One of the most discussed aspects of healthcare has to be how to balance cost, quality and access.  This is especially true when it comes to the pharmaceutical industry, particularly with the rapid growth of and increased focus on highly effective, but highly expensive, specialty drugs.  Discussions about these costs are no longer isolated to negotiations between pharmaceutical companies, PBMs and insurers; instead it appears that price and cost are on FDA’s radar. 

For example, the Oncologic Drugs Advisory Committee (“ODAC”) hearing, earlier this month, was not only historic because ODAC unanimously recommended FDA approve the first biosimilar product under the Biologics Price Competition and Innovation Act, but it is the first time I am aware of an advisory committee member asking about the cost of the product.  Specifically, Dr. James Liebmann asked whether the biosimilar product would be priced less than the existing reference product. 

What is more surprising is that last month a recent survey determined that more than 4 in 10 pharmaceutical executives expressed an openness to FDA taking economic data into account in determining whether to approve a drug product.  Although I think it is important for the country as a whole to consider costs when deciding between treatment options, I don’t think FDA or any government entity should be in a position to prevent a safe and effective product from reaching the market because of its costs.  FDA should only evaluate whether the product is safe and effective and leave it up to the payor to do the cost-benefit analysis.

That being said, a recent study indicates that this analysis may be difficult because a patient’s perception of cost may actually impact how well a drug works.  According to the study discussed in Lenny Bernstein’s article entitled “An ‘expensive’ placebo is more effective than a ‘cheap’ one, study shows,” it appears that the cost of a drug could impact efficacy.  This article discusses a small clinical study in which patients with Parkinson’s disease were told they were going to receive an investigational drug developed to treat their disease.  The patients were told that one of the injections that they would receive contained a version of a drug that cost $100, and that the other contained a version that cost $1,500.  However, in reality, both injections were nothing more than saline.

Leaving aside the ethical issues of deceiving the subjects, the results were pretty amazing.  Specifically, the patients performed better on certain motor skills tests after receiving the injection that they believed contained the more expensive drug than they did after receiving the injection that they believed contained the less expensive drug.  What was more shocking to me was that results associated with the “more expensive” placebo apparently came close to the results associated with the patients’ regular drug, levodopa.

This study was relatively small and the results may not be generally applicable; however, this is something payors and regulators think about as we try to use cost sharing as a way of influencing patient choice and driving down costs.  If we encourage patient’s to choose the less costly alternative, will this negatively impact the efficacy of the treatment? 

Additionally, this study demonstrates the potential magnitude of the placebo effect.  Therefore, as Congress and other stakeholders think about alternatives to double-blind studies to support approval of new products, in the context of the 21^stCentury Cures initiative, this should be something they think about.