Thursday, February 16, 2006

Genentech to Colon Cancer Patients: BOHICA!

Well really it’s not their colon cancer patients they’re telling to bend over but their new-found breast and lung cancer patients they want to grab their ankles.

Genentech had its drug Avastin (bevacizumab), a monoclonal antibody for Vascular Endothelial Growth Factor (VEGF) which prevents the growth of new blood vessels to cancerous tumors, approved for the treatment of colon cancer in 2004. Currently Genentech is selling $1 billion per year of Avastin and recent trials have shown that Avastin may also be effective at extending the lives of breast and lung cancer patients. To celebrate the good news Genentech announced it is doubling the price of Avastin for breast and lung cancer patients.

It seems that the smart guys and gals at Genentech and their partner Roche have found that when people's lives are at stake there is considerable price inelasticity of demand for the drugs needed to keep them alive.

"As we look at Avastin and Herceptin pricing, right now the health economics hold up, and therefore I don't see any reason to be touching them," said William M. Burns, the chief executive of Roche's pharmaceutical division and a member of Genentech's board. "The pressure on society to use strong and good products is there."

I see. The “pressure on society” is there, so it’s perfectly O.K. for you to charge whatever you like for your product. A product developed with significant expenditure of public research dollars. A product for which you hold a state enforced monopoly in the form of patents. A product that only extends cancer patients lives an average of 5 months. A product currently involved in 94 clinical trials for nearly two dozen different cancers. A product expected to reach $7 billion in sales by 2009. A product you set a price for in colon cancer patients that would recoup your R&D costs and earn you a hefty profit on your product. Why is it necessary to charge twice as much for the same product in breast and lung cancer patients?

Could it be because you’re greedy pigs?
















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