- A Tale of Two Drugs
Today’s medicines can cost hundreds of thousands of dollars a year. The story of how two companies set prices for their costly new drugs suggests that the way we determine the value of such treatments will help decide the future of our health-care system.
In January 2012, the U.S. Food and Drug Administration approved Kalydeco, the first drug to treat the underlying cause of cystic fibrosis, after just three months of review. It was one of the fastest approvals of a new medicine in the agency’s history. Vertex Pharmaceuticals, which discovered and developed the drug, priced Kalydeco at $294,000 a year, which made it one of the world’s most expensive medicines. The company also pledged to provide it free to any patient in the United States who is uninsured or whose insurance won’t cover it. Doctors and patients enthusiastically welcomed the drug because it offers life-saving health benefits and there is no other treatment. Insurers and governments readily paid the cost.
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