In an effort to calm The Motley Monk, the pharmacist said the price was well worth the cost, that is, if The Motley Monk was ever to get a case of the shingles. While that calculation made eminent sense in terms of pain and suffering--The Motley Monk’s Dad had shingles in the back of his eye socket—the fact is that one tiny vial of vaccine cost $240.00!
Feeling upset that he’d been ripped off, The Motley Monk wasn’t a happy camper until he read an article about an antivenom shot that costs $50k/vial! That finding prompted The Motley Monk to conduct a little research to unearth the facts concerning how those prices are determined.
The founding director of the VIPER Institute at the University of Arizona, Leslie Boyer leds a research group whose members try to figure out ways to improve the medical treatment of venom injuries. They’ve already developed CroFab, the leading rattlesnake antivenom, and its competitor that’s soon coming to market, Anavip. One vial of these antivenoms costs ~$2.3k.
Pricey. But, that’s not what’s important.
Knowing what it cost to produce the antivenom, Boyer couldn’t figure out why the price was so high. So, Boyer and her VIPER colleagues built a pricing model for a typical arachnid antivenom shot sold in the United States and published the findings in an article in the American Journal of Medicine.
This is what’s important:
That leaves 70+% of the cost taking the form of what are called “hospital markups” which hospitals negotiate with insurance providers. Think “sticker price” versus “dealer’s price” versus the final “negotiated price.” There’s a discount that’s available, if the purchaser knows it and negotiates it prior to payment. For example, one vial of antivenom that costs $14k+ in the U.S. costs only ~$150 in Mexico. The medicine and manufacturer are the same; all that differs is the pharmaceutical market...namely, the government of Mexico negotiating the price with the producer.
Boyer calls this is the “tip of the iceberg,” noting:
It sounds esoteric. It’s something that happens to so few people. But the truth is the entire American system for developing, testing, licensing and paying for drugs is broken. Things like this go on every day with every drug but in a smaller way, and it adds up.
In the end, it’s “like it or lump it” by taking the chance you won't get shingles.
Let the discussion begin…
To access Leslie Boyer's article in the American Journal of Medicine, click on the following link: