Wednesday, February 15, 2006

Genentech's 800 lb. gorilla

Genentech is planning to charge double for Avastin's use in breast and lung cancer.

Avastin is already approved as a last-ditch colon cancer therapy (for which Genentech charges $50,000 for a year's supply). So why the additional cost? Doctors must use double the dose of Avastin for breast and lung cancer. At least, that's the only dose that was used in the clinical trials for breast and lung cancer, leaving doctors in the dark about the efficacy of the lower dose.

Genentech plans to stick by its price-per-milligram scheme, despite the fact that the additional cost of production is minimal. (If Avastin's new price holds, the drug's yearly revenue will rise from $1.1 billion to approximately $7 billion by 2009.)

Because they can't claim they're recouping R&D expenses, Genentech is using a novel justification: the inherent (read: market) value of life-sustaining therapies. A member of Genentech's board, William Burns, sums it up quite nicely: "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. The pressure on society to use strong and good products is there."

It's interesting how overt the commodification of health has become in the discourse of drug company execs. It's one thing to charge an arm and a leg for "lifestyle" drugs like Viagra, but quite another to let desperate competition between cancer sufferers optimize your asking price.

Go... Genentech!

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