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A Look at the Headlines: Genetic Testing and Drug Costs

A Look at the Headlines: Genetic Testing and Drug Costs
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Published on September 28, 2017

During my weekly cruise through this week’s headlines, two articles really caught my eye.  The first, in Forbes, called A Money-back Guarantee for Prescription Drugs.  Says that an executive order will likely “encourage federal health agencies to make greater use of ‘outcomes-based’ contracts.” The article continues, “That's great news for patients. These contracts link a drug's price to its effectiveness. If a drug cures or treats patients as advertised, insurers pay the full price. If the drug is less successful than hoped, insurers pay a reduced price or nothing at all.”

At face value it sounds great, and many pharmaceutical companies are already moving in that direction. Outside of the U.S., some countries have used this approach on specific drugs for years. The article says it could encourage insurers to cover newer (and more expensive) prescriptions and even to eliminate “step-therapy,” that requires patients to take older, cheaper drugs first. That sounds like good newsso far.


There’s an important piece missing here. Efficacy is not necessarily random. With new, targeted treatments, there are ways to help determine who is more likely to respond to a drug and who is not, BEFORE it’s prescribed. That’s why Patient Power has joined with Antidote to create Precision Medicine for Mea new grassroots, collaborative initiative. 

One of our key premises is the need for genomic testing. Looking at a cancer at a molecular level can help determine in advance which patients are likely to respond to which treatment. It’s not just money at stake, it’s saving patients from needless treatments and wasting time when another approach could be more effective.

But here’s the “catch 22.” Genomic testing that could save insurance companies money is often not covered by insurance companies, patients don’t always know to ask for the testing, and doctors don’t always prescribe it.  This is where the education of patients, care partners, as well as members of our medical teams about genetic testing comes in at Patient Powerwe know that this testing is critical given the rapid pace of change in the world of cancer treatment toward precision medicine.  This testing and other approaches will go a long way to making a money-back guarantee meaningful. After all, there’s no refund on our lives.

A second article, Survival Rates Increase Faster Than Costs in Myeloma really highlights contradictory findings about drug prices and drug access.  On the one hand, we hear about the ever-increasing cost of pharmaceuticals and cries for legislation to bring it under control. But then there is this article in CURE: “For people with multiple myeloma, dollars spent on treatment are being stretched farther than they used to be, a recent study shows. The study, published in the Journal of Clinical Oncology, found that multiple myeloma survival rates are increasing faster than treatment costs.”

CURE quotes the study’s author, “From a patient perspective, obviously it's good that survival is improving over time. From a health care perspective, costs are not increasing as fast.”

We heard this perspective echoed at a round table by BIO NJ, the biotechnology organization in New Jersey. Healthcare economist Robert Goldberg, PhD said, "It turns out that over the past 20 years, the number of new drugs that have come out have reduced the costs of emergency rooms and physicians and hospitalizations, and have reduced the number of days people were out of work.”  According to the Agency for Healthcare Research and Quality: over the past 25 years, hospitalizations have declined from 68 percent of total healthcare spending to 45 percent specifically because of new innovations from the biopharmaceutical industry. Dr. Goldberg conclude, “If those ratios were still in place today, we would be spending three times as much on cancer, and we forget that.”

In the programming and advocacy work Andrew and I do, we have said often that the issue is not the cost of drugs in isolation—it’s the total cost of healthcare, and it’s the cost to those of us who are patients and our families. Insurance, research and regulation all play a role. It’s only with a comprehensive view of the problem that we will continue to increase survival faster than the cost of care in so many serious illnesses.

I welcome your comments. Send them to

Esther Schorr
Co-founder, Patient Power

Please remember the opinions expressed on Patient Power are not necessarily the views of our sponsors, contributors, partners or Patient Power. Our discussions are not a substitute for seeking medical advice or care from your own doctor. That’s how you’ll get care that’s most appropriate for you.


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