Obscure Model Puts a Price on Good Health and Drives Down Drug Costs
The relatively straightforward concept of the model is great for comparing drugs&#x27; relative effectiveness.  The ICER number of $150k&#x2F;QALY is wildly out of line though and will bankrupt us.<p>1. The $150k&#x2F;QALY covers only the cost of the drug, not the cost of the physician to prescribe it.<p>2. The $150k&#x2F;QALY pricing is based on the manufacturer&#x27;s hand-picked population of patients and indications, which may benefit more from the drug than the average patient it&#x27;s actually prescribed for.<p>3. U.S. per-capita GDP is $60k.  One&#x27;s person&#x27;s life being extended by one year consumes the entire income of 2.5 people.<p>4. There is an implicit assumption that drug companies are entitled to be paid by government, the entire value that their products provide.  In normal competitive markets, there is a producer surplus and a consumer surplus, i.e. prices are higher than the cost of production, but lower than the value they deliver.