Are drug companies being nice or what??

You may have heard the news that some pharmaceutical companies are offering to pay for treatments if a patient experiences a problem that the drug was intended to treat.

For example, if a women is taking the so-called osteoporosis drug, Actonel, and she suffers a fracture, then the treatment cost will be reimbursed to her insurance company.

Here is a quote from the New York Times:

http://www.nytimes.com/2009/04/23/business/23cigna.html?_r=1&ref=todayspaper

…last week, the two companies that jointly sell the osteoporosis drug Actonel agreed to reimburse the insurer Health Alliance for the costs of treating fractures suffered by patients taking that medicine.

“We’re standing behind our product,” said Dan Hecht, general manager of the North American pharmaceutical business of Procter & Gamble, which sells Actonel with Sanofi-Aventis. “We’re willing to put our money where our mouth is.”

Sounds good doesn”t it. Well, consider this analysis  by Melvin Gooz of Gooznews:

http://www.gooznews.com/

“Take one of its examples, for instance, which involved Actonel (risedronate), an osteoporosis prevention drug jointly marketed by Procter & Gamble and Sanofi-Aventis.

To fend off generic competition, the companies are offering to pay for any fractures suffered by women who take the drug. This could prove costly for the companies, right? It costs $30,000 to treat a hip fracture and $6,000 for a wrist fracture, according to the story.

But now let’s look at how many older women would still suffer fractures even after taking the drug for a year. According to this analysis out of Great Britain, about 0.4 percent of older women who took risedronate still suffered hip fractures (compared to 0.6 percent who took another drug). That’s about one hip fracture for every 250 women who took the $100-a-month drug.

About 2 percent of the women on the drug suffered far less costly non-vertebral fractures, some of which need treatment but many of which do not because they only show up on x-rays. But let’s assume all 2 percent suffered wrist breaks.

By doing the math on the fractures, it’s easy to see from the company’s revenue perspective how the income from the drug in this program clearly outweighs the cost of paying for the treatments. It costs 250 patients $1,200 per year or $300,000 in revenue to the company to prevent one hip fracture, which costs $30,000 to treat, and five wrist fractures, which cost another $30,000 to treat).

So the bottom line is the company spends $60,000 in treatments for every $300,000 in revenue it takes in. Such a deal.”

Those pharmaceutical marketers are so slick!!

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