Article • Dean Baker’s Beat the Press
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The NYT had a piece on prices being charged by drug companies for new types of treatment for cancer, which can run as high as $1 million a year. While the piece noted the argument of one industry critic, Dr. Aaron Kesselheim, that we don’t pay firefighters when they show up at a fire or based on how many lives they save, it didn’t carry through the logic of this point.
The alternative implied by Dr. Kesselheim’s remark is that we could pay for the research upfront, as we already do to some extent with funding for the National Institutes of Health and the Orphan Drug Tax Credit. If the government paid for research upfront, then in nearly all cases the price of treatment would be trivial, since the cost of manufacturing and delivering the drug is rarely very high. It would have been worth presenting this alternative more clearly in the piece.