WaPo piece he did discussing it is here – it’s worth a read and deserves broader coverage:



  2. Gregkumar says:

    Hi Alex Lash,

    Great info on Price Technology. I’ve started becoming proficient myself in Price Technology and have actually been selling video tutorials to earn some additional revenue. It’s pretty easy to do and I thought you might be interested so check it out when you get a chance, it’s free to sign up http://www.viddy-up.com/