Drugs and dollars: Adding in costs to your health care options

A major organization of cancer doctors says it’s time to consider costs when it comes to treating the disease.

The American Society of Clinical Oncology (ASCO) is setting up a framework aimed at helping physicians assess the value of new treatment options based on clinical benefit, side effects and cost. According to the group:

The framework will serve as the basis for user-friendly, standardized tools that doctors can use with their patients to discuss the relative value of new cancer therapies compared with established treatments.

ASCO notes that cancer costs have jumped significantly in recent years, with drugs being the main driver of those increases. It adds that newly approved cancer drugs now cost an average of $10,000 per month, with some exceeding $30,000 per month.

Yahoo Finance Columnist Rick Newman says it’s hard to tell exactly what is a fair price for these medicines…and what is not.

“I don’t fault the drug companies for getting whatever they can get, that’s the way our free market system is supposed to work,” he explains. “However, we’re also supposed to have checks and balances-- free competition, transparencies, things like that-- that’s what’s really missing from prescriptions drugs.”

Newman believes that “missing” part makes it difficult for both doctors and patients to make informed treatment decisions.

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“Nobody says ‘I’m going to buy a Mercedes no matter what it costs because it’s the best,’” he points out. “We always have to make these kind of cost-benefit decisions, but it’s just almost impossible in parts of the health care industry because pricing is so opaque, there are so many layers, middlemen, insurers, nobody knows what anything costs. Even doctors often don’t know what things cost.”

So he likes what ASCO is trying to do.

“It’s a terrific idea that you somehow create a way of saying 'here’s how effective these drugs are, here’s how much they cost,' and based on that information, now we can make a judgment on whether we should pay for something the way we make a judgment over whether we should pay for anything,” he says.

Tom Lydon, President of Global Trends Investments, agrees.

“We’re in a data-driven society,” he notes. “When you think about all the industries where you have this news and information-- we’ve come up short in this area, so to see something like this come up is great.”

Lydon knows from personal experience how helpful this kind of information can be.

“My dad has just been diagnosed with prostate cancer, so our whole family is going through this right now,” he explains. “Being able to go to a source to look at certain treatments and the costs of the treatments and the effectiveness of the treatments I think is fantastic.”

Yahoo Finance’s Lauren Lyster points out this framework takes into account more than just the dollar amount of treatment.

"This is not saying, 'oh, this drug is expensive so let’s rule it out,'” she adds. “This is saying ,'let’s look at the cost relative to the benefit versus what else is on the market.'”

Newman boils it down even more.

"It’s saying, 'what do I get for my money,'” he says. “I hope the people who fix this problem become trillionaires because this is a huge problem and affects millions and millions of people. It needs to be fixed.”

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