Being Part of the Cost Calculation for New Drugs

Being a lab rate for this clinical research trial has spurred me to understand better the cost of medication, rather, the cost of testing a potential treatment in the quest to bring it to market. In this case, the sponsor needs 15,000 people to go all the way through the research protocol: fulfilling all the criteria to be randomized into the treatment phase; taking the investigational drug or placebo for several months; and then a second endoscopy, blood tests, and other measures of physical health.

They’ll have to enroll thousands of people in the pre-test phase to get 15,000 people who will complete the study. I’ve been reading on the message boards for celiac advocacy groups and GF blogs how many people have volunteered for the study but have not been able to complete the study because they “failed” the endoscopy and biopsy. Their guts were healed too much from following the gluten free diet to qualify for the treatment phase of the study.

Here are my back of the proverbial envelope calculations.

The Cost of Admission:

The endoscopy with biopsy, according to the handy website Newchoicehealth.com, costs between $2,500 and $3,600. The average for where I live is $2,300.

Participant incentives (AmEx gift cards) for completing each milestone in the process up to this point totals $500.

The cost to operate the telephone celiac symptom diary each subject has to call every day. I have no idea how to calculate the cost of that.

Two sets of blood tests probably are $200 in this preliminary phase, based on what they cost when billed to insurance.

And then there is the hourly rate of pay for the study coordinators who complete the intake and initial screening; the training to use the phone system; the scheduling of our procedures and appointments; the disbursement and recording of participant incentives; and the general management of the process. Let’s say they make $25 an hour and each subject in this phase requires 20 hours of work. That produces an additional cost of $500.

Now add in the physician’s fee for the two medical screenings we have, each taking about 30 minutes, plus 30 minutes reviewing test results. A generalist physician according to salary.com earns at least $100 an hour (this seems ridiculously low) so this results in a cost of $150.

So, that means I cost $2,300+500+200+500+150=$3,650 just to see if I might qualify to test the medication. If I don’t, that $5,000 doesn’t get them toward the result, but, rather, seems like a loss.

Now think of this: 15,000 people just going through this screening phase costs $3,650 x 15,000 = $54,750,000.

Of course, this is a rough estimate. The actual amount may be higher or lower, but, still, that’s a lot of money just to get to the point of being able to begin testing how well and how safely the medication works in human beings.

Completion Costs:

The cost to complete the trial for each person would be almost double, at least, or between $5,000-$7,000, given the length of time, the amount of medication needed to be distributed and consumed, the second endoscopic exam and another biopsy, and even more blood tests and another physical. Wow.

We also have to consider the number of people who “fail randomization” and don’t get to the next phase of the study, and add that to the cost of the 15,000 completing the study. We are well over $100,000,000.

I have a whole new view of pharmaceuticals now. Yes, I still believe we get gouged at the pharmacy for drugs that have been on the market a long time yet keep getting minor tweaks to their formula to qualify for a new patent and thus seven more years of protection from generics.

Cost-Benefit or Safety-Efficacy Dilemmas:

In this frightening time of Ebola and other deadly diseases, it’s important to remember how much it costs to develop and test new drugs and how difficult it is to balance expediency against safety. We want it now, but how much are we willing to risk or pay to get it now? Do we rush a drug to the front lines without having sufficient data that it’s at least no more deadly than what it’s trying to treat? How much less deadly does it have to be to allow it to come to market and what do you say to the loved ones of the people who take it and die from it, especially when not to have taken it likely (but not 100% certainly) would have resulted in death, too? Is it okay to give a patient infected with Ebola a promising drug that hasn’t gone through all phases of testing so you don’t know how well it will work or how high its mortality rate is, or is it better to withhold the drug until testing is completed, knowing that thousands certainly will die because they don’t have any effective treatment at all?

Who pays the $100 million for expedited testing?  And who determines what protocols can be relaxed and by how much to expedite testing with the hopes of more quickly bringing a drug to a global market?

Tough choices in the face of a frightening pandemic or epidemic (time will tell which it is).