New drugs can drive costs down in long run - US expert

19 March 2009 22:34  [Source: ICIS news]

NEW YORK (ICIS news)--Newer pharmaceutical drugs can drive down overall healthcare costs despite higher drug prices - which can be a motivating force for the US healthcare system, an industry official said on Thursday.

“There’s a perception out there that more and more of the healthcare budget in the US is being spent on drugs. In fact, for over 50 years now, it’s been shown that the cost of drugs makes up anywhere from 9-11% of the overall healthcare cost,” said John LaMattina, former president of Pfizer Global Research & Development.

The misperception is fed by the myth that new medicines add cost but provide little benefit, and by the fact that most people have to pay for medicines on their own, LaMattina said at the annual March luncheon of the Synthetic Organic Chemical Manufacturers Association during DCAT Week ’09 in New York.

LaMattina said there are dozens of examples where drugs have saved the healthcare system significant money. One of the most dramatic examples is in HIV/AIDS treatment.

Around 1995-1996, highly active antiretroviral therapy (HAART) was introduced, which is a cocktail of 3-4 drugs used in combination. This resulted in a dramatic decrease in HIV/AIDS-related deaths since then, according to LaMattina.

“The drugs were more expensive; drug treatment before HAART came to about $611/year [€452/year] and a year later, it jumped by more than $200. But the overall cost of treating HIV/AIDS patients dropped. So drug costs went up, but people were healthier and there were fewer outpatient costs further down the line,” he said.

Another example is treatment of smoking, or nicotine addiction: “Smoking is the leading preventable cause of mortality. It results in lung cancer, cardiovascular diseases and respiratory diseases. Furthermore, non-smokers exposed to second-hand smoke have higher risk of illnesses,” LaMattina explained.

He said smoking-related healthcare costs totals roughly $150bn. And it has been shown that companies pay approximately $3,500/year extra for having employees who smoke. A compound that could help stop people smoking, or stop nicotine addiction, would potentially save money over the long haul. 

“Pfizer in fact developed a compound called Chantix, which is an alpha-4-beta-2 cholinergic receptor partial agonist, which effectively blocks nicotine receptors in the brain, thereby preventing the reinforcement and pleasure people get from smoking while preventing them from smoking,” he said.

Chantix was approved by the US Food and Drug Administration in May 2006 and costs roughly $350/treatment. In comparison, treatments for lung cancer can cost the healthcare system about $50,000/year, not including the exorbitant cost of lung surgeries, LaMattina said.

Chantix comes out as the cheaper option for treating nicotine addiction, and yet most healthcare authorities do not reimburse for this therapy. I think that’s pretty strange. I don’t think drugs can solve everything, but newer, more effective ones can eventually save money over the years,” he added.

($1 = €0.74)

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By: Feliza Mirasol
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