Bioethics Blogs

Drug Innovation and Government-Operated Health Systems

On August 30, 2014, cardiovascular drug researchers managing the PARADIGM-HF Study and its Committees announced that they were terminating their Phase III trial of LCZ696 because of observed “overwhelming benefit.” As reported in The Daily Mail: “Thousands of lives could be saved by a new drug for heart failure that researchers claim outperforms the current best treatments. … Research on more than 8,000 patients found that it saved 20 per cent more lives than the current ‘gold standard’ treatment – the ACE inhibitor enalapril.” The findings were announced at the annual meeting of the European Society of Cardiology and published the same day in the The New England Journal of Medicine. In a news release, the Switzerland-based Novartis International AG – the drug manufacturer sponsor – said that it would submit an FDA application to market the drug in the US by the end of 2014. Novartis anticipates submitting a similar application to the European Union by early 2015.

Analysts say “that [the new drug] might cost $7 a day in the United States, or about $2,500 a year. Existing [standard] drugs are generic, costing as little as [$48 a year] … .”

How does one really compare $2,500 per year for the innovator product with $48 per year for a generic product that is somewhat sufficient but statistically less effective? In dealing with insurance plans and government entities that focus primarily on costs, there probably will be little debate. The generic will be deemed good enough. After all – before the new drug discovery – the generic enalapril was clearly the “gold standard.” But, with single payer, government operated health systems – such as those used to compare with the US health care delivery system – one wonders how innovations similar to LCZ696 will be financed and funded?

The views, opinions and positions expressed by these authors and blogs are theirs and do not necessarily represent that of the Bioethics Research Library and Kennedy Institute of Ethics or Georgetown University.