My From the Editor page in the July/August issue of my day job:
Cancer drug prices explained! (and the Gell-Mann Amnesia effect, to boot!)
In June 2004, Robert Bazell, the chief science correspondent for NBC News, wrote an article called Strange Medicine on Slate.com. I’ve read Slate, which is owned by Microsoft, for a few years now. It has its partisan turns, which can drive me to distraction, but I find its articles pretty informative, in general.
In his article Mr. Bazell attempts to explain why cancer drugs are so expensive. He writes, Ã¯Â¿Â½[T]he simplest answer is that drug companies can charge whatever price they want.Ã¯Â¿Â½ Who knew it was that simple? I certainly didn’t, so I kept reading, to find out why Pharma doesn’t charge $1 million per dose of every drug (a prospect which surely would’ve made this year’s Top 20 Pharma Companies Report even more entertaining).
Well, I discovered, it’s because Medicare has failed to rein in costs by setting fees for treatment. Since private insurers follow Medicare’s lead (until they don’t, in Mr. Bazell’s world), new MAbs for cancer like Erbitux and Avastin are ridiculously expensive because drug companies want to charge lots of money for them. He writes, “Like all pharmaceutical companies, [Bristol-Myers Squibb] and Genentech cite research costs and the huge risks involved in drug development (many drugs fail; clinical trials are expensive . . . but haven’t we heard it all?) as explanations for the high prices of their drugs. But the real reason is that market forces do not apply to drugs.” Who knew? Perhaps the $2 billion that B-MS committed to ImClone to co-market Erbitux simply grew on a tree, too.
Referring to manufacturing those same drugs, he writes, “True, these antibodies are more expensive to produce than most pills, but only slightly–the technology can be replicated in any college biology lab. Production costs amount to few dollars a dose at most.” (You can go back and read those lines again; I’ll wait.)
Again, who knew? All this time, I was under the impression that my readers and advertisers were manufacturing and purifying multi-step chemical and biological processes under cGMPs at large scale, then storing, packaging and distributing them, while educating doctors and other prescribers about the uses and benefits of their products (e-mail me to let me know what additional steps I missed, like formulation and validation). Now I realize that a bunch of college kids could make Erbitux to treat the 106,000 annual colon cancer diagnoses that Mr. Bazell cites, and there wouldn’t be any problems at all!
At this point I rapidly concluded that my AppleCare warranty likely wouldn’t cover damage to my nifty new laptop caused by hefting it across the room. Then I was reminded of something I read a few months ago. At the risk of turning this space into the Ã¯Â¿Â½Michael Crichton page,Ã¯Â¿Â½ I’d like to A) note that I’ve never read a book of his, and B) cite another of the writerÃ¯Â¿Â½s speeches (to the International Leadership Forum, in April 2002):
[T]he Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well.
[. . .] You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward–reversing cause and effect. I call these the “wet streets cause rain” stories. The paperÃ¯Â¿Â½s full of them.
[. . . .Y]ou read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read [about your field]. You turn the page, and forget what you know.
That is the Gell-Mann Amnesia effect. [. . . I]t does not operate in other arenas of life. In ordinary life, if somebody consistently exaggerates or lies to you, you soon discount everything they say. In court, there is the legal doctrine of falsus in uno, falsus in omnibus, which means untruthful in one part, untruthful in all. But when it comes to the media, we believe against evidence that it is probably worth our time to read other parts of the paper. When, in fact, it almost certainly isn’t. The only possible explanation for our behavior is amnesia.
Smart guy, this Crichton. If he applies himself, he may just amount to something in this world.