bject Case Study
Topic Case 2: Quality Pricing Drug Therapies
Type Research paper
Level College
Style APA
Sources 2
Language English(U.S.)
Description
Read the case study and answer the following case questions
Case 2: Quality Pricing Drug Therapies
Some 10 years ago the New England Journal of Medicine proposed that all articles published on new therapies should close with a cost/benefit analysis comparing its benefits and costs against the best selling alternative therapy. This initiative was squashed by the pharmaceutical industry that also used lobbying to prevent the Federal Drug Administration from requiring performance tests against the best-selling alternative rather than no treatment at all (a placebo). Today, it looks like the industry is finally caving to pressure to require such testing, and that this testing must form the basis for performance and quality claims in the marketing of the new drug. The following information is the result of a test of PreventInfect, a drug developed to help prevent infections in cancer patients whose immune systems have been weakened by chemotherapy:
Probability of getting an infection without any treatment (po) 0.4
Probability of getting an infection with current best treatment (pcb) 0.2
Probability of getting an infection with PreventInfect treatment (pPI) 0.1
Average cost of treatment of infection without any treatment ($Io) $15,000
Average cost of treatment of infection with current best treatment ($Icb) $12,000
Average cost of treatment of infection with PreventInfect treatment ($IPI) $5,000
Cost of current best treatment ($Tcb) $1,200
Cost of PreventInfect treatment ($TPI) $2,000
Questions
- How do you calculate the net dollar added benefit (quality added) of PreventInfect?
- What is PreventInfect’s quality added compared to current best treatment?
- What is PreventInfect’s quality added compared to no treatment?
- Using quality added pricing, what is PreventInfect’s highest price?
- Does excluding the cost to the hospital of being sued for infecting a cancer patient who then dies
understate or overstate the benefits and quality-added of PreventInfect?
- a) Understate the benefits b) Overstate the benefits c) Makes no difference
- Should the pain and suffering of patients who get an infection be considered when selling the use of
PreventInfect to the patients’ family? a) Yes b) No
- Should the pain and suffering of patients who get an infection be considered when selling the use of
Prevent Infect to health insurance companies? a) Yes b) No
Spacing Single
Pages 2
