For example ESB would pay 5 times less to treat someone with pancreatic cancer with Tarceva than it does to treat lung cancer because the average survival benefit is less. ($1556 monthly compared to $6292)
My guess is that ESB would use $1556 as the reference price which means than any other company working on pancreatic cancer would see their good deeds penalized.
Similarly, ESB would price Erbitux for locally advanced squamous cell carcinoma of the head and neck at $10319 while it would pay only $471 for the much hard to treat metastatic forms.
That is not only economically peverse, it's immoral. If ASCO embraces this approach with it's value app it will kill innovation in cancer care overnight. There is still a lot of chatter from ASCO about paying for value, but also paying doctors more for using cheaper drugs.
This is disturbing. Lowell Schnipper,MD who runs the ASCO Value app project has made it clear that one goal of the app is to push down drug prices. And from Schnipper has said previously, the ESB pricing scheme is something he wants oncologists to endorse and discuss with patients. “My guess is that something like this can have a modulating effect,” he said. The increased transparency may make it more difficult for pharmaceutical companies to attach significantly higher price tags to drugs that confer only a small benefit.