Consumer Watchdog – Killer prices?

Genentech doubling price of cancer drug which clinical trial was government-funded

The following commentary by FTCR President Jamie Court, was broadcast on American Public Media's Marketplace program on Thursday, February 16, 2006. Click here to listen to the commentary.
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Kai Ryssdal - Host: There are new diseases like bird flu. And there are old ones like cancer. Private industry, in particular, can be adept at finding new cures. The question is should companies be able to charge what they like for their solutions? Biotech firm Genentech announced this week it has found new uses for one of its existing cancer drugs, but the price tag made some doctors cringe. Commentator and consumer advocate Jamie Court is cringing, too, and not just at the price.
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Jamie Court (FTCR) - Commentator: It turns out there is a cure for cancer, or at least a pretty good treatment for recurrence of colon, lung and breast cancer. It's called Avastin. In fact, it's so effective that Genentech says it's doubling the price. To 100,000 dollars a year.

That means hundreds of thousands of patients who could potentially benefit won't be able to afford it.

Okay, so maybe moral capitalism is an oxymoron. But even the godfather of U.S. capitalism, Milton Freidman, said that the freest market has to conform to the rule of law and social mores.

Should the supply and demand for life itself be governed solely by what the market will bear?

Should Genentech -- with a monopoly on Avastin -- decide the price of living?

The case for regulation of drug prices becomes even stronger when you realize that life-saving drugs like this are developed on the American taxpayers' dime.

The NIH confirms that the US government funded clinical trials for the drug's development but won't volunteer the exact cost to taxpayers.

Experts report that the American taxpayer foots the bill for over 44% of the nation's total spending on health care research and development.

Companies like Genentech are brilliant at being socialists when it comes to socializing the risk of drug development. But they're greedy capitalists when it's time to privatize the profit.

What can cancer patients without 100,000 clams or a platinum-plated insurance policy do?

Well, a federal law called the Bayh Dole Act actually required that when taxpayer dollars are spent on developing new drugs, those drugs have to be available at reasonable terms.

The drug industry dispensed $30 million in campaign contributions during the last presidential election. No wonder no one ever bothered to define what reasonable means.

With the FDA poised to approve the drug's new uses, isn't it time for Congress to make sure that the public's return on its research investment is that no patient is ever priced out of life?