Nearly 100 cancer physicians had published a report in Blood that the prices of drugs for cancer that typically cost about $100,000 per year are unsustainable and something needs to be done to manage that for the patients. The article is worth a read and compares a UK study which typically puts as a life of patient worth about $50,000 per year. Therefore, a patient that costs more than that in a year may not be sustainable by public health care. Big ethical dilemma there but so is the cost of drugs that the patient decides whether he can pay for it or not.
A report in Harvard Business Review has suggested some methods to understand and hopefully control the cost of drugs and here are the top three suggestions:
- Comparison with the hotel industry with variable room costs
- Use the McDonald’s analogy to find profit even in the cheap burgers
- Micro-differential pricing in which costs is dependent on the capability of customers in different countries
One area that has already gained some ground is the premium that different people pay in a managed healthcare system that is dependent on their salary. Therefore, a high earning surgeon will pay nearly $500 per month in premium while a technician working in the lab will pay about $50 per month. This tends towards a socialistic medical system but many people have argued that healthcare cannot be driven as much by the profit motive but instead needs to driven more as a socialistic system.