Posted by Bill Sandweg on 30 August 2011.

Just a brief follow-up to yesterday’s post about the increasing cost of health care.  In this morning’s Wall Street Journal, was an article about a new niche anti-cancer drug to be marketed by Pfizer.  The company was about to cancel its research into the drug when it found that it did indeed work but only in a small number of lung cancer patients with a particular genetic anomaly.  The number could be as small as 6,000 patients per year in the United States. 

In prior years such a limited market for a new drug would have caused a drug company to decline to go through the steps necessary to bring it to market.  Conditions are such now, however, that drugs like this can be brought to market faster and at less cost than before.  In addition, our developing ability to decode the human genome allows identification of those patients who are most likely to benefit from the new drug.

The reason for my interest is the price Pfizer plans to charge for the new drug:  $115,200 per patient per year.  Critical to the plan is Pfizer’s belief that health care plans will pay for such expensive treatment, if testing can identify those most likely to benefit from the therapy.   

Two questions come to mind:  How much longer can we continue to pay for such expensive advances in medical care?  Where will we get the money to pay for them?